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Does consistent pricing charge the same tax for all customers?

How do I change the make my pricing consistent across regions?

Does consistent pricing charge the same tax for all customers?



Consistent pricing is used when you are looking to charge your customers the same price across different tax regions. 

It applies when you use the tax Inclusive setting which allows you the total amount of purchase to include the Tax amount. Whereas with Tax Exclusive, the tax rate is applied over the invoice/line-item amount.


When Tax inclusive is calculated without consistent pricing, the system will carve out the merchant’s base tax rate (setup when configuring Consistent Pricing) and apply the tax rate as per the customer’s billing/shipping country.

In most cases, the customer’s country and merchants country would be different meaning a different tax rate that is applied which results in the variation of the total amount. With consistent pricing, the invoice total amount will remain the same.



For eg.: 

Price type - Inclusive (without consistent pricing)

Plan A - $110

Origin country(UK) tax rate - 10%

Total amount- Plan A($100) + tax($10) = $110


For a customer from a different country(Ireland), tax rate - 15% 


Price including tax - Plan A($100) + tax($15) = $115


With consistent pricing enabled, Chargebee will try to maintain the total price as $110 by modifying the base plan price. So, for the above example,


For a customer from a different country(Ireland), tax rate - 15% 

Price including tax - Plan A($93.5) + tax($16.5) = $110


To enable consistent pricing, navigate to the Tax settings page Settings > Configure Chargebee > Taxes. Go to the Catalog Price Type settings by clicking on Manage Catalog Price Types.


Select your currency and choose “inclusive” price type to view the consistent price type settings.


Note:

Taxes rate are not modified to maintain consistent pricing. 

The Plan/add-on/product price is modified to maintain  consistent pricing.


In both Inclusive & Exclusive pricing types, Chargebee will provide a break up of taxes collected.


You can also enable additional settings with the consistent pricing feature,

  • Reduce the price for non-configured regions by removing the tax included

  • In the case of exemptions, reduce the price by removing the included tax instead of destination tax


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