Introduction

This document provides instructions for entering Tax on Tax. Some Canadian Provincial taxes are now allowed to tax the GST tax, so this feature allows you to specify a tax code to apply tax on tax.

Procedure

From the Optifacts Main Menu:

Select Option 1 – Accounts Receivable and press Enter.

Select Option 3 – Other Routines and press Enter.

Select Option 6 – Add/Edit Tax Tables and press Enter.

Enter the tax table code you wish to change.
The entries display along with the Beginning and Ending dates.

When the Tax on Tax field is “Y,” this means that any taxes applied to the invoice get included in the tax calculation. The system adds tax beginning with the Federal or GST level, so if tax B above is in the account editor as a State or Provincial tax code, then it includes the tax calculated at the Federal/GST level.

Example:

Invoice for $100.00 and the GST tax of 16% (example, tax code G) would create a total of $116.00. Then, a Tax on Tax at Provincial level of 10% (example tax code B) would then add 11.60 for a total of $127.60.

If there’s another tax code at the local level (say 5% example tax code L) then that could be set up to tax the $100.00 if not tax-on-tax or to tax the full 127.60 if a tax on tax, thus the tax at a local level could be either $5.00 or $6.38 if tax-on-tax.

So, when taxes get set up in the account editor, be sure to put them in the correct order for which the tax should is to be accumulated:

To view and download these instructions as a PDF file, click on the following document image.

Click here to return to the top of the page.