> I am sympathetic to the VAT problem and have quite a bit of
> experience with
> UK VAT.
> Here are my comments:
> 1. UK allow calculation of VAT per item or for the whole invoice,
> but the
> general practice is to calculate per item as it makes it easier to
> allow for
> items with different VAT Rates and zero rated items.
> 2. NOT rounding the VAT on each line is a new one on me because you
> risk
> getting an apparent rounding error unless you print the full
> fraction of VAT
> on the invoice. This could cause problems on returns/refunds.
> 3. In general values printed on any financial document should add
> up exactly
> so the rounding is generally done per item, in the UK anyway.
> 4. Accounting is generally done in whole cents/pence thus avoiding any
> rounding errors providing the data is stored in whole cents/pence e.g.
> Binary Coded Decimal. I understand that some bulk product items are
> priced
> in fractions, but this is rounded at the item line in the invoice
> i.e. when
> it has to enter the accounts.
> 5. Accounting generally keeps tax and VAT out of the profit and loss
> accounting so that the tax/VAT is separated from each item/invoice and
> recorded in a different account.
>
> The logical thing for ofbiz to do to satisfy a variety of tax
> styles is to
> have flags in the database at company level that the code checks
> and acts
> accordingly. We are unlikely to come up with a scheme that works
> for all.
>
> The flags required might be something like this:
> USA
> Tax whole invoice
> Check customer location and local tax rules
> Round whole invoice
> UK
> Tax by line
> Round each line
> I (Italy)
> Tax by line
> Round whole invoice
> and others
>
> For ofbiz to be an international solution, potentially for global
> corporations this is the structure needed. I assume that everyone
> is doing
> local modifications to get around these issues at the moment, so a
> generic
> solution is needed if a little difficult, at first, to implement.
> Hope this is of interest.
>
> Kind regards,
>
> Andrew Ballantine.
>
> -----Original Message-----
> From: Roberto Santori [mailto:
[hidden email]]
> Sent: 19 December 2006 15:26
> To:
[hidden email]
> Subject: Europe and VAT
>
>
> Hi,
> I'm working at the European (Italian/Romanian) version of OfBiz and
> I'm
> struggling with VAT.
>
> The main problem with the current version is the impossibility to
> separate
> VAT from Sales Tax.
> Note also that VAT % could be different for each different line in
> the same
> order (and here a more difficult problem: rounding should be done
> only at
> VAT group level, not for each line in the order).
> Finally, the management of VAT, free gift and accounting: in case
> of free
> gift (zero price) the taxable amount is 0, but the VAT MUST be
> paied anyway
> (by the client or by the vendor), based on the standard price /
> value of the
> gift.
>
> The VAT problem is really a stopper for the entire European
> community. I saw
> the JIRA issue 366, and I'm writing to push.... Pls contact me if
> you need
> help (I'm a newbie in OfBiz but quite expert in european ERP systems
> management).
>
>
> Best regards,
>
> Roberto Santori
>
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