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Description

Dynamic Shipping Tax Calculation For Your Magento 2 Store

Calculate shipping tax depending on product tax rate of products in cart.

The Problem
One Static Tax Rate
For Shipping Costs

Magento 2 by default only supports one static tax rate shipping costs that is applied to all orders, no matter what products are purchased by the customer
However, in some countries, the tax rate for shipping costs actually depends on the product that is purchased. Or in other words, the shipping tax rate depends on the tax rate of the products sold.
Example:
A Magento store sells products with tax classes of 7% and 19%. The store configured the 19% tax class as a static tax rate using the Magento default option for tax class to be applied for shipping costs.
Now when a customer purchases some product with a tax class of 7%, the tax rate used for calculating the tax amount for the shipping costs will be 19%.
As a result, the calculated tax amount for the shipping costs is actually too high, compared to the "correct" shipping costs tax rate of 7%.

The Solution
Dynamic Tax Rates
For Shipping Costs

With the Dynamic Shipping Tax extension for Magento 2 by JaJuMa extension you can now avoid having too high tax amounts on shipping costs.
Instead of using only one static tax class for all of the sales in your Magento 2 store, you can now choose to have shipping tax amounts calculated based on tax rates that are dynamically determined following one of 2 supported options:

  • Use the highest product tax
    or
  • Use highest amount tax
based on products in customer cart.

 

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Details

Dynamic Shipping Tax by JaJuMa In Detail.
Correctly calculated tax on shipping costs following tax rate of products sold.

Tax laws can be complicated and so is the tax calculation.
While Magento provides a number of different options for calculating and displaying tax amounts and information, for some use-cases and country specific tax laws these options are still not sufficient.
One example where tax calculations as provided by Magento default are not enough to meet certain local law requirements is the tax calculation for shipping costs.
While Magento out-of-the-box can only calculate tax on shipping costs with one static tax rate, some countries tax laws require the tax rate for shipping costs to follow the tax rate of the products sold.
As a result, the tax amounts calculated with a static tax rate can be wrong and too high.
In the case of Magento stores that are selling products with different tax rates, a dynamic tax rate for shipping costs is needed to meet regulatory requirements regarding taxes and to avoid too high tax amounts.
This is where our Dynamic Shipping Tax extension comes into play, providing you two options for calculating shipping cost tax based on products sold:

  • Based on the highest product tax in cart
  • Based on highest amount tax in cart

 

Dynamic Shipping Tax - Examples

Examples for "Use the highest product tax":

All Products in Cart have tax class = 7%
-> Shipping tax = 7%


All Products in Cart have tax class = 19%
-> Shipping tax = 19%


Some Product in Cart have 7%, some have 19%
-> Shipping tax = 19%

Examples for "Use highest amount tax":

Example 1
Cart Total 100
		Books (Tax 7%)   60 €
		CDs   (Tax 19%)  40 €
		Shipping Tax -> 7%

Example 2
Cart Total 100
		Books (Tax 7%)   40 €
		CDs   (Tax 19%)  60 €
		Shipping Tax -> 19%

Manual



As easy as it can get::

  • Install Extension,
  • Configure Dynamic Shipping Tax logic to be used

...thats it!


Changelog

 

Version: 1.0.0

  • Initial Release

Compatibility

 

Magento 2.0

Magento 2.1

Magento 2.2

Magento 2.3

Magento 2.4


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