VAT CALCULATION ON DISCOUNT

  • distridor

    (@distridor)


    5 months ago

    Hello,

    I apply a discount to the bundled product of 10% excluding VAT.
    This discount in the basket applies to the total price excluding VAT.
    However, the calculated VAT amount is incorrect because it does not take into account the discount on the total cost excluding VAT.
    The VAT calculation is based on each product in the batch individually without taking into account the discount applied to the entire batch.
    This results in a VAT calculation that is ultimately false because it is based on each individual product not discounted while the whole is discounted.
    The VAT calculation should only be done on the total price discounted in your system, including the upstream discount. The discount is not taken into account in the individual calculation.
    I would like to point out that the price adjustment is automatic.

    Example :
    €100 excluding VAT (excluding VAT) – 10% discount on bundled product = €90 excluding VAT
    Except that the tax on the price is calculated on €100
    That is 100* 1.2 = 120 € VAT INCLUDED
    The price should be 90*1.2 = €108 VAT included
    I therefore overcharge €2 for each bundled product which includes a discount on the entire lot.

    Thanks for your help.

    The page I need help with: [log in to see the link]

Viewing 4 replies - 1 through 4 (of 4 total)
  • Plugin Support Janilyn T

    (@janilyn409)

    Hi @distridor ,

    The link you sent was for the cart page on your site, not your bundle page.

    I assume that you are using the fixed price for the main bundle instead of the auto-calculated prices.

    With the fixed price for a bundle of items, our plugin will first calculate the VAT based on the bundle price you set in the General tab as when the bundle is using the fixed price, all the prices of subproducts will be ignored and the main bundle will be considered as a single item to be taxed.

    The situation will be different when using the auto-price method for the bundle. All subitems are equally treated with 10% discount after the tax for each is calculated. This is to make sure when the subitems have different tax classes, they will be processed properly.

    In our plugin, the discount is not considered to be taxed as it depends on the seller’s country laws that taxes should or should not be charged. Hence, with our plugin, the discount will be calculated after the tax calculation for each subitem or main bundle is done – the post-tax prices. This is because it’s impossible to consider which tax class will be used for the discount amount, so either the bundle price or subproduct prices will be taxed first.

    Best regards.

    Thread Starter distridor

    (@distridor)

    Hi

    My price as said into my post are in AUTOMATIC CALCULATION not fixed price or manual price.

    So please update your answer.

    Thanks

    Thread Starter distridor

    (@distridor)

    https://shop.distridor.com/wp-admin/post.php?post=9550&action=edit

    Plugin Support Janilyn T

    (@janilyn409)

    Hi @distridor ,

    Please read my answer’s second part to get the situation when the auto-price is chosen and how the tax for the discoun will be processed.

    Our plugin doesn’t offer pretax prices as the laws differ in many countries. So the bet solution is to calculate the discounts AFTER calculating the VAT for each subproduct inside the smart bundle. This will also be applicable to the cases when subproducts have diffent tax classes and tax stasuses.

    Best regards.

Viewing 4 replies - 1 through 4 (of 4 total)
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