Magento CE 1.7. Say, I have a product, $1799.99 (incl. 8.25% tax) and a 10% off coupon (-$180.00 discount amount). The "Apply Customer Tax" option is set to After Discount, and I am using the "Unit Price" tax calculation method. While debugging I landed at this code that calculates the tax total:
case Mage_Tax_Model_Calculation::CALC_TAX_AFTER_DISCOUNT_ON_INCL:
$discountAmount = $item->getDiscountAmount() / $qty;
$baseDiscountAmount = $item->getBaseDiscountAmount() / $qty;
$unitTax = $this->_calculator->calcTaxAmount($price, $rate, $inclTax);
$discountRate = ($unitTax/$price) * 100;
$unitTaxDiscount = $this->_calculator->calcTaxAmount($discountAmount, $discountRate, $inclTax, false);
$unitTax = max($unitTax - $unitTaxDiscount, 0);
$baseUnitTax = $this->_calculator->calcTaxAmount($basePrice, $rate, $inclTax);
$baseDiscountRate = ($baseUnitTax/$basePrice) * 100;
$baseUnitTaxDiscount = $this->_calculator
->calcTaxAmount($baseDiscountAmount, $baseDiscountRate, $inclTax, false);
$baseUnitTax = max($baseUnitTax - $baseUnitTaxDiscount, 0);
app/code/core/Mage/Tax/Model/Sales/Total/Quote/Tax.php, line 379
Note how $discountRate is obtained: instead of using the tax rate applied to calculate the unit tax it calculates its own value that can be expressed in terms of $rate as $discountRate = $rate / (1 + $rate), or, given $rate = 8.25% (0.0825): 0.0825 / 1.0825 = 0.0762. The discount tax calculated with this rate is then $12.75 and leads to the tax total of $137.18 - $12.75 = $124.43.
Interesting is that in the same routine a few lines below, the hidden tax (i.e. discount amount tax) is calculated using the $rate value (0.0825 in my example):
if ($inclTax && $discountAmount > 0) {
$hiddenTax = $this->_calculator->calcTaxAmount($discountAmount, $rate, $inclTax, false);
$baseHiddenTax = $this->_calculator->calcTaxAmount($baseDiscountAmount, $rate, $inclTax, false);
$this->_hiddenTaxes[] = array(
'rate_key' => $rateKey,
'qty' => $qty,
'item' => $item,
'value' => $hiddenTax,
'base_value' => $baseHiddenTax,
'incl_tax' => $inclTax,
);
app/code/core/Mage/Tax/Model/Sales/Total/Quote/Tax.php, line 393
This “hidden tax” total (in my example: $180 - $180 / (100 + 8.25%) / 100 = $13.72) is later used to calculate the grand total, as in sum of net subtotal, tax and hidden tax, minus discount: $1662.81 + $124.43 + $13.72 - $180.00 = $1,620.96. The problem here is that while calculating the tax total the system has used two different rates on the same discount amount! Is it a bug or a feature?
