about tax related
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I want to implement vat tax with the ofbiz tax calculation.what should I do
to add that tax process in that. |
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On Apr 7, 2010, at 4:23 PM, Selvakumar Ganesan wrote:
> I want to implement vat tax with the ofbiz tax calculation.what should I do > to add that tax process in that. Setting up a vat tax is not very different from setting up a sales tax: just make sure you select the proper type ("Value Added Tax", VAT_TAX) for the type in the "product rate" screen: https://localhost:8443/accounting/control/EditTaxAuthorityRateProducts?taxAuthPartyId=UT_TAXMAN&taxAuthGeoId=UT A summary by VAT tax will be included in the invoice (as required at least by EU countries). Warning: the report with VAT tax balance is not available ootb. Jacopo |
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I know handling taxes properly is on my plate and from our research we felt that Ofbiz would handle VAT but would not handle tax-on-tax? Can you confirm that? I did not see anything in the entity model for the TaxAuthorityRateProduct that would allow you to specify "level" of tax or something to facilitate tax-on-tax. Also, can you confirm that the VAT implementation is accurate from an accounting perspective? I remember setting up taxes such that "taxes were included in product price" but the resulting accounting entries did not appear correct. These are both off the top of your head questions, if this is not the case then I will do the research. :) |
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Hi BOb,
Just curious, what is exatly tax-on-tax, is this really existing somewhere? I remember a colleague speaking about legal issue with this kind of things, at least in Europe (we had a such thing once in France in nineties and it was a real concern) Thanks Jacques From: "Bob Morley" <[hidden email]> > Jacopo Cappellato-4 wrote: >> >> Setting up a vat tax is not very different from setting up a sales tax: >> just make sure you select the proper type ("Value Added Tax", VAT_TAX) for >> the type in the "product rate" screen: >> >> https://localhost:8443/accounting/control/EditTaxAuthorityRateProducts?taxAuthPartyId=UT_TAXMAN&taxAuthGeoId=UT >> >> A summary by VAT tax will be included in the invoice (as required at least >> by EU countries). >> Warning: the report with VAT tax balance is not available ootb. >> > > I know handling taxes properly is on my plate and from our research we felt > that Ofbiz would handle VAT but would not handle tax-on-tax? Can you > confirm that? I did not see anything in the entity model for the > TaxAuthorityRateProduct that would allow you to specify "level" of tax or > something to facilitate tax-on-tax. > > Also, can you confirm that the VAT implementation is accurate from an > accounting perspective? I remember setting up taxes such that "taxes were > included in product price" but the resulting accounting entries did not > appear correct. > > These are both off the top of your head questions, if this is not the case > then I will do the research. :) > -- > View this message in context: http://n4.nabble.com/about-tax-related-tp1754412p1754964.html > Sent from the OFBiz - User mailing list archive at Nabble.com. > |
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Hey Jacques, To be honest the person I was talking about this requirement for would have been more of an expert than me so I took him at his word that it existed. I did a quick google and came up with a reference for support for this feature in ZOHO (http://blogs.zoho.com/general/support-for-stacked-or-compound-taxes-in-invoices) -- interesting enough the example they site is in my own Canada -- in some provinces. In Canada we have two taxes in most provinces. A Goods and Services tax (5% where I am) and a Provincial tax (8% where I am). So if I were to set these up in Ofbiz I would setup two tax authorities (a federal and a provincial) with appropriate Geo and the TaxAuthorityRateProduct for the two rates. Anyway, apparently in some provinces (Quebec is the one they site) it is a compound tax where ... GST = Total * GST_RATE and PST = (TOTAL + GST) * PST_RATE. Apparently Quebec has 7% PST which (again) is news to me. In Ontario (where I am) I do not believe our PST is a compound tax rate ... In my head I also figured that there may be places that have "bad stuff" taxes like Cigarette or Gas taxes that are VAT taxes but they also may have a standard sales tax that would apply as a compound/tax-on-tax tax. |
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In reply to this post by Bob Morley
