how to apply 20% discount

What could be easy then apply a 20% discount to your product in the e-shop! Nothing!

Ok, lets check it out from prospective of accounting. We have 1 product, that cost € 79.50. Let’s look at the order with 20% discount and Dutch VAT

Products Model Price (ex) Tax Price (inc) Total
1 x Your product MODEL-1 € 66.81 19% € 79.50 € 79.50
Sub-Total: € 79,50
20.00 % Discount: € -15,90
incl. VAT 19%: € 10,15
Total w/o tax: € 53,45
Total: € 63,60

Ok, the amount you need to book in your accounting is €53,45 you always work without VAT with your accountant. Which is a good deal because normal price €66,81

So, if you ask your accountant, how much discount you’ve got (if you’re a reseller, it means how much margin did you get on reselling this product – the answer would be € 66,81 – €53,45  = € 13,36

But I’ve just seen the discount being €15,90 Who’ve stolen €2,54!!!


I hope I’ve got everybody lost by now. 🙂 So it’s not very easy to apply the discount. If you want to do it correctly, you should try to follow the rules:

  • do ALL operations such as discounts only with amounts BEFORE applying VAT.
  • Application of VAT must be always the last step in your operations.

So, that’s how the information order above should look like

Products Model Price (ex) Total
1 x Your product MODEL-1 € 66.81
€ 66.81
Sub-Total: € 66.81
20.00 % Discount: € -13,36
Total w/o tax: € 53.45
incl VAT 19% € 10.15
Total: € 63,60

Now I ope it’s a bit clearer.

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