Microsoft Dynamics AX can calculate a sales tax as percentage of another sales tax amount. This is called Sales tax on sales tax.

To set up a sales tax on a sales tax, you must create a new sales tax code and add it to the appropriate sales tax groups:

1. Click General ledger> Setup> Sales tax> Sales tax codes .

2. Click CTRL+N to create a line for a new sales tax code.

3. In the Sales tax codetext box, enter a unique identifier for the sales tax code.

4. In the Nametext box, enter a name for the sales tax code.

5. Select values for the Settlement periodand Ledger posting grouplookup fields.

6. In the Origindrop-down list, select Percentage of sales tax.

7. On the Calculationtab, select a value in the Marginal baseand Method of calculationdrop-down lists.

8. In the Sales tax on sales taxlookup field, select the sales tax code for which you want to calculate sales tax on sales tax.

   For the Sales tax on sales taxfield, do not select a sales tax code that is set up for Percentage of gross amountin the Originfield. This creates a circular reference, because the gross amount would include the sales tax on tax and vice versa.

9. Add the new sales tax code to the appropriate sales tax group and item sales tax group. The groups must also include the sales tax code that is entered in the Sales tax on sales taxlookup field in step #8.