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I am facing an issue with Magento1.9.2.4. My store is Incl. Of Tax, having 7% tax rate.

Here is the admin panel tax settings screen-shot: enter image description here

When I am going to place order with shipping (Incl. of Tax 7%) and Products (Incl. of tax 7%) and coupon discount. The grand total amounts are not what they should be,Like: $p1 = $9.00 $p2 = $86.00 discount =$9.00 Shipping = $10.00

So, Subtotal after discount is : (9+86) - 9 = 86.00 on which the tax will calculate ((86*7)/107)= 5.6262 = 5.63  
Shipping also has 7% tax:
((10*7)/107) = 0.6542 = 0.65 
So the total tax is : 6.28 [to recheck via grand-total incl. of tax ((96*7)/107)] 
and if I add the shipping
to Subtotal after discount = 86 + 10 = 96 
but it is showing 95.99

which is completely wrong.

Here are cart page screen-shot: enter image description here

And one more thing is, the same scenario will give different tax of paypal.

I am checking on default Magento no customization. enter image description here

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  • I'm not sure how Magento is getting 95-9+10=89.71, but 7% of 89.71 is 6.28, which Magento calculated correctly. Your method of calculating tax is totally wrong (7% of 10 is 0.7, not 0.65). Your paypal screenshot has not only different pricing for your test products, but also a different tax rate (8.6%), which paypal may calculate based on billing or shipping address. I would make sure your indexers and cache is updated before testing checkout scenarios, especially if your changing product pricing.
    – andyjv
    Jun 27, 2018 at 17:57
  • @andyjv, My store is Incl. of tax but paypal is showing prices Excl. of Tax, that's why different and paypal tax rate is same that is 7% but is calculate before discount not after discount as my magento store that's the issue. The tax formula is correct because all the price on my store is Incl. of Tax means I have price 107% of every product instead of 100%. Hope you got it.
    – Yogita
    Jun 28, 2018 at 5:49
  • In that case, I can at least figure out Paypals method: It calculates the tax based on pre-discount product prices plus the shipping cost. So, Tax = (($p1+$p2+$shipping)*0.07); however that total is actually 6.869, which I would expect to be rounded up to 6.87, and give you the $96.00 you're looking for. I have not been able to figure out how Magento is doing its calculation.
    – andyjv
    Jun 28, 2018 at 15:03
  • ((96*7)/107) = 6.28034 and then 96 - 6.28034 = 89.71963. So that's where those numbers are coming from, and again another rounding error. However I noticed that if I try to add tax to your non-tax Product2: 80.38*1.07 I get 86.0066, which should round up to 86.01.
    – andyjv
    Jun 28, 2018 at 16:04

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