Wine Equalisation Tax issue

[Alexi82]

Identified a massive flaw in your handling of taxes.

You have marketed that we can now add a custom tax for handling WET (Wine Equalisation Tax).

WET is supposed to be the sale amount, with 29% WET added. Then GST is supposed to be added to that whole amount (sale plus wet).

If I set it up as instructed, GST is applied to the sale amount, and WET is applied to the sale amount. Both separate and then they are both separately added on to the total amount.

This is incorrect and against ATO rules. It also makes it unusable for us using WET tax in square.

Can this be rectified ASAP?

[Seamus]

Hey @Alexi82,

Thanks for getting in touch.

Adding a custom tax to Square will always calculate a this tax based on the original price of your goods before other taxes (eg GST) are applied. If we're marketing this feature incorrectly anywhere, please send me a PM with more details and we'll have this amended ASAP.

At the moment you're not able to add a tax that will calculate based on a post-other tax amount. Custom taxes will always calculate based on a pre-GST amount. I'll seek clarification with our product team as to whether this is something that can be easily implemented as a change or not. For now though, I would not be using Square to calculate your WET on alcohol sales.

Apologies for the confusion here!

[Alexi82]

You have marketed it on your website that wet is able to be calculated.

 

[Seamus]

Hey @Alexi82,

Thanks for raising this - we've removed references to WET tax from this marketing material.

Obviously this is not ideal, and I'll be passing your feedback to our product team and seeking clarification for how custom taxes are intended to be used on our POS app in Australia.

[Alexi82]

That is really disappointing. 

With a small change to rectify this you could stand out from all the others that don't do it 

Please pass this on as an improvement request. I know loads of ppl who would use it 

[3sonscider]

is there any update on this? I have been trying to cumulatively apply my WET and GST as well for some time, as now customers are asking for the breakdown on their invoices, which I can't currently apply.  Why is there no option to apply gst simply on all the transaction unless the item has a GST exempt flag or similar (some of our products are)

I agree with Alexi - its frustrating

[Seamus]

Hey @3sonscider,

No update at the moment unfortunately. I've shared this thread again internally, I can see that it'd be frustrating to not be able to properly calculate GST and WET in the transaction.

I can't give a timeline as to if or when it may be implemented, but I agree it's something we should be considering to better cater to Australian-specific taxes outside of GST.

[tbook]

Sorry for the difficulties here.  Compound taxes (like WET) are on our roadmap, but are not currently supported.  The best workaround would likely to be to exempt WET items from GST, and create a new tax that combines WET and GST to apply to those items.  I am not a tax expert, so you should check with your tax advisor, but I believe the following rules would charge the correct tax amounts:

GST - 10%

WET + GST = 29% + 10% * 129% = 41.9%

When remitting taxes, of course, you would need to calculate the correct amounts.  Hopefully that is an acceptable workaround until we support compound taxes.

[3sonscider]

yep that I had been doing ever since I couldn't work it out any other way to so it since I joined square almost three years ago.  Its only a recent thing where customers have all of a sudden started asking for the breakdown (which I can appreciate) of the taxational components. but particularly the GST component.

I've now gone back and edited my base price to incorporate the WET component so that then GST can be applied and will give a somewhat honest reflection of the amount Is it perfect? Nope as there is always rounding errors and it doesn't reflect a true base unit price to my products.

Best I can do until square adds some more functionality for the compounding taxes.

thanks for the replies and hopefully this can be added soon.

[SFVineyard]

The issue here is that Customers cannot identify the GST component of their wholesale purchase which obviously they need to do for tax management within their business. 

You can sell B2C without identifying the WET tax for the customer but not B2B.

Squares Invoices also do not support Bank Transfers as a payment method in Aus.

These 2 issues together make the process of B2B transactions for winemakers / sellers in Australia essentially impossible.

[SFVineyard]

Having the same issue. +1 for this feature please!
It's law in Australia, anyone selling wine (and there's a lot) will have this problem.

See here on our Tax Office website: https://www.ato.gov.au/Business/Wine-equalisation-tax/How-much-to-pay/Wholesale-sales/