This section deals with statutory taxes and accounts which are legally required from the company:
You can attach taxes to transactions so that you can:
Since the detailed tax structure is a mechanism for carrying out governments’ policies, and the collection of taxes so critical to their authorities, tax requirements and reporting can be complex. OpenERP has a flexible mechanism for handling taxation that can be configured to meet the requirements of many tax jurisdictions.
The taxation mechanism can also be used to handle other tax-like financial transactions, such as royalties to authors based on the value of transactions through an account.
From the menu Accounting ‣ Configuration ‣ Financial Accounting ‣ Taxes you can define your tax structure. Note that when you use a predefined (localised) chart of accounts, taxes will be configured as well in most cases.
OpenERP’s tax system runs around three major concepts:
You can attach zero or more Purchase Taxes and Sale Taxes items to products, so that you can account separately for purchase and sales taxes (or Input and Output VAT – where VAT is Value Added Tax). Because you can attach more than one tax, you can handle a VAT or Sales Tax separately from an Eco Tax on the same product.
To create a new Tax Code, use the menu Accounting ‣ Configuration ‣ Financial Accounting ‣ Taxes ‣ Tax Codes. You should define the following fields:
You can also see two read-only fields:
You will probably need to create two tax codes for each different tax rate that you have to define, one for the tax itself and one for the invoice amount (the so-called base code) the tax is computed from. And you will create tax codes that you will not link to any tax objects (similar to General Account View types) just to organise the tree (or hierarchical) structure.
To have a look at the structure you have constructed, you can use the menu Accounting ‣ Charts ‣ Chart of Taxes. This tree view reflects the structure of the Tax Codes and shows the current tax situation for the selected period, or for the complete financial year.
The Taxes defined are used to compute taxes on the transactions they are attached to, and they are linked to the corresponding General Accounts (usually VAT accounts) and to Tax Codes, both for the base amount and the tax amount.
To create a new Tax, use the menu Accounting ‣ Configuration ‣ Financial Accounting ‣ Taxes ‣ Taxes.
You define the following fields:
Tip
Using Child Taxes
You can use child taxes when you have a complex tax situation requiring several tax codes to be used.
The fields above apply the taxes that you specify and record them in the general accounts, but do not provide you with the information that your tax authorities might need. Use the Tax Definition tab, parts Tax Declaration: Invoices and Credit Notes to define to which tax codes the tax should be assigned:
When you have created a tax structure consisting of taxe codes and taxes, you can use the taxes in your various business objects so that transactions can be associated with taxes and tax-like charges, such as Eco Taxes (Recupel and Bebat, for instance).
Tip
Retail Customers
When you are retailing to end users rather than selling to a business, you may want to (or be required to) show tax-inclusive prices on your invoicing documents rather than a tax-exclusive price plus tax.
You can assign multiple taxes to a Product. Assuming you have set up the appropriate taxes, you would use the menu Sales ‣ Products ‣ Products to open and edit a Product definition, then:
Generally, when you make a purchase or sales, the taxes assigned to the product are used to calculate the taxes owing or owed.
You can also assign multiple taxes to an account, so that when you transfer money through the account you attract a tax amount. This principle can easily be used when posting purchase invoices for which no products are required.
Taxes on Products and Accounts will usually be national taxes. OpenERP is capable of automatically converting national taxes to intracommunal or export taxes through the concept of Fiscal Positions.
Go to the menu Accounting ‣ Configuration -_> Financial Accounting ‣ Taxes ‣ Fiscal Positions. You can use the fiscal positions to automatically convert national taxes to the required intracommunal or export taxes, according to the fiscal position specified for the customer or supplier.
Fiscal positions allow you to make a mapping from national taxes to intracommunal or export taxes, or to map your accounts according to these criteria. You can link fiscal positions to your customers and suppliers to ensure automatic and easy VAT conversion when posting entries.