Magento 1.7 – Apply Percentage Discount Amount/Value with Tax Rule

discountmagento-1.7shopping-cart-price-rules

I have strange behaviour which has always existed in my magento 1.7.0.2 as far as I am aware.

I have a tax rule of 20% for all products so prices are input without tax.

When creating a Percentage discount in Promotions > shopping cart price rules>

Under Actions tab I am choosing 'percentage of product price" option.

I am setting value to 7%.

When I use the coupon the discounted amount seems work out 20% more. E.g 7×1.2 = 8.2%

So for a real example I have a product with price 519. I apply 7% coupon and the final price is 475.40.

519 to 475.40 is in fact a difference of 8.38%

This happens to all products with regular price and special prices.

I also have this issue with fixed price discounts.

If I want to have a discount of £5 I have to make the value in the shopping cart price rule 4.166. Is this normal behaviour for magento?

I could not find anyone posting about this exact issue anywhere. Maybe I am wording it wrong in my searches.

Now onto my tax settings in system>configuration>sales>tax

Please see image below.

enter image description here

Any help would be much appreciated.

Best Answer

It sounds like your issue is that your discounts are applying to products that already have the 20% tax added to them. If this is the issue, you can solve it by changing your configuration:

Calculation Settings-> Apply Discount on Prices

Change Including Tax to Excluding Tax

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