1. Using Supply Chain Cost Management
  2. What's the difference between inclusive basis and exclusive basis in tax calculations?

What's the difference between inclusive basis and exclusive basis in tax calculations?

Inclusive taxes are included in the assessable value or purchase price. For example:

  • PO amount: USD 100

  • Inclusive tax rate: 10%

  • Tax: 100/1.10 = USD 9.09 (distribution amount divided by (1 + tax rate))

Exclusive taxes are added to the purchase price or assessable value. For example:

  • PO amount: USD 100

  • Exclusive tax rate: 10%

  • Tax: 100*0.10 = USD 10.00 (distribution amount multiplied by tax rate)