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I have been through all the tax settings several times now, without finding any solution to this problem.

When looking at the shopping cart, the subtotal is displayed with incl. tax, and is correctly calculated from the items in the cart. The Grand total has a value that is the same as the Subtotal excl tax, and if I choose to show Grand total both incl and excl tax, the Grand total excl will correctly be calculated excl of tax of the value of Grant total incl, tax, which as I said before, shows a value being equal to subtotal excl tax.

There are now shipping or discounts in the picture, so subtotal should be the same as the Grand total. The setup is done for Norway, so the VAT is 25 %.

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The simplest answer is to double check the configuration option "Include Tax in Grand Total" found at System > Configuration > Sales > Tax > Orders, Invoices, Credit Memos Display Settings.

Source: http://www.magentocommerce.com/knowledge-base/entry/configuration-sales-tax-orders-invoices-credit-memos-display-settings

If this is correct and still an issue, reply back with some more detail (e.g. plugins that may influence tax calculation, custom theme in place?) and I will go look deeper. Hope this helps you or someone landing here in the future.

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    Thanks. I just found out that by changing "Apply Customer Tax" from "After tax" to "Before tax" solved the problem. This however does not sound logic to me as there shouldn't be any discounts involved, and I now get a warning "Warning tax discount configuration might result in different discounts than a customer might expect"
    – agpett
    Jan 3, 2015 at 17:28
  • Very interesting. That doesn't sound like expected behavior.
    – ddavidn
    Jan 3, 2015 at 19:20

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