Hans Bakker wrote:
One other remark on VAT, VAT is only required for national sales,
international sales have no VAT, even within the EEC.
From a tech point of view, this is not different from the current sales
tax implementation: you can easily setup geo rules for the applicability
of tax rates.
Jacopo
So if you have only customers outside your own country, you normally get
your VAT paid on purchase orders back from the taxman.
Regards,
Hans
On Tue, 2008-02-05 at 07:26 +0100, Jacopo Cappellato wrote:
Hi,
we have already discussed many times about the best way to implement VAT
taxes in OFBiz.
I did some research recently and I've found this page very interesting:
http://en.wikipedia.org/wiki/Value_added_tax
The most interesting aspect, in my opinion, is that, apart from the
differences in the way taxes in general are shown to the customers (e.g.
price with/without tax, as total or per item etc...), that, by the way
are very industry/country specific (and not really related to VAT), the
fundamental difference appears to be the following one:
"Sales taxes are normally only charged on final sales to consumers.
VAT differs from a conventional sales tax in that VAT is levied on every
business as a fraction of the price of each taxable sale they make, but
they are in turn reimbursed VAT on their purchases, so the VAT is
applied to the value added to the goods at each stage of production."
The "Example" paragraph illustrates very well the difference.
Moving these concepts to OFBiz:
Sales Tax:
* tax is computed and collected only for sales orders
* a (monthly) report summarizes the tax collected from customers (i.e
due to the Governemnt)
VAT:
* tax is computed and collected only for sales orders (OK)
* tax should be computed and paid also for purchase orders
* a (monthly) report summarizes the tax collected from customers and the
tax paid to suppliers: the difference is the amount due to the Governemnt
That said, in order to implement VAT tax in OFBiz we could:
1) add a flag to mark the tax as "VAT Tax" (and distinguish it from
sales tax)
2) implement automatic tax calculation for purchase orders
3) implement the monthly report that filters taxes by the flag in point
1 and shows the difference as described above
This doesn't seem very complex; what do you think?
Jacopo
