Net/Gross Prices

Generally, different business scenarios may require prices to be displayed either as net prices or as gross prices. Depending on the type of prices (net or gross) stored with the product data, some calculations may apply in order to display the prices correctly according to the intended business model, that is, either without the sales tax or including the sales tax. To this end, Intershop Commerce Management features a powerful price/tax calculation mechanism as well as flexible configuration options.

Note: The settings mentioned here and, consequently, the corresponding calculations affect product prices (incl. warranties and gift wrapping), shipping costs, surcharges and payment costs as well as promotion-based discounts.

With respect to determining net/gross prices, the following details are important:

  • Price type

    Specifies the type of prices (net or gross) as stored in the data repository. Must be set as part of the pricing preferences, see Managing Pricing Settings.

  • Price display

    Specifies, individually for each customer type, whether the storefront prices shown to this customer type are net prices or gross prices. Must be set as part of the pricing preferences, see Managing Pricing Settings.

  • Tax calculation service

    Calculates the possible difference between the given price type (net or gross) and the selected price display preference (net or gross), and propagates the applicable taxation data to any following process.

    Intershop Commerce Management provides two standard services (Product VAT Exclusive Taxation and Product VAT Inclusive Taxation) that determine the net price or the gross price as required for display purposes, see Managing Tax Calculation Services. Other tax calculation services (custom or third-party) can be implemented on a project-specific base.

  • Tax class

    Product-specific setting that defines which tax class applies and must be used by the tax calculation service. Can be set as part of the product pricing, see Managing Product List Prices and Cost Prices.

    The default tax classes are "FullTax", "ReducedTax" and "NoTax". The available tax classes can be set up by the central administrator.

Be aware that when calculating net prices or gross prices, Intershop Commerce Management uses other taxation data like tax jurisdictions, tax classes, tax rates etc., which are defined by the system administrator. For detailed information about configuring taxation data, system administrators can refer to Guide - Locales, Tax Data, Currencies and Exchange Rates.

The following table outlines the possible scenarios with respect to price type and price display, and indicates the (default) tax calculation service to be applied accordingly.

Table 1. Price/tax calculation scenarios
Price type Price display Service
A net net Product VAT Exclusive Taxation
B net gross Product VAT Exclusive Taxation
C gross net Product VAT Inclusive Taxation
D gross gross Product VAT Inclusive Taxation
Note: Make sure to always enable the appropriate tax calculation service according to the price type, even if it is not necessary for calculating the display prices (scenarios A and D above). In addition to actually determining the net prices or gross prices, these services also facilitate other taxation data (tax jurisdictions, tax rates, etc.) to any following process.