If a cash discount is applied, a corresponding proportion of the posted sales tax is also refunded. If the sales tax option is activated for the cash discount, the applicable sales tax amount is stored with the entries.
If the cash discount is calculated on invoice amounts that include sales tax, the sales tax is automatically refunded when payment is made.
If this check box is cleared, the cash discount is calculated on the invoice amounts before the sales tax is calculated.
Different rules for calculation of cash discount apply in different countries.