Set up a sales tax on a sales tax


This content is archived and is not being updated. For the latest documentation, see Microsoft Dynamics 365 product documentation. For the latest release plans, see Dynamics 365 and Microsoft Power Platform release plans.

Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2, Microsoft Dynamics AX 2012 Feature Pack, Microsoft Dynamics AX 2012

You can calculate sales tax as a 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 sales tax code and add it to the appropriate sales tax groups.

Create a sales tax code based on another sales tax code

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

  2. Click New to create a sales tax code.

  3. Enter information in the required fields. For more information, see Sales tax codes (form).

  4. On the Calculation FastTab, in the Origin field, select Percentage of sales tax.

  5. In the Sales tax on sales tax field, select the code for the sales tax on which to calculate sales tax.


    Do not select a sales tax code for which Percentage of gross amount is selected in the Origin field. Otherwise, the gross amount will include sales tax on the tax amount and tax on the sales tax amount.

  6. Enter or select information in the other fields.

Add a sales tax code to a sales tax group

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

  2. Select the sales tax group to assign the sales tax code to.

  3. On the Setup FastTab, click Add.

  4. Select the sales tax code that you created in the previous procedure. The group must also include the sales tax code that you selected in the Sales tax on sales tax field in the previous procedure.


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 sales tax = 2.50 + 0.25 = 2.75

See also

Sales tax codes (form)