Hi i am not able to setup the tax for freight (weighted average tax calculation)
The tax on the freight line should be calculated based on the weighted average tax rate derived from all item lines in the transaction for both AR and AP invoices
For example:
Line | Amount | Tax Rate |
|---|---|---|
Line 1 | 100 | 22% |
Line 2 | 50 | 4% |
Freight | 7 | Weighted Average Tax |
Weighted average tax rate calculation:
Weighted Average Tax Rate=(22%×100/150)+(4%×50/150)
Freight tax amount calculation:
Freight Tax=7×(22%×100/150+4%×50/150)
Accordingly, the freight tax should not be calculated using a standard or fixed tax rate. Instead, it must be proportionately derived based on the weighted average of the tax rates applicable to all item lines in the order/invoice.
Thankyou
N.Prasanna
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