On Apr 7, 2010, at 10:33 PM, Bob Morley wrote: > > > Jacopo Cappellato-4 wrote: >> >> Setting up a vat tax is not very different from setting up a sales tax: >> just make sure you select the proper type ("Value Added Tax", VAT_TAX) for >> the type in the "product rate" screen: >> >> https://localhost:8443/accounting/control/EditTaxAuthorityRateProducts?taxAuthPartyId=UT_TAXMAN&taxAuthGeoId=UT >> >> A summary by VAT tax will be included in the invoice (as required at least >> by EU countries). >> Warning: the report with VAT tax balance is not available ootb. >> > > I know handling taxes properly is on my plate and from our research we felt > that Ofbiz would handle VAT but would not handle tax-on-tax? Can you > confirm that? I did not see anything in the entity model for the > TaxAuthorityRateProduct that would allow you to specify "level" of tax or > something to facilitate tax-on-tax. > I am sorry but I don't know about tax-on tax support. However you can do this with an hack like this: tax#1: 10% tax#2: 5% (to be applied on the amount including tax#1) In OFBiz you could setup the following rates: tax#1: 10% tax#2: 5.5% (but the description could be "5% to be applied on taxed mount" or similar). > Also, can you confirm that the VAT implementation is accurate from an > accounting perspective? I remember setting up taxes such that "taxes were > included in product price" but the resulting accounting entries did not > appear correct. If we are talking about accounting transactions, in OFBiz VAT taxes are treated in the same way as sales taxes (i.e. they are both ok or both broken). BTW, I don't know much about "taxes included in product price" feature, but it is important to mention that it is not directly related to VAT taxes: this is part of a requirement for some retail industries in EU where you have to include taxes in the product prices shown in catalogs etc... This is different from the US where, for example, if you go to the grocery store (or restaurant) all the prices are without tax (and tax is computed and added at the POS when you pay) while in most EU countries at the grocery store you will see prices including tax. If in a menu in an Italian pizzeria you see that a pizza costs 7EUR, then you will pay exactly 7EUR. But this has nothing to do with VAT: in fact, apart from these specific retail industries, most companies have catalogs with prices without tax and (VAT) tax is added at the checkout etc... exactly as in OFBiz. The main gap as regards VAT is the report that shows the due tax balance to the government. The main difference between VAT and sales tax is that a company: 1) pays VAT when it purchases goods from suppliers (this is the main difference with sales taxes) 2) collects VAT when it sells goods to customers (the same of sales tax) At the end of each month you have to pay to the government the difference between what you have collected and what you have paid: VAT_due_to_the_government = VAT_collected_from_customers - VAT_paid_to_suppliers If VAT_due_to_the_government is negative (for example if in a month you have purchased but not sold) then you don't have to pay and the balance is carried to the next month Hope it helps, Jacopo > > These are both off the top of your head questions, if this is not the case > then I will do the research. :) > -- > View this message in context: http://n4.nabble.com/about-tax-related-tp1754412p1754964.html > Sent from the OFBiz - User mailing list archive at Nabble.com. |
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In reply to this post by Bob Morley
Thanks for the explanation Bob,
Looks like it's very specific to Canada Jacques From: "Bob Morley" <[hidden email]> > Jacques Le Roux wrote: >> >> Hi BOb, >> >> Just curious, what is exatly tax-on-tax, is this really existing >> somewhere? >> I remember a colleague speaking about legal issue with this kind of >> things, at least in Europe (we had a such thing once in France >> in nineties and it was a real concern) >> >> Thanks >> >> Jacques >> > > Hey Jacques, > > To be honest the person I was talking about this requirement for would have > been more of an expert than me so I took him at his word that it existed. I > did a quick google and came up with a reference for support for this feature > in ZOHO > (http://blogs.zoho.com/general/support-for-stacked-or-compound-taxes-in-invoices) > -- interesting enough the example they site is in my own Canada -- in some > provinces. > > In Canada we have two taxes in most provinces. A Goods and Services tax (5% > where I am) and a Provincial tax (8% where I am). So if I were to set these > up in Ofbiz I would setup two tax authorities (a federal and a provincial) > with appropriate Geo and the TaxAuthorityRateProduct for the two rates. > Anyway, apparently in some provinces (Quebec is the one they site) it is a > compound tax where ... GST = Total * GST_RATE and PST = (TOTAL + GST) * > PST_RATE. Apparently Quebec has 7% PST which (again) is news to me. In > Ontario (where I am) I do not believe our PST is a compound tax rate ... > > In my head I also figured that there may be places that have "bad stuff" > taxes like Cigarette or Gas taxes that are VAT taxes but they also may have > a standard sales tax that would apply as a compound/tax-on-tax tax. > -- > View this message in context: http://n4.nabble.com/about-tax-related-tp1754412p1755781.html > Sent from the OFBiz - User mailing list archive at Nabble.com. > |
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In reply to this post by Jacopo Cappellato-4
About VAT we have also
