> For the complete documentation index, see [llms.txt](https://docs.bossithq.com/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.bossithq.com/vat/vat-calculation/vat-and-discounts.md).

# VAT and Discounts

When discounts are applied to an order, the VAT is recalculated to reflect the reduced taxable amount.

## Case 1: Discount Does Not Exceed Food and Drinks Value

### Calculation Formula

<mark style="background-color:orange;">\[ ( Food and Drink Total - Discount Amount ) ÷ Food and Drink Total ] × Original VAT if the order is not discounted</mark>

### Example

When an order is not discounted:

* **Food and Drink Total**: €19.20
* **VAT**: €2.43

When an order is discounted:

* **Food and Drink Total**: €19.20
* **Discount Amount**: €3.87
* **VAT**: €1.94
  * \[ ( €19.20 - €3.87 ) ÷ €19.20 ] × €2.43

## Case 2: Discount Exceeds Food and Drinks Value

### Rule

When the discount is greater than the food and drink value, it is applied to food and drinks first. Once the discount fully covers the food and drink total, **no taxable amount remains.**

### Example

* **Food & Drink Total:** €19.20
* **Delivery Charge:** €6.00
* **Discount:** €20.00
* **VAT**: €0.00


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