We have an open issue/feature request for SimpleCart to make it add taxes to the shipping costs. After doing a bit of research, it seems there are two possibilities for handling that VAT, at least for the Netherlands
- Add a standard 21% VAT to the shipping costs. In the Netherlands, 21% is the highest VAT rate, so the logic behind that is that it is a safe assumption that is easier to implement than 2.
- Calculate the VAT based on the VAT on each product. If you have two products with 6% VAT, and one product with 21% VAT, your shipping costs would be taxed at 6% for 2/3rds, and 21% for the remaining 1/3rd.
To give an example calculation of the second option with 2 6% products and 1 21% product, if the shipping costs are €9, the additional tax on that would be 6% on €6 (€0,36) and 21% on €3 (€0,63) for a total of €0,99 VAT on the shipping costs. With option 1 it would simply be 21% of 9, or €1,89.
While I’m thinking of implementing option 2 (though given the current SC release, option 1 would be a lot easier by simply specifying a VAT rate on the delivery method object), I want to make sure that it is indeed the expected behaviour in other countries and jurisdictions. Can anyone confirm this is also how it should work for their areas?