Please note that this documentation is for the most recent version of this extension. It may not be relevant for older versions. Related documentation can be found in the documentation directory of the extension.
How is VAT calculated? Horizontally or vertically?
Short answer
In the TYPO3 Shop, VAT is calculated horizontally. That means: all line items that share the same tax class are first summed net, and VAT is then applied once to the subtotal of that class. This yields precise tax amounts and a clean, accounting‑friendly result.
Horizontal vs. vertical calculation
- Horizontal (used here): Sum all net amounts per tax class → apply the tax rate once to the subtotal → round at subtotal level.
- Vertical: Calculate and round VAT per line item and then sum up those rounded results.
Why we favor horizontal calculation:
- It avoids rounding noise across many items
- Totals match accounting expectations for aggregated invoices
- Stable, reproducible results even with many micro amounts
How it works in detail
- Group all basket positions by tax class (e.g., 19%, 7%).
- Sum the net for each group (subtotal per tax class).
- Compute VAT for the group once: subtotal × tax rate.
- Round at subtotal level according to your currency precision.
- Sum the gross totals of all groups for the invoice total.
Rounding behavior
- Rounding occurs on the aggregated tax‑class subtotal level (not per line item).
- Currency precision is respected (typically 2 decimals).
- This prevents cumulative rounding differences you often see with vertical calculations.
Example
- Items A, B, C (all 19%): Net 10.01 + 10.01 + 10.01 = 30.03
- VAT (19%) horizontally: 30.03 × 0.19 = 5.7057 → 5.71
- Gross for this class: 35.74
Vertical would calculate tax per line (1.9019 → 1.90 each) and sum 5.70 — a difference due solely to rounding per line. Horizontal keeps the mathematically precise total.
What this means for you
- Clear and audit‑ready totals on invoices
- Less ambiguity in reconciliations with finance systems
- Predictable behavior for promotions and micro‑pricing
Conclusion
VAT is calculated horizontally in the TYPO3 Shop. Identical tax‑class positions are aggregated net, VAT is applied once to the subtotal, and rounding occurs at the subtotal level to provide exact, accounting‑friendly results.
TYPO3 Shop
This extension is an extensive shop for TYPO3 for realizing Webshops, Online-Shops or Payment-Subscriptions (comparable with tt_products, Quick-Shop or Aimeos).