Tax calculation issue

Product Development
1

Hi everyone,

I’m having a look at a taxation issue and I think I need some more information on how tax works to proceed. Essentially, the way we’re rounding tax may not be correct, and might result in errors of one cent. There’s a possible solution, but it would take some time to implement (perhaps a couple of days).

Before investing time in this, I want to check what the legal requirements for tax calculations are, because it may be that our existing calculations are acceptable without any changes. @NickWeir and @serenity, do you know of anyone who could review the issue and advise for both UK and Australian tax law? Details are available in the GitHub issue below.

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Hey @MyriamBoure, maybe you have some ideas on this for France in terms of tax requirements? I imagine that the system would differ for each country, so having access to someone that understands the tax requirements for France might be helpful too :slight_smile:

3

I will ask @Oliver if he knows the answer to this. If not we can ask Hilde - one of the Stroudco directors who is an accountant

4

@RohanM @NickWeir

We are obviously expected to calculate the tax correctly, otherwise we aren’t paying the right amount of tax. But we ARE calculating the tax correctly and as you say, it’s a rounding issue. I’ve gone through a few examples using our own tax rate and I didn’t come across any scenario where the difference is more than 0.01. It’s not unusual that you receive a bill and the tax calculation is out by a cent/penny (compared to your own) because the supplier’s software did the rounding differently to yours. This really isn’t a problem.

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@oeoeaio and @RohanM - more input required or are we happy to leave this as it is?

6

Sounds like a 1c / 1p rounding error is ok? I think the way we are treating tax is logical and justifiable, it depends on whether you are considering the fee and the product as two separate taxable entities or as arbitrary components of one entity. I think we can easily make the case for either if we get pulled up on it.

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OK, so given it’s a very small issue we shall close off #847 - @RohanM, time to wrap it up and put it through testing :slight_smile:

8

Hum… @danielle after some investigations for France, it seems it’s ok to calculate VAT either line by line or at the end on the global amount, so it seems to be ok if there is 1 cts gap because of rounding… I think it’s agile to give it a go like that and see how to arrange it later if there is any problem with that one day, which may never happen :wink:

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