Wrong VAT at checkout!

Hi Jerome,

we are testing this issue with PayPal payment method (fixed price of 0,35€ + 3.4%), but I want to do other tests later also with other payment methods.
As you can see in the attached file that reports the order screenshot (but it's the same in the checkout process), the VAT amount is wrong.

All the prices are including VAT, also PayPal price is with VAT. I know that there is no tax category option in payment method but it seems that the payment amount is correctly calculated including VAT: 13,45€ (11,03€ + 2,42€ of VAT).

Now if you calculate the correct total VAT, you'll find that the correct total VAT is 71,92€ meanwhile the value actually reported in the order is 69,50€
The difference between 71,92€ and 69,50€ is exactly 2,42€ of VAT, that's why I suppose that in the total amount of VAT of the order the VAT of the payment method (2,42€) is not added to total order VAT.

Thanks Nicolas, I hope this feature can be added as soon as possible.

Depending on how important this feature is to you, this may be of interest....

We explored the payment fee tax challenge during development and testing of the HikaShop AvaTax Connector, which uses Avalara to automatically calculate all sales and use taxes. Our development team discussed this with Avalara's tech support, and here was their response:

"This sounds like a fee that would not be associated with a line on an invoice. It would be similar to freight or misc. fees that typically show up at the bottom of an invoice, again, not associated with any one line item. How I have seen these types of fees handled in the past, is to pass the fee amount as a line item into Avatax, assigning an item code name to the line for mapping purposes in the admin console. Once we assign an item code to the line, we can map this item in the admin console and drive the taxability of the line, like we would any amount."

We have not officially added this feature to our certified integration plugin, as it's a rather uncommon tax requirement. Most people do as Nicolas suggests and simply blend this cost into their product pricing, rather than add separate payment fees. However, we will be happy to add this special capability to the AvaTax Connector once it is requested by a confirmed Avalara client who requires support for payment fee taxes in HikaShop and/or HikaMarket. There would be no charge for this to be added to the connector.

Hi PolishGeek,

the VAT on payment method, at least in Italy, is mandatory, also the invoice must show (in Italy) the price of payment method (example collect on delivery) without VAT and then the corresponding VAT must be added in the total VAT amount.

Hi all
Following this conversation very closely, I guess I can conclude that this is an issue for many European countries. If one charges a payment fee, it has to be taxed (VAT), too. Sure, not too many do apply a payment fee. However, if they do, VAT applies. This is certainly the case in Germany, Italy, Switzerland, Sweden, and I guess many other countries, too.
So, I am very interested in learning when the Ava Tax Connector. Thanks a lot in advance!
Is there a way of being informed?
very best regards,
Christopher

All we need to move forward on adding support for payment fees VAT is for a confirmed Avalara customer to request it for HikaShop/HikaMarket. We would add the feature to the connector, then work closely with that first beta client and their AvaTax account manager to ensure it is implemented seamlessly in their store and everything is being calculated correctly. There will be no charge for this enhancement.