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What is Compound tax?

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It is a tax that is calculated using one or more simple taxes.
For example, assume that the product cost is $200 per unit. If compound tax is computed as 2% of the product’s tax value, then the product’s price after taxes is $242.76.
Compound tax is calculated as (4.5% VAT+12.5% Service Tax+2% Sales Tax).  

Note: A compound tax cannot have another compound tax within it.

To know more about Tax Management, click here.

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