Apply tax to total after redeem voucher (smart coupons module)
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A friend reached out to me because his WP & WC web agency couldn’t find a suitable solution, and what I’m describing is more a legal issue in Germany regarding VAT (they have also reached out for legal advice, who confirmed the issue). Please excuse if I’m overlooking something here, I’m a total noob with WC.
Description of the issue:
1. Step: The site sells single vouchers of 10 Euros each, including 19% tax.
(The 19% vat is included in the invoice, correctly calculated and they pass the VAT amount to the authorities accordingly)
2 Step: When a voucher holder buys a product of 11,50 € and redeems that voucher (that has already the 19% VAT included), the invoice gets calculated and shown as follow (translated from German):– (Subtotal) Zwischensumme: 11,50 €
– (Discount) Rabatt: -0,00 €
– Payment-Type: PayPal
– Shop-Credit used: -10,00 € (this is the redeemed voucher)
– Total: 1,50 €
– incl. 19 % VAT 1,84 €The issue is because of the 19% VAT being calculated on the subtotal of 11,50 € and being activated in that invoice with its total amount of 1,84 €. BUT 1,60€ has already been passed to authorities after step 1. Because that second invoice is showing a VAT of 1,84 €, authorities will demand the exact VAT amount of 1,84 €, instead of the 0,24 €. The correct VAT in that invoice needs to be 0,24 € calculated on the total of 1,50€ being paid in step 2 only.
I’ve seen the docs about “Apply before taxes” and multiple blog/forum entries over the internet, but none has really been fully helpful. In https://woocommerce.com/document/smart-coupons/using-apply-before-tax/ also doesn’t seem to apply here, and the description doesn’t really state what the setting really does: It just says “If you want to change this behavior of the store credit”, but not what or how it changes the behaviour of the store credit. Furthermore the WP Web Agency told them this would need further expensive customizing, what I couldn’t believe because of it beeing a really common issue here in Germany.
Really appreciate any help or somebody pointing us to the right direction. Thank you.
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@ihereira many thx for the quick response. I appreciate that a lot.
I need to get further details from the company with the issue: Because of the legal situation, the URL to the voucher shop was temporarily closed. Also, I don’t have access to their wp-admin because I’m not their official WP freelancer. However, this is something their WP Web Agency should resolve.
Just for furhter explanation:
The issue is because of the voucher categorization by the german tax law and authorities, who demand the vouchers VAT immediately. At the end (during the final payment) where that voucher is redeemd, the VAT MUST NOT have the VAT calculated behalf it’s subtotal, but behalf the paying difference only. Otherwise the authorities would demand exceeded VAT. If e.g. the vouchers value exceeds the products value, VAT must be 0.
Again, that’s not a plain setting issue. Just setting the voucher to not demand the VAT isn’t an alternative. The voucher MUST (by law) include the VAT, and furthermore when the product is purchased and the voucher is redeemed, the final VAT calculation MUST be calculated on behalf the total and not the subtotal.
As you can also see from this post, there are other admins with the same issue in Germany (unfortunately in German): https://de.www.ads-software.com/support/topic/einzweck-gutscheine/
Many thx.
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