New VAT Calculation

In this article we will break down the VAT calculation method used in your accounting report and show you how we use it.

The method used is the sum of the roundings which means that we calculate the VAT amount of a unique sale rather than multiply it by the total of quantity sold.

For example, if we have an item sold à 16€ including VAT at 10%, the tax amount collected for the sale of one unit would be (16/110)*10 = 1,4545454545... which we round to 1,45€.

Now, if we sold 426 units of this product, the total VAT amount will be 426*1,45 = 617,70€.

In Summary : 

We have opted for this method for three reasons : 

Meal calculation : if the same product is sold separately once and once as part of a meal, their VAT need to be calculated separately. For the one in the meal, it will have its tax based on unit price as well as the unit price of the other products on the meal and the price of the meal.

Discount calculation : if the same product is sold twice on one order but one unit has a discount applied and the other not, their VAT needs to be calculated separately.

Product sales reporting : in order to have accurate VAT amounts at a product level, we need to calculate each unit of a product sold separately. If we don't, this would result in discrepancies between the sum of the sales shows in the product sales reports and the sales show on the other reports.