Recently I have taken notice that the tax generated on our store is not correct. Take the following example of a small order containing 2 of the same product. Each product is 11.50, inclusive of the tax already and shipping is not taxed.
Breaking this down, per individual line item, 18% of 11.50 is 2.07, this would mean our taxable amount should total to 4.14, but is stated to be 4.27. Similar cases have been found. Am I calculating something incorrectly here? Is there something I am missing?
Why do you think that shipping is not taxable? Since the delivery is to the EU and the tax is calculated, your shipping is always taxable . So in your order you have 23/11818= 3.51 VAT on goods and 5/11818=0,76 on shipping. Total 3.51+0.76=4.27. VAt is applied to shipping even if the box is not checked (see the explanation next to the box):
This is correct behavior. Shipping is not sold separately it is part of the order cost and is considered in the EU and UK as incidental cost/ service and internally is to be levied with the same VAT as the underlying goods. When it comes to international sales , UCC (EU union customs code ) considers shipping to be a part of the customs value and it is to be levied with duties and VAT.