Being from the US, I don't have a lot of experience with including tax in product prices (new feature configurable feature 1.9.1) - so I have a question as it relates to discounts.
So far, I have the product pricing setup and working and have added the "original price" and "tax adjustment" as new extended data values so that they can be reported on in the back office. My question is when applying discounts to an entire sale ...
Am I fine applying the discount to the entire sum of prices including taxes and then figure out the difference would be in the modified tax value and storing that in an extended data value in the discount line item - or should I apply the discount to to the original price and then recalculate the taxes on everything? I think the results would be similar but will likely have some rounding implications ....
In the UK on most other shops I have worked on normally apply the discount to the total of the line items and then calculate the tax on that.
However you may need to do it by each individual line item as I forgot that each item could be taxed or not taxed, and I would guess that you could apply discounts based on item types as well.
Question about Tax included in Product price and discounts
Being from the US, I don't have a lot of experience with including tax in product prices (new feature configurable feature 1.9.1) - so I have a question as it relates to discounts.
So far, I have the product pricing setup and working and have added the "original price" and "tax adjustment" as new extended data values so that they can be reported on in the back office. My question is when applying discounts to an entire sale ...
Am I fine applying the discount to the entire sum of prices including taxes and then figure out the difference would be in the modified tax value and storing that in an extended data value in the discount line item - or should I apply the discount to to the original price and then recalculate the taxes on everything? I think the results would be similar but will likely have some rounding implications ....
Hi Rusty,
In the UK on most other shops I have worked on normally apply the discount to the total of the line items and then calculate the tax on that.
However you may need to do it by each individual line item as I forgot that each item could be taxed or not taxed, and I would guess that you could apply discounts based on item types as well.
Hi Paul,
I'm adding the tax per item to products marked taxable ... so I've got that covered.
For the discount, if I have:
A tax of 25%;
Product 1 - 12 Euro -> Price: 15 Euro (tax 3 Euro)
Product 2 - 16 Euro -> Price: 20 Euro (tax 4 Euro)
Product 3 - 5 Euro (not taxable) -> Price: 5 Euro (tax 0)
So the total without discounts is 40 Euro;
With a 10% discount I assume it would be better to itemize by :
P1 + P1 Tax 10.8 + 2.7 = 13.5
P2 + P2 Tax 14.4 + 3.6 = 18
P3 4.5
13.5 + 18 + 4.5 = 36 Euro (total sale)
So the discount line item (from a coupon) would be for 4 Euros
With extended data values indicating: adjustedProductPrice : 29.7 adjustedTaxPrice : 6.3
Or do I need to go further and actually break it down by product?
Hi Rusty,
I wouldn't of thought you would need to break it down by individual product, what you have in that example would be perfect.
Paul
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