there are three levels.Header,Line,Tax code

if u give tax to be calculated at header level
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System will calulate tax based on INVOICE amount in INVOICE 
window.

if u give tax to be calculated at line level
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System will calulate tax based on DISTRIBUTION amount in 
DISTRIBUTION window .

there is no much difference between LINE& TAX CODE
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ONLY DIFFERENCE IS calculate tax, and then round the tax 
amount.


WHERE AS LINE LEVEL calculate tax for each distribution, 
round the tax amount, then add the tax amounts.