Chris,
In Australia, it is required to show the tax-inclusive prices. There are
also rules about showing the amount of GST - if the total order is more
than $50 (I think), you need to show the GST component as a subtotal; if
it is smaller your can get away with a statement like ("The total price
includes GST"). The latter is really designed for small traders (like
corner stores) that almost never sell large quantities. There is no
legal require to show the GST component at the item level, although
there is nothing to stop you doing this provided the above rules are
adhered to (a lot of business do include the item-level tax component).
Re: your last comment, I think it is both marketing and tax. We need a
little more flexibility to be able to display the right thing to
users/customers (in this context, "the right thing" means whether to
show tax-inclusive price, ex-tax price, tax component, item level or
order level tax subtotals). The other critical thing is to make sure the
GL tracks the tax component. I've found I can do all/most of these
things with the current implementation, the only hassle being that I
have to store all my prices ex-tax - this is slightly painful because my
suppliers generally provide inc-tax prices and I have to reach for my
calculator :-)
Cheers, Iain
Chris Howe wrote:
In the US, only the end user is paying sales tax as
well, yet we display prices excluding sales tax.
Is the practice of quoting/showing prices including
VAT a government requirement or a market custom?
The reason why I'm asking this question is because the
whole discussion about how to treat VAT is based on
US/nonUS marketing practices. The US has marketing
practices of certain price points that give the
illusion of value (ie $9.99, $49.00) or of using round
numbers (ie $10.00, $50.00) for simplicity with all of
these illusionary value numbers not including tax.
Yet, the VAT/GST countries want to use the same
illusion of value or simplicity but have it include
the tax adjustment. If it's an issue of marketing, the
solution should be handled by a marketing/ content/
ecommerce approach, if it's an issue of tax, the
solution should be handled by a price adjustment/ tax
approach.
--- Jacques Le Roux <[EMAIL PROTECTED]>
wrote:
From: "Chris Howe" <[EMAIL PROTECTED]>
Thanks for the responses, I guess I wasn't clear
on my
question. If we agree on a price that is subject
to
VAT, at who's discretion is it that the agreed
price
is VAT inclusive/exclusive.
ie,
the base price is 100
VAT = 10%
final price = 110
When two parties agree upon a price, the agreed
price
can either be 100 VAT exclusive or 110 VAT
inclusive,
it's the same agreement and the end payment is 110
in
both situations. Who says that you have to list
each
item on an invoice as VAT inclusive? Is it
government
mandated that prices are promoted as VAT inclusive
or
is it simply the custom of the marketplace?
For an agreement (B2B you mean I guess, because
there is no agreement in retail and there prices are
fixed unilateraly - not in some
parts of Africa BTW - always VAT inclusive) price
are always VAT exclusive because only "end users"
(customers) are paying VAT.
In fact people that collect VAT for a tax authority
(in the context of their work, me for instance) do
not pay VAT for what they
need in their business (they pay but when the send
back VAT they have collected they deduce VAT they
have paid). Of course ASA I'm
going to buy bread I will pay VAT and will never see
that money back (some are juggling with that but -
no only with bread of
course -, I already did see bad results, as
everybody know : juggling is an art ;o). Some might
say that it's not really true that I
never see my money back : hospitals, roads, schools,
etc. : 43% of them come from VAT in France.
HTH
Jacques
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