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. :)
> --
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