WCFM & Germanized – split tax on/off – causing issues with VAT on shipping cost

[SebastianFloKa]

Example for split-tax:
Product category A = VAT10%
Product category B = VAT20%
Customer spent 70$ in products of A and 30$ in product of B, the same ratio (here 70/30) will be applied to calculate the shipping cost: Example for 10$ shipping costs – VAT10% “applied” to 7$ (70% of 10$) and VAT20% to 3$ (30% of 10$). Sounds complicated but it’s just an equation and in the end it’s the legally correct way to handle it for most european countries, Germany in particular. IMPORTANT: This makes only sense to calculate storewise (vendorwise), not overall the customers shopping cart!
Example: If customer buys from 9 stores (products and wcfm-store-invoice sent from stores separately, but one checkout & stripe split pay for customer):
– store 1-8: product category A (together 70€)–> only VAT10% on shipping cost
– store 9: product category A & B (10€ + 10€) –> mixed VAT10% and VAT20% on shipping cost pending on the store internal ratio in the shopping cart
– store 10 product category B (10€) –> only VAT20% on shipping cost

Each store-invoice should be calculated and display VAT on shipping cost along above procedure, not pending on values from other stores.
The displayed VAT in the checkout should be accordingly, so the sum of all individual store VAT’s.
Currently:
– if split-tax is active the required ratio for the shipping cost split is calculated based on the TOTAL of ALL product VAT’s in the checkout, not store-wise separated. This ends up in completely wrong numbers. –> I can send detailed pictures for further explanation if you like.
– if split-tax is deactivated the system takes standard rate of VAT from WC-backend into account for shipping cost even the majority of products might be another VAT – better but also wrong. On top: the vendor is forced to enter net values for shipping costs which is very complicated (see attached picture in next post).

Long story short: Split-Tax in Gemanized-plugin should be possible to be ACTIVATED and then be applied STOREWISE (not overall the shopping card), please.

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[SebastianFloKa]

Attached an example of wrong calculation when split-tax is ON.
The incorrect VAT-sum can be significantly worse than showed here. This issue also affects further steps such as store invoice etc.!

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[WCFM Forum]

HI,

Do you want to calculate Tax based on vendor’s location instead customer’s location?

Thank You

[SebastianFloKa]

Thanks,

Do you want to calculate Tax based on vendor’s location instead customer’s location?

No.
One step back: We talk about tax on shipping cost only! The VAT deducted from gross shipping cost should be dependent on the VAT% of the products and NOT standard VAT rate –> solution to get this is shipping tax split.
Germanized-plugin does this shipping tax split calculation, but based on the complete order because the plugin doesn’t know about different stores (it’s not foreseen). But the calculation should be done per store, not per order.
Attached pictures for explanation, don’t get afraid of the calculation, it’s not as complicated as the first impression is.

Best solution:
Can WCLovers team make WCFM compatible with Germanized-plugin, so that shipping tax split is done storewise? Then checkout, dashboard and all invoices would be correct.
Thanks.

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[WCFM Forum]

We are already discussing this over email, so leaving here.

[SebastianFloKa]

No response to my email-request so far.
Again the issue:
A) If “split tax” is turned OFF in Germanized plugin, shipping prices are taken as NET values and VAT is ADDED (example: vendor enters shipping cost of 10 € but the customer is charged 11,90 €, so 10 € + 19% VAT). But correct would be to leave shipping prices as GROSS values and DEDUCT VAT (10€ shipping cost INCLUDING 1,60€ VAT 19%).
B) If “split tax” ist turned ON in Germanized plugin, shipping prices are taken as GROSS values and VAT is deducted – so far so good! But then it calculates the ratio of VAT percentages over the complete shopping cart. But it would be correct to do this calculation separated per vendor.

Whatever the admin choose, the cart etc. is wrong. I would prefer running my system with issue B) solved, but probably it’s easier for you to solve issue A), which would do for the beginning.

[orth.bastian]

Dear WCMF-Team,

i’m considering to create a project with WCMF. But without correct calculation of tax i won’t start this project. Please develop one of the solutions proposed by SebastianFloKa.

Thanks.

@Sebastian: Maybe we can connect and share problems and solutions about WCMF for germany.

[SebastianFloKa]

Say we go for A) split tax OFF:
Then it’s a general requirement by WooCommerce that shipping has to be entered in NET-values always:
https://wclovers.com/forums/topic/shipping-tax-not-correctly-applying-as-included/
Means to request a bugfix was not correct from my side, looks like that’s how woocommerce operates: Apologies.

But then, if vendor A offers products without tax (private or special businesses) and vendor B with tax (standard business), my expectation is following:
vendor A enters 5 $ Shipping –> 5 $ are taken into account because no tax on product means no tax on shipping.
vendor B enters 4,20 $ shipping –> 5 $ are taken into account because tax (here 19% VAT) on product means 19% VAT for shipping.

It works as long as products only from private vendors are in the cart. Once one single product including VAT is attached to the cart, all shipping costs get applied shipping tax as well –> means 5,95 $ instead of 5 $. This is depending on which product was entered first to the cart or if the shipping destination is changed by the customer.

The point is: This issue is not related to germanized plugin! It’s a systematic error that appears also if germanized is deactivated. It’s caused by the “Shipping tax class based on cart items” at WooCommerce / Settings / Tax! Please inform in case I oversaw anything, otherwise all users of WCFM could and will have incorrect checkout values. See video next post.

[SebastianFloKa]

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[SebastianFloKa]

moved because could be relevant to more people than only those using Germanized plugin:
https://wclovers.com/forums/topic/tax-on-shipping-incorrect-based-on-cart-and-not-on-choice-of-vendor/

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