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Gift cards and promotional codes

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Hi,  Can someone please help me with an issue. If I use gift cards the customer can choose an amount but at checkout there is VAT added to the amount.
If I create a promotional code the voucher gets deducted from the price before VAT. and not from the total . All item  prices are marked as VAT included.
How can I sell Vouchers for an amount VAT included, or how can promo code vouchers be deducted from the total sum including VAT ?

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I raised this maybe 2 years ago.

There is something not quite right with gift cards.

 

I don't recall exactly what, but something along the lines that the person buying the gift card is charged VAT, and then the customer spending the gift card is also charged VAT.

Or maybe the customer buys a gift card, is charged VAT, and the spending value is now reduced.

 

eg:

£20 gift voucher bought, but the spending value is reduced to £16.00 due to the vat portion.

The recipient, comes to spend his £16.00 and is charged VAT on top.

 

Like I say, I don't recall exactly what the problem was, but it was enough for me to not bother implimenting it.

It needs some experimentation and looking at.

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(Looking at CC628) In admin, Gift Cards, the admin can choose the Tax Type. Please experiment with setting this to Tax Exempt. (Depends on your local tax laws.)

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There are some (non-specific non-legal advice) articles found from a shallow search.

Basically, if the card/voucher is 'single-purpose', meaning that what it can only be redeemed for is a specific single product or service, VAT is collected with the sale of the card. Consuming the service then depletes the balance on the card. This is because the tax rate is known at all times. The tricky part is to not tax that single-purpose consumption of the card's balance.

A 'multi-purpose' card can be redeemed for anything, and if some things are VAT taxed at different rates (books versus jewelry), VAT is not known at all times, cannot be collected with the sale of the card, and so must be collected when the card is redeemed.

(Again, consult with your local/federal taxing authorities.)

Edited by bsmither

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