Magento not calculating Tax / VAT 20%

[michaelsanti99]

Having a problem getting Magento to calculate 20% Tax / Vat

I have set Tax Rate to 20% and shipping origin to United Kingdom  but this is whats showing:

Subtotal £84.99

Tax £14.17

Grand Total

£84.99

20% of 84.99 is not 14.17

Any ideas anyone?

[Mboulliung]

Hi,
there is no problem there This is a common 'mistake' when trying to 'back calculate' the VAT.
The VAT is applied on the price excluding VAT.
In your case, my understanding is that you have a total price excluding VAT of 70.825.
Adding VAT is 20% of 70.825 = 14.165.

So subtotal inc. VAT is 70.825 + 14.165 = 84.99.

Magento is right

[askjj]

Hi..I have  a similar query to calculate tax

• I have configured tax slabs for each product, now what is happening is when a product is added to the cart, it takes the MRP and then add the relevant tax to it.
• MRP is always inclusive of tax and hence the tax calculation has to be done as per the below

Eg :- if MRP is 100 and if the tax for this product configured is 14.5%, then the base price before tax is Rs 87.34 (calculated as  (100*100)/114.5, ie . Rs 87.34 ) and tax will be Rs 12.66

can you pls help me how to achieve the same?