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[NOT A BUG] Applying credits creates VAT problems


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I'll try to keep it short :)

 

When we apply user's credit to an invoice, we get some serious problems for our business as VAT stays the same as before we've applied that credit.

 

For example....VAT (PDV) in Croatia is 23%...and if we create an invoice with some product that costs 120€ (tax included) and then we apply a 60€ credit, we get this:

 

Some product ------- 120.00 €

---------------------------------------------

SUBTOTAL: 97.56 €

TAX (23%): 22.44 €

CREDIT: 60.00 €

TOTAL: 60.00 €

 

But that's not correct and we can have serious problems for not having the right tax amounts on our invoices.

 

Real numbers should be:

Some product ------- 120.00 €

---------------------------------------------

SUBTOTAL: 48.78 €

TAX (23%): 11.22 €

CREDIT: 60.00 €

TOTAL: 60.00 €

 

Basically...credit should be charged as it is deducted....something like:

Some product ------- 120.00 €

Credit ------------------ -60.00 €

 

Please fix this, or give us a workaround for invoice templates....we have tried "bypassing" this, but we always get round numbers when we try doing these calculations on our own, through pdf invoice template

 

P.S. we use inclusive taxing in WHMCS

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You're mixing terms ...

*discount* (which would reduce the price before tax and *credit* (pre-payment) which reduces the price after tax

 

The systems is correct, otherwise i could pre-pay you 97.56, and get the 120 worth of service :D

You don't understand... we are bound by law to have VAT "synchronized" with the total amount on our invoices = there is no way we can use the credit system.

 

We can't have credit deducted and have subtotal remaining the same as it would be without that credit.

 

The problem, i guess, is in inclusive taxing but we need to use it.

 

Like i wrote, we only need a workaround for our PDF template. We'll give it a go on our own once again

Edited by omnigenus
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You don't understand... we are bound by law to have VAT "synchronized" with the total amount on our invoices = there is no way we can use the credit system.

 

We can't have credit deducted and have subtotal remaining the same as it would be without that credit.

 

The problem, i guess, is in inclusive taxing but we need to use it.

 

Like i wrote, we only need a workaround for our PDF template. We'll give it a go on our own once again

 

WHMCS's math is correct and complies with the tax laws of the major countries. I think you are merely misunderstanding the various labels used.

 

Tax is applied to the overall amount of the invoice (the Subtotal), then credits are applied to reduce the complete amount (the Subtotal + Tax). The "Credit" field is simply the amount of credit that has been applied to the invoice, and the "Total" field is the amount remaining to be paid.

Edited by Lawrence
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I was having the same problem. We used the built in affiliate system of WHMCS, and we paid the affiliates with a credit on their next invoice. However we had to stop using the affiliate system because it did not calculate the VAT from the credit added to the invoice. It was a big step backwards when we had to shut down the referral affiliate system.

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A credit to an invoice is similar to a payment transaction, you wouldn't expect the VAT amount to be reduced when a customer pays the invoice would you?

 

If the VAT amount was reduced whenever a credit was used to pay (or part pay) an invoice, it would be all too easy for a customer to exempt themselves from ever being charged VAT. For example, the customer could use the 'Add Funds' feature or overpay an invoice to increase their credit balance. When their next invoice is generated it can be 100% covered by the credit balance that the customer added.. if the VAT was calculated after the credit was taken into account, the customer would have €0.00 VAT on that invoice (23% of €0.00). Do the same every month/year and never get charged VAT.. great for the customer, not so great for you :P

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Tax is applied to the overall amount of the invoice (the Subtotal), then credits are applied to reduce the complete amount (the Subtotal + Tax).

In our case, tax is"deducted" from the overall amount as we use inclusive taxing...but nevermind that.

 

We have a different law and there is no point "chatting" here :shock:

 

If we could only move the credit to the invoice product list, same as a discount is, we wouldn't have this problem at all :P

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