Taxes on Wholesale Prices

Hi @martynault,

This is a very unusual tax setup, what country is this in? I’ve never heard of a company charging a wholesale customer the tax based on the retail price, from what I understand the tax they pay is based on the actual money they’re paying for the product.

It would be very difficult to achieve this in WooCommerce from what I know. Tax calculation is implicitly tied to the product price (which we replace with the wholesale price in that particular calculation). I don’t think there is a way to separate it.

Would it be possibly to check with the company again to make sure this is what they want? As I mentioned it sounds quite unusual and most commerce platforms aren’t going to be build to do it. You’ll need to custom code.

Our plugin/s can handle everything else but you’ll need a developer to investigate the custom taxing bit if you need to proceed with that. They should be able to do a proof of concept with our free plugin (the premium addon just adds more sophistication and control surrounding how taxes are applied and displayed).

Hope this helps!

Josh

Yes I’ve confirmed it with the company. This is in Canada and obviously isn’t the tax setup our country uses. Canada (british Columbia) uses 12 percent tax on all sales. The reason we’re wanting to charge taxes on the retail price rather than wholesale is so that the company can charge and collect taxes on behalf of their reps. The reps pay the tax in advance to the company and keep the taxes once they sell the product to the end consumer. They do to avoid the reps needing to keep track of the difference they pay between the taxes they paid in wholesale vs. the taxes they collect in retail.

I know this sounds a bit complicated but it’s what they asked haha!

Is there a way to do it or some type of workaround?

Your quick feedback is greatly appreciated!

Marty

Hey Marty,

It sure sounds like an odd way to do it, I’d be interested to hear what an accountant would think of that setup!

Anyway, putting that aside for a moment ??

As far as implementing it goes I did have one thought, but this is going to require a developer regardless (hopefully that is you!)

It’s a deceptively difficult problem because taxes are calculated by determining the location of the person and applying the tax rate to each item in the cart individually then it also gets the grand total of the tax amount separately. So you have a tax amount for each item then you also have a grand total amount shown in the totals.

My suggestion involves entering prices excluding tax, then don’t charge the tax via the tax system for Wholesale customers (you can set an exemption for wholesale customers in WooCommerce Wholesale Prices Premium) and instead calculate the tax yourself manually and add it as a fee to the cart.

The add_fee() function on WC_Cart can help with this (https://docs.woocommerce.com/wc-apidocs/source-class-WC_Cart.html#1953-1981) and you can hook into something like woocommerce_before_calculate_totals to apply the fee.

It’s a bit of a hacky work around but I can’t see another way to do it as WooCommerce wasn’t designed for that type of setup.

If this is a new company I’d strongly advise you get an tax accountant involved and see if there might be some other way to handle it.

Hope this helps!

Cheers,
Josh