tax on gift cards

[jake69]

Dear Dale,

It has been some time that I checked in on the board... I was very busy and our DHPOS worked great (v6,39i, THANKS), so never touch a running system :-)

I was looking into the gift card function of DHPOS, which would be a great addon for us to use. Unfortunatly our government forces us to pay taxes for gift cards at the moment we sell them.... so at the current version we cannot use the funktion. Is Austria the only country that has this rule?

Could you please let me know if there is a possibility to use tax on the gift cards?

Thanks and all the best from Austria,

Jake

http://www.stilgewohnt.at

[daleadmin]

That's crazy (and of course, expected). Does that mean that you pay sales taxes when you purchase the gift card and when you use it to purchase merchandise?

Dale

[jake69]

Dear Dale,

Yes, we pay the taxes when purchasing the gift card, but not again when paying with the gift card. The Government wants the tax as early as possible, so that's what they do. So for us to use the gift card function we would need to "sell" the gift card including 20% tax, and then use the credits on the card for purchases without paying tax again. This is a major accounting problem too here in Austria, because we need to keep track of every downpayment and gift card in our accounting, and link the downpayment/gift card with the acctual purchase(s)....

Best regards,

Jake

[daleadmin]

Jake,

Ok, your tax buddies in Austria are just plain nuts. And so far Austria is the only country to tell me about this fine method of collecting taxes on gift card purchases.

This one I am going to have to add to the "think about it" pile and wait for it to bubble up to the top. One problem I see is if a sale is paid in part by a gift card (using up its value) and the remainder by another payment method. In that case part of the sale will be taxed and part will not be taxed. What if different parts of the sale are taxed at different rates? How much of the taxed part goes to the general tax rate and how much goes to the gasoline, tobacco, or alcohol (or all 3) tax rates?

I have no idea.

Dale

[jake69]

Hi Dale,

You are right, but aren't tax collectors nuts by profession?

Since we handle everything (prices in the shop, sales) including tax and the rate is always 20%, I would say the gift card should show the value including tax. So If you deduct an amount from the card it would be including tax.... cost of item 20 Euro including tax, 19 Euro including (already paid) tax on the gift card reduces the remaining amount to be paid to 1 Euro including tax. We pay the 20% tax for 1 Euro.

At the moment I have a stock number for downpayment. I use this one every time if I collect money in advance, and I pay taxes for that amount. Then when the customer collects his goods, I ring up the sales, deduct a "coupon/unit reduction" (which I only use for this purpose) with the amount of the downpayment, and - voila - got the sales minus downpayment.
Tricky 1: this messes up my reporting, since the downpayment does not make any difference in product categories or suppliers (yes, I know I could have a lot of different downpayment stock numbers, but I have a lot of suppliers and a lot of product categories - multiply them to get the amount of stocknumbers neccessary)
Tricky 2: I have to use a pdf writer as printer in order to change the "coupon/unit reduction" to "downpayment" on the customer copy of the receipt....

Still it worked the last 3 years this way.

So thats the story....

Thanks for listening :-) and for your consideration having this one on your pile of maybe to solve later.

Best regards,

Jake

[daleadmin]

jake69,

When I solve this problem it must be solved for all time. This means that it has to work in every country (you never know who will come up with this idea next), for both added and included tax, and for multiple tax rates. There is no point in partially solving this only to have to go back and rewrite the code to solve it a little more later.

Dale