http://cwiki.apache.org/confluence/display/OFBIZ/VAT Jacques From: "Jacopo Cappellato" <[hidden email]> > On Apr 7, 2010, at 10:33 PM, Bob Morley wrote: > >> >> >> Jacopo Cappellato-4 wrote: >>> >>> Setting up a vat tax is not very different from setting up a sales tax: >>> just make sure you select the proper type ("Value Added Tax", VAT_TAX) for >>> the type in the "product rate" screen: >>> >>> https://localhost:8443/accounting/control/EditTaxAuthorityRateProducts?taxAuthPartyId=UT_TAXMAN&taxAuthGeoId=UT >>> >>> A summary by VAT tax will be included in the invoice (as required at least >>> by EU countries). >>> Warning: the report with VAT tax balance is not available ootb. >>> >> >> I know handling taxes properly is on my plate and from our research we felt >> that Ofbiz would handle VAT but would not handle tax-on-tax? Can you >> confirm that? I did not see anything in the entity model for the >> TaxAuthorityRateProduct that would allow you to specify "level" of tax or >> something to facilitate tax-on-tax. >> > > I am sorry but I don't know about tax-on tax support. > However you can do this with an hack like this: > tax#1: 10% > tax#2: 5% (to be applied on the amount including tax#1) > > In OFBiz you could setup the following rates: > tax#1: 10% > tax#2: 5.5% (but the description could be "5% to be applied on taxed mount" or similar). > >> Also, can you confirm that the VAT implementation is accurate from an >> accounting perspective? I remember setting up taxes such that "taxes were >> included in product price" but the resulting accounting entries did not >> appear correct. > > If we are talking about accounting transactions, in OFBiz VAT taxes are treated in the same way as sales taxes (i.e. they are both > ok or both broken). > BTW, I don't know much about "taxes included in product price" feature, but it is important to mention that it is not directly > related to VAT taxes: this is part of a requirement for some retail industries in EU where you have to include taxes in the > product prices shown in catalogs etc... This is different from the US where, for example, if you go to the grocery store (or > restaurant) all the prices are without tax (and tax is computed and added at the POS when you pay) while in most EU countries at > the grocery store you will see prices including tax. If in a menu in an Italian pizzeria you see that a pizza costs 7EUR, then you > will pay exactly 7EUR. > But this has nothing to do with VAT: in fact, apart from these specific retail industries, most companies have catalogs with > prices without tax and (VAT) tax is added at the checkout etc... exactly as in OFBiz. > The main gap as regards VAT is the report that shows the due tax balance to the government. > The main difference between VAT and sales tax is that a company: > 1) pays VAT when it purchases goods from suppliers (this is the main difference with sales taxes) > 2) collects VAT when it sells goods to customers (the same of sales tax) > At the end of each month you have to pay to the government the difference between what you have collected and what you have paid: > VAT_due_to_the_government = VAT_collected_from_customers - VAT_paid_to_suppliers > If VAT_due_to_the_government is negative (for example if in a month you have purchased but not sold) then you don't have to pay > and the balance is carried to the next month > > Hope it helps, > > Jacopo > > > >> >> These are both off the top of your head questions, if this is not the case >> then I will do the research. :) >> -- >> View this message in context: http://n4.nabble.com/about-tax-related-tp1754412p1754964.html >> Sent from the OFBiz - User mailing list archive at Nabble.com. > > |
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In reply to this post by Jacopo Cappellato-4
Jacopo Cappellato schrieb:
> If in a menu in an Italian pizzeria you see that a pizza costs 7EUR, then you will pay exactly 7EUR. Ha, in Italy sometimes the final bill will include a tax called Coperto ;-) SCNR Christian |
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Was curious
http://wanderingitaly.com/blog/article/615/coperto-the-italian-cover-charge Jacques From: "Christian Geisert" <[hidden email]> > Jacopo Cappellato schrieb: > >> If in a menu in an Italian pizzeria you see that a pizza costs 7EUR, then you will pay exactly 7EUR. > > Ha, in Italy sometimes the final bill will include a tax called Coperto ;-) > > SCNR > Christian > |
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In reply to this post by Christian Geisert
On Apr 8, 2010, at 11:40 AM, Christian Geisert wrote: > Jacopo Cappellato schrieb: > >> If in a menu in an Italian pizzeria you see that a pizza costs 7EUR, then you will pay exactly 7EUR. > > Ha, in Italy sometimes the final bill will include a tax called Coperto ;-) He he... "coperto" is actually not a tax, it is what you pay to the restaurant for the "service": people serving you, the usage of dishes and forks, the bread, that is always free in Italian restaurants (we eat a lot of bread!) but on the other hand you have to pay for the water (that is free in the US). Another interesting difference is that you don't have to pay the tip (rather unusual in pizzerias, a bit more common, but no more really expected in restaurants). But yeah, I have over simplified my example :-) Jacopo > > SCNR > Christian |
