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In France, we must add the standard VAT rate (19.6%) on all shipping costs. I am trying to set up a small bookstore, and books have a reduced VAT rate (7%). The problem is the following:
I believe it is a bug. It happens with other woocommerce themes (Wootique and Mystile), I disabled all plugins but woocommerce alone, I checked several times the product tax status (which changes the tax calculation as described above), in the general settings tax tab, tax is enabled and with the standard rate I've checked the shipping option, with the flat rate shipping method (and others) the shipping is taxable.
Does your shipping tax not take the tax rate of the item your shipping?
In the UK I'm fairly certain, if you had a reduced rate item (baby clothing for example) the shipping for that item would use the same VAT rate, not a higher rate.
As Mike stated,
Here in the UK, the VAT for postage/carriage is charged inline with the rate of vat on the item.
So if an item is 0% VAT - no VAT should be charged.
If an item is reduced rate - that rate should be applied to those items.
So if a basket is full of reduced rate items, the carriage must be reduced rate.
if a basket is of mixed rate items, you would charge the highest rate in your basket for shipping costs.
Thanks for your reply.
Here in France, the shipping tax is always the standard rate (even if the cart is full of reduced rate goods). Regarding the shipping tax settings, Woocommerce complies with what you both have explained. As I have not ticked the reduced rate for shipping, no shipping rate is calculated. I have ticked only the standard rate for shipping, it is the only valid choice for me. So it is not a bug, but a missing feature.
The "logic" behind this tax rule in France is that the shipping is an additional "service", separated from the rest of the cart, so with a standard rate tax only.
Thank you for your time spent on this.
I have the same problem here in Germany. Shipping has to be standard tax rate here, no matter what is in the cart. So Woocommerce creates wrong shipping rates for me and I just cannot fix it. This is really a huge problem for me.
Shipping tax class options. Closes #1625.