Tax Basis
When configuring local tax settings, you can choose between two types of Tax Basis, which determine how the tax amount is calculated. These options are designed to provide flexibility depending on how your accommodation charges are structured. The two available options are:
Accommodation Fee (Per Person Per Night)
This tax refers to the method used to calculate applicable taxes based on the average cost of accommodation per person for each night of stay. This means that the tax amount is determined from the each nightly rate charged to each individual guest, rather than the total room rate or booking amount. For example, if the total accommodation amount is $300 for a 3-nights stay with two guests, local tax will calculated from the average price of total accommodation amount divided by 3 nights and two guest. In this case, the average is $50.
Total Accommodation Amount
When the tax is based on the total booking amount, it means the local tax is calculated from the entire accommodation value of the reservation.
For example, if the total accommodation amount is $300 for a 3-nights stay with two guests, the tax will be calculated from the full $300. This method applies a flat tax rate to the overall amount, rather than breaking it down per guest or per night.
Tax Type
In the Local Tax setup, there are also two available options for the Tax Type.
In addition to selecting the Tax Basis, you can also define the Tax Type, which determines how the tax amount is applied. The two available options for Tax Type are:
Fixed Value
When the tax uses a fixed value, it means the tax amount remains the same regardless of amount. Whether the booking is high or low in value, the tax applied does not change.
Ranged Value
When the tax type is set to Ranged Value, the tax percentage will vary depending on the booking amount. The system will automatically match the total amount to a predefined range, and apply the corresponding tax rate.
For example, if the total booking amount falls under a specific range, such as ¥300,000 to ¥800,000, then the applicable tax value (e.g., 6%) will be applied accordingly.