Taxes on Shipping

[michaelbromley]

From #31 (comment):

The same merchant says that if the order contains only zero-rate goods, then no VAT is charged on the shipping. As soon as a 20% product is added to the order, then the shipping should also include 20% VAT. Need to look into this and verify the actual applicable law.

Here's some UK VAT law on the matter from https://www.gov.uk/guidance/vat-on-postage-delivery-and-direct-marketing-notice-70024:

(section 2.2)
[if] I deliver goods to my customer and make an additional charge [then] an additional charge for delivery will follow the liability of the goods.

The important test is whether delivery is included in the contract. You’re making a single supply of delivered goods if, under the contract, you must deliver the goods to a place specified by the customer. This might include the customer’s:
own address
friends or relatives
own customers.

The position is not affected by whether the charge for delivery is separately itemised or invoiced to the customer. In either case there is a single supply of delivered goods for which the VAT liability is based on the liability of those goods.

Examples

Source: http://www.tbdaccountants.co.uk/uncategorized/whats-position-vat-postage/

When you make a supply of delivered goods it is a single composite supply and the liability of the postage charges follows that of the goods.

Example 1: Acom runs a mail order business and supplies three DVDs to a customer in the UK. Acom makes a delivery charge of £3. The sale of the DVDs is a standard-rated supply, so Acom must charge VAT on the delivery charge even though Acom was not charged VAT on the delivery.

Example 2: A customer in Norway orders three DVDs with a delivery charge of £3. The sale is zero-rated as it is an export to a customer outside the EU, so the delivery charge is also zero-rated.

Trap: If a business is contractually liable to deliver the goods, the above rules apply. If, however, the supplier has no contractual obligation to deliver the goods but undertakes the delivery as a separate contract, the delivery charge is always standard-rated.

Tasks

• The Order entity should have the shipping property split into inc/ex-tax, and also the applicable tax rate stored.
• Calculation of which TaxRate to apply to the shipping. Will have to take into account not only the billing/shipping zone, but also the contents of the order, so that e.g. the correct rate of VAT can be applied to the shipping.

This will be a post-alpha task since it is pretty complex and would benefit from further feedback and use-cases.

[michaelbromley]

Simple implementation

This problem is rather complex due to the various laws regulating taxes on shipping. For now, we should implement a rather basic and generic design which covers simple use-cases and can hopefully be extended to accommodate future requirements.

1. Add a new field shippingWithTax to the Order entity.
2. The ShippingCalculator.calculate() method should return 2 figures for with and without tax.
3. These figures are used directly when setting the shipping fields on the Order.