VAT Calculation and Invoicing

[Phil]

Hi guys,

Actually, the VAT in In-Portal is calculated in addition to the total
price, stating that all prices are shown excluding VAT. This way to do
is perfect for a B2B business, because they retrieve the added VAT in
their accounting, but for individuals, at least in Europe, prices need
to appears including VAT.

Until now, the workaround is to set all prices with VAT, and removing
the field "VAT amount" from cart TPL, acknowledging that everything on
the website includes VAT. Doing so, In-Commerce wasn't able to edit a
correct Invoice, because of missing VAT amount.

It’s important to be able to decide if prices are shown with or
without VAT, to be compliant with accounting rules.
Shipping could have different VAT application too. A correct process
for VAT would leads to produce valid invoices, wich can be used
directly by customer.

I propose to achieve it like this:

- in In-Commerce general configuration, by adding a field " display
price : O inc. VAT @ exc.VAT "

- in Groups, ability to select for each group "show prices excluding
VAT" (for professionnal customer), this setting overrides the standard
in-commerce configuration

- all shipping modes have a new checkbox to choose if VAT applies to
the shipping price

- during the checkout, system will:
- if “exc.VAT” is setup
+ ADD VAT to calculate total price
+ display shipping cost exc.VAT

- if “inc.VAT” is setup
+ display VAT amount calculated from total price
+ display shipping cost inc.VAT.
In this last case, the total price won’t change during the entire
order process

- invoices will show prices exc VAT + VAT amount + Total price, as
before.

Please let me know your ideas on this.

Cheers,
Phil.

[Dmitry A.]

Hi Phil,

Thanks for your request.

Can you provide a few samples with the live data so it's more clear on
the difference here.


DA

[Phil]

Hi Dmitry,

here are 2 examples:

- when prices are displayed without VAT, and user want to have a real
invoice, we configure VAT (19.6% in my example, actual french rate),
the result is like this:

Sub-total : 100 $ exc.vat
Shipping : 10 $ exc. vat

VAT 19.6% : 21,56 $ ## if vat apply to shipping, otherwise VAT
would be 19,60 $

Grand Total : 131,56 $ inc.vat

- when prices are displayed with VAT, and user want to have a real
invoice :

Sub-total : 100 $ inc.vat
Shipping : 10 $ inc. vat

VAT 19.6% : 18,03 $ ## Deducted From total price 110 $ if vat apply
to shipping -- otherwise VAT is deducted from 100 $ only, VAT total
would be 16.38 $

Grand Total : 110,00 $ inc.vat

I hope this is more clear.

Phil.

[Alexander Obuhovich]

Phil has a point (no matter, that discussion is 1.5 year old and was abandoned for unknown reason). And especially in some countries (like Latvia) VAT is changed every year (18% -> 21% -> 22%), then keeping VAT used inside the order item record will make sense too.

Dmitry, what's your opinion on that?

[Dmitry A.]

Yes, I agree that we should add this option for In-Commerce.

My thoughts about where to keep the VAT numbers:

1. I see no reason so have VAT stored in OrderItems table since it's the same number of all products in the Order, and we already storing it in the Order.

2. Perhaps we should add new VATIncluded field that will be applied to the Orders table in addition to currently existing - VAT (amount) and VATPercent fields. New field will store the setting for that Order when VAT was Included or Excluded based on described by Phil options.

What do you think?

DA

[Alexander Obuhovich]

Yes, I agree with your proposal.

--
Best Regards,

http://www.in-portal.com
http://www.alex-time.com

[Phil -- wbtc.fr --]

1- for some businesses, like grocery store for example, VAT have a different rate for different type of products.

2- the inclusion/exclusion should apply for products AND shipping types. Many other merchant software even allow to choose from any vat rate previously setup for each product, leaving all possibilities open for merchants.

2011/3/14 Alexander Obuhovich <aik....@gmail.com>

[Dmitry A.]

Hi Phil,

I like your ideas, but think we should stick in this discussion to the original idea (described by you) and may be talk about additional improvements to VAT in separate discussion so there is NO mix up.

You are welcome to start a new discussion and include your ideas for improvement. By the way, your original post here was VERY informative and well defined!

Thanks.

DA

[Phil -- wbtc.fr --]

ok for a new post, and thank you for your appreciation !

2011/3/14 Dmitry A. <dand...@gmail.com>

[Dmitry A.]

Are we ready for a task here?

We all agreed on?

Adding a new VATIncluded field that will be applied to the Orders table in addition to currently existing - VAT (amount) and VATPercent fields. New field will store the setting for that Order when VAT was Included or Excluded based on described by Phil options.

Phil's example how this will be applied:

=============

- when prices are displayed without VAT, and user want to have a real 
invoice, we configure VAT (19.6% in my example, actual french rate), 
the result is like this: 

Sub-total : 100 $ exc.vat 
Shipping :   10 $ exc. vat 

VAT 19.6% :  21,56  $  ## if vat apply to shipping, otherwise VAT 
would be 19,60 $ 

Grand Total : 131,56 $ inc.vat 

- when prices are displayed with VAT, and user want to have a real 
invoice : 

Sub-total : 100 $ inc.vat 
Shipping :   10 $ inc. vat 

VAT 19.6% :  18,03  $  ## Deducted From total price 110 $ if vat apply 
to shipping -- otherwise VAT is deducted from 100 $ only, VAT total 
would be 16.38 $ 

Grand Total : 110,00 $ inc.vat 

=============

DA

[Phil -- wbtc.fr --]

where will appear this new field?

At best, in each produit detail in admin, we should be able to choose one of the pre-defined VAT rates, and this vat field should be included in import/export available fields, using corresponding VAT id

Does "VAT hard stored for each orders" belong to another task?

2011/3/31 Dmitry A. <dand...@gmail.com>

[Dmitry A.]

Hi Phil,

Thanks for your reply!

We'll have a new In-Commerce Configuration Setting which will tell if VAT is included or excluded when the order is placed (please see task I have created below). Current task only covers your initial request which I have summarized.

This is a task for this discussion:

1033: VAT Calculation and Invoicing

http://tracker.in-portal.org/view.php?id=1033

Let's have other improvements related to the VAT (Product specific VAT, Include / Exclude Shipping) in a separate tasks so there is confusion here. You are welcome to start another discussion and properly describe your ideas there if it's okay with you Phil.

Cheers!

DA

[Phil -- wbtc.fr --]

Hi Dmitry,

while I don't have any needs actually about VAT, I'm really happy that we can move on about this subject, which seems to me very important to make inportal the right solution for any sized projects.

I still don't have access to in-commerce tasks, but I bet you've well copy/pasted our discussion :)

I'll create separate subjects for products and shipping related to vat.

Thanks

Phil.

2011/4/4 Dmitry A. <dand...@gmail.com>