Understanding Tax Calculations for Landed Costs

You use the Landed Cost Selection program (P43291) to retrieve setup information for landed costs from the Item/Supplier Cost Components table (F75I791), and to perform the corresponding tax calculations. This program uses the Calculate Landed Cost function in the Landed Cost Selection business function (N4300970).

Depending on the landed cost setup, the Landed Cost Selection program calculates a tax percent based on the unit price or another tax amount, or adds a specific amount to the unit cost. For a tax on another tax amount, you must specify a based-on cost level during setup for the system to calculate the tax on the based-on tax amount only, and not other amounts.

For example, assume that the price of an item is 500 and five items are ordered. The extended base price is 2500. For this item, Tax A (cost level 3) is 2 percent of the extended base price (2500), or 50. Tax B (cost level 5) is 20 percent and is based on Tax A. The extended amount for Tax B is 20 percent of 50, or 10. Tax B is not based on the extended base price of the item.

See also:

• "Entering Landed Costs" in the JD Edwards EnterpriseOne Applications Procurement Management Implementation Guide.