page last edited on 06 March 2019
X-Cart allows to set either VAT-inclusive or VAT-exclusive prices’ representation if you use the VAT/GST addon.
Setting up VAT-inclusive prices has some peculiarities that a store admin should keep in mind when configuring taxes and prices.
The guides below presumes that the VAT/GST addon is installed and enabled.
A price of a product in X-Cart is defined in the ‘Prices & Inventory’ section of the product details page and is the very price that is stored in the database. By default, the product price displayed on the storefront equals the price stored in the database.
A price stored in the database may or may not include VAT for a particular location, depending on the admin’s choice. If taking into consideration the software logic, a product prices stored in the database always includes VAT and the % of VAT applied to the price depends on a location defined in The VAT/GST inclusive prices as defined in the product details are intended for setting on the VAT/GST settings page (Store setup -> Taxes). In case there is no VAT configured for this location or there is a 0% VAT rate applied, one can consider the prices stored in the database as VAT-exclusive.
Whether the prices are displayed as VAT-inclusive or VAT-exclusive in the storefront depends on the “Display prices in catalog including VAT/GST” setting value, for more details see Configuring VAT/GST.
In case “Display prices in catalog including VAT/GST” setting is disabled the system automatically decreases all predefined product prices displayed in the storefront by the % of VAT rate configured for the The VAT/GST inclusive prices as defined in the product details are intended for setting. The actual prices in the database stays as originally defined.
Let’s consider one of the most popular cases in the taxes set-up routine.
A product has a price set to £100 in the database.
A store admin proceeds to taxes configuration and enables the “Display prices in catalog including VAT/GST” option, and sets the “The VAT/GST inclusive prices as defined in the product details are intended for” to the UK. Also the store admin sets several tax rates and defines VAT for the UK as 20% and VAT for e.g. Hungary as 27%.
In this case the product price displayed in the storefront for a UK-based customer will be “£100 inc. VAT” (just the same as defined on the product details page in the admin area), for a customer from Hungary - “£105,83 inc. VAT” and for a customer from a location without a VAT rate defined - “£83.33”.
This happens because X-Cart decreases the original product price by the percent of VAT defined for the location specified in the “The VAT/GST inclusive prices as defined in the product details are intended for” setting.
If a store admin needs to keed the prices set in the database as a basis for VAT calculation for any possible location, it’s necessary set the “The VAT/GST inclusive prices as defined in the product details are intended for” option value to any tax zone with a 0% tax rate and enable the “Display prices in catalog including VAT/GST” option, then set the actual VAT rates for the locations it’s applied for.
If configured the abovementioned way the product price defined in the store admin area as £100 will be taken as a basis for taxation and will be displayed in the storefront for a UK-based customer as “£120 inc. VAT” (£100 + VAT 20%), for a customer from Hungary - “£127 inc. VAT” (£100 + VAT %27) and for a customer from a location with a zero VAT rate defined (or without any VAT rate defined) - “£100”.
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