# Posttax discounts in invoices

Roman Bertle bertle at smoerz.org
Thu Feb 28 06:24:01 EST 2008

```Hello,

for invoices it is possible to set a discount for each entry. There are
three ways to treat a discount regarding taxes, depending on how
discount_how is set: PRETAX, SAMETIME and POSTTAX. A little example:
Lets consider an invoice with 10 items, the price is \$100, which gives
as raw amount \$1000. Further lets assume that the tax is 10%, and that
the given price is without taxes (taxincluded is 0). The discount shall
be \$10, which means that the discount_type is VALUE. Depending on
discount_how, we get:

* For PRETAX, the discount of \$10 is subtracted from the raw amount,
which yields a net amount of \$990. The 10% tax is \$99, and we get a
gross amount of \$1089. This is the way Gnucash does it.

* For SAMETIME, the discount and the taxes are calculated independently
from the raw amount. The net amount is \$990 after subtracting the \$10
discount, but the 10% tax is taken from 1000%, which is \$100 taxes.
The gross amount is \$1090, and again Gnucash does it this way.

* Now for POSTTAX, IMHO, first should be calculated the gross amount
without discount, which is \$1000, plus 10% of \$1000, i.e. \$1100. Now
we subtract the discount of \$10, and we get the final gross amount
\$1090. Finally to get the correct net amount, we invert the equation
gross = (1+perc/100) * net, and get net = gross / (1+0.1), which is
\$990.91, and the tax is \$99.09. But Gnucash does not work this way, it
gives the same result as for SAMETIME (I use 2.2.3-1)!

Hence first my question: Why does Gnucash the same for SAMETIME as for
POSTTAX, is there something wrong for my considerations?

And a remark: For SAMETIME, in the end the paid tax is not 10% of the
net amount. This can be o.k., e.g. for a discount which cannot be taxed.
But for POSTTAX, I expect the tax rate to be 10%. For example, if one
gives a customer a discount for the paid gross amount, this should be
taxed correctly.

Best Regards, Roman
```