Step 1: Preheat your oven to 350°F (175°C). Line baking sheets with parchment paper.
Step 2: In a medium bowl, whisk together the flour, baking powder, and salt. Set aside.
Step 3: In a large bowl, cream together the softened butter and granulated sugar using an electric mixer until light and fluffy.
Step 4: Add the milk and vanilla extract to the butter mixture and mix until well combined.
Step 5: Gradually add the dry ingredients to the wet ingredients. Mix on low speed, or by hand, until just combined and forms a cohesive dough. Don't overmix!
Step 6: Divide the dough in half, flatten each into a disk, wrap tightly in plastic wrap, and refrigerate for at least 1 hour.
Step 7: Once chilled, take one disk out (leave the other in the fridge). On a lightly floured surface, roll out the dough to about 1/8-inch thickness.
Step 8: Use a 2-inch round cookie cutter to cut out circles. Then, use a smaller cutter (like a thimble, bottle cap, or piping tip) to cut out the centers, creating the ring shape.
Step 9: Carefully transfer the cookie rings to your prepared baking sheets. You can re-roll scraps once.
Step 10: Bake for 10-12 minutes, or until edges are pale golden brown. Let cool on the baking sheet for a minute or two, then transfer to a wire rack to cool completely.
Step 11: While cookies cool, spread shredded sweetened coconut in a single layer on a clean baking sheet.
Step 12: Bake coconut in the same 350°F (175°C) oven for 5-10 minutes, stirring every couple of minutes, until golden brown. Immediately transfer to a bowl or plate to cool.
Step 13: In a medium saucepan or double boiler, combine soft caramel candies (or bits), milk or heavy cream, and salt.
Step 14: Heat mixture over low heat, stirring constantly, until caramels are completely melted and you have a smooth, glossy sauce. Keep heat low to avoid scorching.
Step 15: Remove pan from heat and stir in the cooled toasted coconut. Mix until every piece is coated.
Step 16: Take completely cooled cookie rings. Spoon the coconut-caramel mixture evenly over the top of the cookies.
Step 17: Gently press the mixture onto the cookie to help it adhere. Let cookies sit for a few minutes on the wire rack to allow the topping to start setting up.
Step 18: Melt the chocolate in a double boiler or microwave in 30-second intervals, stirring until smooth.
Step 19: If using, stir in the vegetable or coconut oil.
Step 20: Dip the bottom of each cookie ring into the melted chocolate, covering the entire bottom surface. Let excess chocolate drip back into the bowl.
Step 21: Place the dipped cookies bottom-down on a clean sheet of parchment paper.
Step 22: Drizzle the remaining melted chocolate back and forth over the tops of the coconut-caramel layer using a fork, piping bag, or spoon.
Step 23: Pop the baking sheet with the assembled cookies into the refrigerator for 15-20 minutes, or until the chocolate is completely set and firm.
Step 24: Once chilled, store or enjoy!