Magento what is hidden_tax_amount - magento

Question

Could somebody helpme pelase?. I see that Magento in almost all my orders is calculating a tax named hidden_tax_amount . What does this value is related with?. And how can I disable it?.
Here you can see what I'm talking about.
[hidden_tax_amount] => 4.3000
[base_hidden_tax_amount] => 4.3000
[hidden_tax_invoiced] => 4.3000
[base_hidden_tax_invoiced] => 4.3000
Edit:
Ok, I've been digging in my code and fount that this field was introduced in 1.6.0.0 (Mage/Sales/sql/sales_setup/mysql4-upgrade-1.5.9.9-1.6.0.0.php:1616) and the value is get or set here
Mage/Tax/Model/Sales/Total/Quote/Tax.php:391: $address->setShippingHiddenTaxAmount(0);
Mage/Sales/Model/Order/Invoice/Total/Tax.php:85: $totalHiddenTax += $order->getShippingHiddenTaxAmount();
And in Mage/Tax/Helper/Data.php you can find in line 1114 to 1116 the following condition
if ($current->getShippingHiddenTaxAmount() > 0) {
$taxClassAmount[0]['hidden_tax_amount'] = $current- >getShippingHiddenTaxAmount();
}
Then researching more about the issue I found that:
"hidden_tax_amount" holds the substraction of the actual tax amount (on the current order) from the tax amount that should have been applied if there was no discount http://forum.azmagento.com/how-to/grand-total-calculation-v142--82183.html .
What leads me to the point that this is due a wrong tax configuration from my side rather than a bug and is related with a shipping tax. If so, could some body point me in the correct direction please?
Thankyou very much!

Answer 1

For anyone looking to understand the porpouse of hidden_tax_amount let me tell you that is not a bug or a missconfiguration, it's a feature:
it is used by Magento to calculate the amount of tax that is not originally calculated when a product that has a tax is under discount.
For example, you have:
a product named "Pencil" with price of $100.00 and a tax of 16% so the final price will be $116.
a coupon code with 10% off for all the Pencils
(This is important) your store is configured to calculate the discount after tax.
The user will see a final price including tax of 104.4 that is the result of 116 - 11.6. And that is correct.
But legally you can't discount any amount from tax because your base tax is still 100 and not 104.4.
Then Magento hiddes that quantity of money in hidden_tax_amount.
For accounting porpouses this process is correct. Then you can show that value as Tax.
Hope this helps someone else!

Answer 2

I had to give the Magento tax/discount issue some serious thought recently.
To set this problem up, assume there are four parties involved in a transaction, the wholesaler, the retailer, the consumer and the tax man. Assume the retailer is selling an item for £100 to the consumer (including tax), the tax rate is 20% and the wholesaler is providing a 10% discount on the item
The vital point here is that the 10% discount is offered by the wholesaler, not by the retailer. The retailer will get the full £100 for the item, with the consumer paying £90 and the wholesaler making up the remaining £10.
The retailer owes tax on the full amount paid. That is, at a tax rate of 20% £15 of the £90 paid for by the consumer is tax, and £1.67 of the £10 paid by the wholesaler is tax, giving a total tax bill of £16.67 or 20% of the net price (£83.33).
When the consumer receives their invoice, it makes sense to show them only the tax that they have paid, not the total tax paid on the item. However for the retailers accounting, they need to see all the tax that is due, that is the tax due on the portion paid by the consumer paid and the tax due on the portion paid by the wholesaler.
The hidden tax is still tax which has to be paid by the retailer, but it should be hidden from the consumer, because its nothing to do with their part of the transaction.