Apply tax on tax amount only

Question

Scenario:

I want to implement a 2% tax on all products. I then want to add 8.5% tax on the 2% tax amount. So,

total = (product price) + (2% of product price) + (8.5% of 2% of product price)

How can this scenario be implemented in Magento?

Answer 1

I would think that your easiest method of handling this would be to disable the current Magento tax setup and create a custom order total module that implemented your tax setup.

Here are some resources on creating a custom order total module:

http://excellencemagentoblog.com/blog/2012/01/27/magento-add-fee-discount-order-total/

https://github.com/magentix/Fee

http://astrio.net/blog/magento-development-add-total-row-checkout/

Answer 2

Not sure I understood, but you could just compute is as a single taxation rule.

Cosider the following steps:

total = x + x*2/100 + (x*2/100)*8.5/100

total = x + x*0.02 + x*0.02*0.085

total = x * 1.0234

So just compute as a single rule of 2.34% of taxes.

If you need to calulcate 8.5% on you taxed amount at checkout and have a separate import you could create a custom total module in Magento (have a look here: http://blog.magestore.com/magento-custom-total-models/)