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:
Click CTRL+N to create a line for a new sales tax code.
In the text box, enter a unique identifier for the sales tax code.
In the text box, enter a name for the sales tax code.
Select values for the and lookup fields.
In the drop-down list, select .
On the tab, select a value in the and drop-down lists.
In the lookup field, select the sales tax code for which you want to calculate sales tax on sales tax.
For the field, do not select a sales tax code that is set up for in the field. This creates a circular reference, because the gross amount would include the sales tax on tax and vice versa.
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 lookup field in step #8.
Invoice net amount = 10.00
Sales tax code "Standard" = 25%
Sales tax code "Tax on tax" = 10%
Sales tax is calculated as 10.00 x 25% = 2.50
Sales tax on sales tax is calculated as 10% of the sales tax amount = 2.50 x 10% = 0.25
Total sale tax = 2.50 + 0.25 = 2.75