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In reply to this post by Bob Morley
I'm speaking outside my personal experience here, but in the US, there
are many industries that have an excise or similar tax applied to particular products. Gasoline, tires, and cigarettes come immediately to mind, just because they have signs disclosing the excise tax. If the manufacturer sells at retail, a sales tax may also be applied, which would be a tax-on-tax. It isn't really rare, just unusual for most people. Hotels often pay a room tax, but I can't remember if they collect sales tax on top (goods or services)?. On Wed, 2010-04-07 at 15:15 -0800, Bob Morley wrote: > > Jacques Le Roux wrote: > > > > Hi BOb, > > > > Just curious, what is exatly tax-on-tax, is this really existing > > somewhere? > > I remember a colleague speaking about legal issue with this kind of > > things, at least in Europe (we had a such thing once in France > > in nineties and it was a real concern) > > > > Thanks > > > > Jacques > > > > Hey Jacques, > > To be honest the person I was talking about this requirement for would have > been more of an expert than me so I took him at his word that it existed. I > did a quick google and came up with a reference for support for this feature > in ZOHO > (http://blogs.zoho.com/general/support-for-stacked-or-compound-taxes-in-invoices) > -- interesting enough the example they site is in my own Canada -- in some > provinces. > > In Canada we have two taxes in most provinces. A Goods and Services tax (5% > where I am) and a Provincial tax (8% where I am). So if I were to set these > up in Ofbiz I would setup two tax authorities (a federal and a provincial) > with appropriate Geo and the TaxAuthorityRateProduct for the two rates. > Anyway, apparently in some provinces (Quebec is the one they site) it is a > compound tax where ... GST = Total * GST_RATE and PST = (TOTAL + GST) * > PST_RATE. Apparently Quebec has 7% PST which (again) is news to me. In > Ontario (where I am) I do not believe our PST is a compound tax rate ... > > In my head I also figured that there may be places that have "bad stuff" > taxes like Cigarette or Gas taxes that are VAT taxes but they also may have > a standard sales tax that would apply as a compound/tax-on-tax tax. -- Matt Warnock <[hidden email]> RidgeCrest Herbals, Inc. |
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Thanks,
But yes it's weird to pay a tax on a tax, isn'it? Jacques From: "Matt Warnock" <[hidden email]> > I'm speaking outside my personal experience here, but in the US, there > are many industries that have an excise or similar tax applied to > particular products. Gasoline, tires, and cigarettes come immediately > to mind, just because they have signs disclosing the excise tax. If the > manufacturer sells at retail, a sales tax may also be applied, which > would be a tax-on-tax. It isn't really rare, just unusual for most > people. Hotels often pay a room tax, but I can't remember if they > collect sales tax on top (goods or services)?. > > On Wed, 2010-04-07 at 15:15 -0800, Bob Morley wrote: >> >> Jacques Le Roux wrote: >> > >> > Hi BOb, >> > >> > Just curious, what is exatly tax-on-tax, is this really existing >> > somewhere? >> > I remember a colleague speaking about legal issue with this kind of >> > things, at least in Europe (we had a such thing once in France >> > in nineties and it was a real concern) >> > >> > Thanks >> > >> > Jacques >> > >> >> Hey Jacques, >> >> To be honest the person I was talking about this requirement for would have >> been more of an expert than me so I took him at his word that it existed. I >> did a quick google and came up with a reference for support for this feature >> in ZOHO >> (http://blogs.zoho.com/general/support-for-stacked-or-compound-taxes-in-invoices) >> -- interesting enough the example they site is in my own Canada -- in some >> provinces. >> >> In Canada we have two taxes in most provinces. A Goods and Services tax (5% >> where I am) and a Provincial tax (8% where I am). So if I were to set these >> up in Ofbiz I would setup two tax authorities (a federal and a provincial) >> with appropriate Geo and the TaxAuthorityRateProduct for the two rates. >> Anyway, apparently in some provinces (Quebec is the one they site) it is a >> compound tax where ... GST = Total * GST_RATE and PST = (TOTAL + GST) * >> PST_RATE. Apparently Quebec has 7% PST which (again) is news to me. In >> Ontario (where I am) I do not believe our PST is a compound tax rate ... >> >> In my head I also figured that there may be places that have "bad stuff" >> taxes like Cigarette or Gas taxes that are VAT taxes but they also may have >> a standard sales tax that would apply as a compound/tax-on-tax tax. > > > -- > Matt Warnock <[hidden email]> > RidgeCrest Herbals, Inc. > |
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