Tax Calculation


I am new to Microsoft Dynamics NAV. I am using Version 4.0. I want to ask some questions from the expert here:

  1. How Navision is calculating Taxes. I mean whats the logic if i am creating a Purchase Order and want to calculate let suppose VAT.

  2. What combination or formula does NAV used when calculating Taxes like is it checking some multiple setups like check Vendor Assigned Taxes, or Location Specific Taxes, or Item Specific Taxes etc.

In summery i want to know whats the method of calculating Purchase Taxes and Sales Taxes. Is there any document available to see all these settings.

Thanks in Advance.


Basically there are two paths. The basic VAT engine in the international W1 version, or the tax engine for the local region that you are using. The Tax engine is one of the most important changes made in Country specific localizations, and its very likely that your country has a different Tax engine than W1.

Thus its probably only possible to answer this question if we know which country version you are running.

Hi Sajid,

This might be of some help to you, this is somehow much more old one but will help you to gain the insights on the tax calculations


Are u based in India?