Cannot work out TAX (VAT) properly

[antonitus]

Can someone please tell me how I can work out the TAX (VAT) in the following scenario:

1. I have a final cost, say 19.95.
2. I don't want to add 20% VAT on this final cost.
3. I want the cart to show the final price of 19.95 and show 20% tax of this final cost to let customers know that tax is included in this final cost

I tried everything I can think of in the TAX configuration and product configuration and I can't get it to work. I deducted 20% from 19.95 from the base cost, but it does not work out TAX properly.

At the moment, I can apply no VAT rule on the product cost and the TAX column in the cart shows as 0.00, which makes sense.

Can I set this up so that the VAT of 20% shows on the TAX column , but not add or take away from the final cost.  I'm pulling my hair out to figure this one out, so if anyone has figured this out, then much help would be appreciated.

Thanks,
antonitus

Joomla 3.4.8
Virtuemart 3.0.12

[Jörgen]

Hello

This is not really a Virtuemart problem.

A salesprice of 19,95 including 20% added VAT gives a price without tax of 19,95 / 1,20 = 16,625.
This is your baseprice without VAT, adding 20 % VAT gives 16,625 x 1,2 = 19,95

regards

Jörgen @ Kreativ Fotografi

[antonitus]

Hi Jörgen,

Thank you very much for your response.

I actually had that figure initially within the TAX section and I applied the 20% VAT rule, etc. But when you view the Tax in the cart, it shows it as 3.33 (it calculates Tax from 16,625 x 20% Tax) instead of 3,99 (final cost of 19,95 x 20% Tax). This is why I am pulling my hair out. The customer will see this Tax of 3.33 and get confused.  So maybe this could be a Virtuemart issue or am I doing this incorrectly. Like I said I tried all variants in the Tax section and I really can't figure it out.  It's very confusing.

Although some of the logical seems ok, for example, 3.33 Tax + 16.625 base cost = 19,95 final cost, which is fine, but if you calculate 20% of Tax on 19.95, it calculates it to 3.99 Tax.  This is the part that is confusing me, maybe I am wrong here and this is how it should be worked out.

Thanks,
antonitus

[Jörgen]

Sadly this is not a matter of opinion.

VAT is defined exactly as I showed You in the first example.

Is is defined as an added value in You case 20 % added to 16,625.

20 % of 19,95 is not the same as adding 20 % to 16,625.

There is no confusion here, check a receipt from any reputable store that adds VAT and You will see how it works.

regards

Jörgen @ Kreativ Fotografi

[antonitus]

You're exactly correct. It was my misunderstanding of how it worked properly.

I really appreciate your help here and you clarified this situation, so thank you very much for that.

Thanks,
antonitus

[antonitus]

I have another issue now.  I want to be able to calculate 20% VAT on the total cost including shipping cost. So for example, Total cost of product = 19.95 + 4.99 shipping cost = 24.94. At the moment, I can see that tax is only calculates on the product, which is 3.33 tax and is shown on the cart as I want it included and not added and that works really well.  Now my issue is, I want the tax calculated on the total overall cost, that includes shipping cost,which is 24.94 and have that extra tax from the shipping cost shown on the cart. So now instead of the tax showing as 3.33, the tax cost shown would be 3.33 (product cost) + 1.00 (shipping cost), should roughly be 4.33 shown on the tax column of the cart.  Like I said before this tax value should be inclusive of the total cost.  I hope I explained this properly.

I tried every tax variation, without success.  Can someone please help me with this as this seems to be a requirement by UK law to include tax from the shipping when doing the accounts at the end of the tax year?

VM: 3.0.12
Joomla 3.4.8

[jenkinhill]

Using default VM templates the ship tax is shown separately and correctly totalled. Does this not work for you?  In the example ship tax is set at 20% in the shipping plugin.

[antonitus]

I have two types of shoppers. One is for shops and hence prices and VAT are slightly different and one is for the public (screenshot attached). This public buyers I am focusing on.

The products for shops to buy is perfect as I wanted to calculate tax for both product and shipping costs as added amount and it works very well. However for the public buyers, I want the tax to be included in the product price and the shipping price and allow it to be seen by the buyer.  I don't want to add tax values to the total price.  If I do not put shipping in, it works perfectly well and shows that the tax included is 3.33. However when I add the shipping to it, it actually adds tax to the shipping cost instead of including tax. So in this case, it is adding the value 1.00 to the total cost, when I merely want them to see that 1.00 as inclusive of the total cost.  So total should be 24.94, instead of 25.94.  Does this make sense?  I actually created a tax rule specifically for shipping only and tried all the tax variants, however it still did not work.  So my question is, why does it calculate tax for the product as inclusive, but cannot do the same for the shipping costs.  Maybe this feature needs to be added as it is required by the UK tax law.

[jenkinhill]

I'm in the UK and have had no problem with the default VAT display.  You don't appear to be using default VM templates, but if you really do need the calculations set out differently then it should be just a case of editing the overrides.

[antonitus]

I wouldn't know how to edit the overrides or even know where to find the overrides to do it.  Any suggestion there would be helpful?

[Jörgen]

Tax on shipping works exactly as tax on products, You add the tax to the shipping cost.

Make sure You calculate the correct shipping cost without tax and put it into the shipping method.
If You have 20 % VAT on shipping Yo enter (Final cost including VAT) / 1,20.

regards

Jörgen @ Kreativ Fotografi

[antonitus]

Jörgen, once again you're a genius.  Why didn't I think of that again.  I added a shipping tax rule, just like before, but this time I did exactly how you described, which was the same for the product tax rule and it worked a treat. The total cost is exactly what I wanted to show on the cart.

You have been extremely helpful and it's much appreciated. One day, I shall understand how to set up online shops using Virtuemart, with your help, now I finally will.

Thanks,
antonitus