Tax Calculation Service (RCS) – Microsoft Dynamics 365 Community
Tax Calculation service helps system to calculate complex taxes between country and locations and EU and multiple tax registration ids. For this purpose you have to setup RCS, enable feature and setup all the scenarios in the tax calculation engine. Not only it helps calculate these but more complex scenarios like calculation of taxes based on margin.
You may find the documentation of Microsoft below and also a video that briefly explains how system works.