When there are taxes charged on the interest, principal, and so on, the payment of the component always include the corresponding tax amount. If the payment does not include the full amount due, the proportional tax amount must be liquidated. You should input the total amount to be applied to the component. The system then calculates the corresponding tax amount (based on the tax rate) and distributes the amount paid between the component and the tax.

Example

If a customer owes USD 1000 in interest (tax inclusive), the tax rate is 10%, and he pays you USD 1000, the payment is automatically distributed into USD 909.09 (interest) and USD 90.91 (the tax component).

He still owes you USD 90.91 in interest and USD 9.09 in tax.

Total tax is always calculated on the full schedule. Therefore, if there is a rounding difference, it is adjusted in the last liquidation.

Example

In the above instance, the tax component has come to USD 90.91 for that schedule. Suppose the total tax component is USD 273. If this is paid in three schedules the total comes to USD 272.73 (90.91 + 90.91 + 90.91 = 272.73). During the last liquidation, the system rounds off the total of such schedules for tax to the nearest decimal point, that is, USD 273.