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> That depends on whether they're rounding, or taking a floor or ceiling :). With proper rounding, it's a wash. Agreed! If they are actually rounding it will b
by tekknik 6y ago
> That depends on whether they're rounding, or taking a floor or ceiling :). With proper rounding, it's a wash.
Agreed! If they are actually rounding it will be a statistical wash.
> Regardless of the rounding method, the fair way is to sum up purchases and compute tax on the total, precisely to minimize the loss of precision on rounding.
Again, agreed, this is why we do it this way in the US.
> Curiously, as far as I understand the Polish tax code (IANAL), the choice of the method to use is actually given to the vendor! The law recommends[0] that you calculate the tax by multiplying the rate with the total taxable amount, but also allows[1] the seller to choose to calculate per-item tax, and sum that. In both cases, mathematical rounding (half-up) is used[2].
US tax code, at least as far as income taxes go, uses the same rounding method (nearest decimal) however sales tax is can be quite a bit more complicated [1].
Also somewhat related, we quote our fuel prices to 3 decimals.
[1] - https://blog.taxjar.com/rounding-issues-sales-tax-returns/ https://blog.taxjar.com/rounding-issues-sales-tax-returns/