I want to apply tax on the total that comes after applying discount such as coupon.
Let me explain you further:
Suppose I have a product in cart that costs 1700 and applied a coupon of FLAT40 which is 40% discount. Now the cart totals are as follows:

Sub total = 1700
Discount (FLAT40) = -680
Grand Total = 1020

Now I want to apply a tax of 12.5% of Grand Total which is 1020. I am not able to achieve using magento's tax rules and tax settings.
Can someone help me how can I achieve my goal.

2 Answers 2


It's pretty simple:

Goto System->Configuration->Sales->Tax and do settings as shown in screenshot.

enter image description here

  • Dexter, my catalog prices (e.g. 1700) are including tax and I want to apply discount on that. You solution is not working for me. Commented Jun 24, 2014 at 10:01
  • 1
    if your catalog price ie: 1700 is including tax why you want to apply it again ? i am not clear on it.
    – Dexter
    Commented Jun 24, 2014 at 10:03

here is my understanding: you want change the price two times, one for coupon and one for tax.

Two things should be done:

  1. create coupon that gives 40% discount, here is the tutorial

  2. set up the tax

And you might give us more information about why you did not achieve your goal, more explanations or images will help a lot

Thank you

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