For each sales tax code that you create in the form, you must select the method of calculation to apply to the tax base amount in the field. When you create a new sales tax code, the default value in this field is , but you can change the value to any one of the other options.
Percentage of
net amount calculation method
As the default value in the field, the calculation method is frequently chosen to calculate sales taxes.
The sales tax is calculated as a percentage of the purchase or sale amount, excluding any other sales taxes.
The invoice line shows a quantity of 10 items @ $1.00 each, and the customer is allowed a 10% line discount.
Net amount = 9.00.
Sale tax = 25%x 9 = 2.25
Total amount = 9 + 2.25 = 11.25
Percentage of
gross amount
In the method, the sales tax is calculated as a percentage of the gross sales amount, which in the following example includes all the other sales taxes or duties.
Example
The tax authority has imposed special duties on an item.
The duty amounts are added to the net amount before sales tax is calculated. You must create and set up three sales tax codes:
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Duty 1 = 10%, using the calculation method.
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Duty 2 = 20%, using the calculation method.
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Sales tax = 25%, using the calculation method.
If the net amount = 10.00, then Duty 1 = 10.00 x 10% = 1.00and Duty 2 = 10.00 x 20% = 2.00.
Therefore:
Gross amount = Net amount + Duty 1 amount + Duty 2 amount, or 10.00 + 1.00 + 2.00 = 13.00
Sales tax = 13.00 x 25% = 3.25
Duty and sales tax in total = 1.00 + 2.00 + 3.25 = 6.25
Total amount = 10.00 + 6.25 = 16.25
Percentage of
gross amount, additional option
When you set up the sales tax calculation with , you can select a sales tax in the lookup field.
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On the tab of the form, select a sales tax code for which is selected in the lookup field.
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On the tab, in the lookup field, select a sales tax or duty to include in the gross amount in the sales tax calculation.
Note
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When you select a sales tax code in the , only that sales tax—and none of the other sales taxes—is included in the gross amount for the sales tax calculation. If no sales tax code is selected in the lookup field, the calculation includes all sales taxes in the gross amount for the sales tax calculation |
Example
The tax authority has imposed special duties on an item.
One of the duty amounts must be added to the net amount before sales tax is calculated. You must create and set up three sales tax codes:
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Duty 1 = 10%, using the calculation method.
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Duty 2 = 20%, using the calculation method.
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Sales tax = 25%, using the calculation method,with Duty1 in the field.
Net amount = 10.00
Duty 1 = 10.00 x 10% = 1.00
Duty 2 = 10.00 x 20% = 2.00
Gross amount = Net amount + Duty 1 amount = 10.00 + 1.00 = 11.00
Sales tax = 11.00 x 25% = 2.75
Duty and sales tax in total = 1.00 + 2.00 + 2.75 = 5.75
Total amount = 10.00 + 6.25 = 15.75
Percentage of
sales tax
When you select in the field, sales tax is calculated as a percentage of the sales tax selected in the field.
The sales tax selected in the field is calculated first. The second sales tax is then calculated based on the first sales tax amount.
Example
You must have the following three sales tax codes:
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Duty 1 = 10%,
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Duty 2 = 20%, , Duty1 in the field.
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Sales tax = 25%,
Net amount = 10.00
Duty 1 = 10.00 x 10% = 1.00
Duty 2 = 1.00 x 20% = 0.20
Gross amount = 10.00 + 1.00 + 0.20 = 11.20
Sales tax = 11.20 x 25% = 2.80
Total sales tax = 1.00 + 0.20 + 2.80 = 4.00
Total amount = 10.00 + 4.00 = 14.00
Amount per
unit
When you select in the field, sales tax is calculated as a fixed amount per unit.
The unit is selected in the list, and the amount is specified in the form.
Example
Amount per
unit, additional option
On the tab, you can select whether the duty is calculated before the sales tax, that is, whether the duty amount is included in the sales tax calculation.
You can consider three options:
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Select for the sale tax calculation and calculate a duty as an calculation.
The duty amount is added to the net amount and is included in the gross amount in the sales tax calculation.
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Select for the sales tax calculation and calculate a duty as an calculation.
The duty amount is notadded to the net amount and is excluded from the sales tax calculation.
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Select for the sales tax calculation, calculate a duty as an calculation, and select the check box on the tab for the duty calculation.
The duty amount is added to the net amount and included in the calculation of sales tax.
Examples
Example 1
Duty 1 = 5.00
In the drop-down list, select .
Sales tax = 25%in
The check box has no effect, because sales tax is calculated as .
Net amount = 10.00
Duty 1 = 1 x 5.00 = 5.00
Gross amount = 10.00 + 5.00 = 15.00
Sales tax = 15.00 x 25% = 3.75
Total sales tax = 5.00 + 3.75 = 8.75
Total amount = 10.00 + 8.75 = 18.75
Example 2
Duty 1 = 5.00
=
Sales tax = 25%in
The check box is not selected for the duty calculation.
Net amount = 10.00
Duty 1 = 1 x 5.00 = 5.00
Sales tax = 10.00 x 25% = 2.50
Total sales tax = 5.00 + 2.50 = 7.50
Total amount = 10.00 + 7.50 = 17.50
Example 3
Duty 1 = 5.00
=
Sales tax = 25%,
The check box is selected for the duty calculation.
Net amount = 10.00
Duty 1 = 1 x 5.00 = 5.00
Sales tax = (10.00 + 5.00) x 25% = 3.75
Total sales tax = 5.00 + 3.75 = 8.75
Total amount = 10.00 + 8.75 = 18.75
Example 4
The result of Example 3 and Example 1 is the same, because there is only one duty.
Assume that you have two duties, and only one of them is included in net amount for the sales tax calculation:
Duty 1 = 5.00 – The check box is selected.
Duty 2 = 2.50 – The check box is not selected.
Sales tax = 25%,
Net amount = 10.00
Duty 1 = 1 x 5.00 = 5.00
Duty 2 = 1 x 2.50 = 2.50
Net amount subject to sales tax = 10.00 + 5.00 = 15.00
Sales tax = 15.00 x 25% = 3.75
Total sales taxes, including duties = 5.00 + 2.50 + 3.75 = 11.25
Total amount = 10.00 + 11.25 = 21.25
The 25 percent (%) sales tax is calculated for the sum of the net amount (10.00) + Duty1 (5.00) = 15.00. Duty2 is added to the tax amount after the sales tax is calculated.
Calculated
percentage of net amount
The calculation method is used in Germany.
Example
The net amount = 10.00 EUR.
The tax rate is 25%.
The sales tax is then calculated as follows:
Net amount x tax rate = 10.00 x 25% = 2.50 EUR
