RechnerpediaStacked discounts are not added up
A second discount applies to the already reduced price. 20% followed by 10% therefore makes 28%, not 30%: €100 first becomes €80, then €72.00.
Final price = price × (1 − r₁) × (1 − r₂) Price before discount = final price ÷ (1 − r) Discount in % = (old − new) ÷ old × 100
Skonto on gross or net?
Skonto is a price reduction for paying quickly, common on German invoices. It is usually deducted from the gross invoice amount. Mathematically this is the same as deducting it from the net amount and the VAT separately: 2% of gross is 2% of net plus 2% of the tax. In the accounts, Skonto reduces the price and the VAT is corrected proportionally.
Example: with €1,190.00 gross and 2% Skonto you pay €1,166.20. The €23.80 discount consists of €20.00 net and €3.80 VAT.
Is Skonto worth it?
Annual rate = discount ÷ (100 − discount) × 360 ÷ (payment term − discount period)
“2% Skonto if paid within 10 days, otherwise 30 days net” means: waiting 20 days longer costs the equivalent of 36.7% interest a year. That is almost always more expensive than an overdraft, so taking Skonto usually pays off.
Advertising price reductions in Germany
Retailers who advertise a price reduction to consumers must state the lowest total price of the 30 days before the reduction, under § 11 of the Price Indication Ordinance (PAngV). The “advertised price reduction” mode calculates the percentage against that reference price. Individual discounts and perishable goods are among the exceptions. For specific cases, such as comparisons with a recommended retail price, please get legal advice.
Sources
Frequently asked questions
Is Skonto deducted from gross or net?
Usually from the gross invoice amount. The result is the same as deducting from net and tax separately, because both fall in the same proportion.
Why do 20% and 10% not make 30%?
Because the second discount is granted on the already reduced price. Together it is 1 − 0.8 × 0.9 = 28%.
What is the difference between a discount and Skonto?
A discount (Rabatt) is a price reduction, for example for quantity, loyalty or promotions, and is granted immediately. Skonto is a reduction for paying within a short period.
How do I work out the original price?
Divide the reduced price by (1 − discount). For €79.99 after 20% off: €79.99 ÷ 0.8 = €99.99.
What does “lowest price in the last 30 days” mean?
Anyone advertising a price cut to consumers must use as the comparison price the lowest price they charged in the 30 days before. This is meant to prevent artificially inflated comparison prices.