Taxes¶
There are numerous types of taxes, and their application varies greatly, depending mostly on your company’s localization. To make sure they are recorded with accuracy, Odoo’s tax engine supports all kinds of uses and computations.
Default taxes¶
Default taxes define which taxes are automatically selected when creating a new product. They are also used to prefill the Taxes field when adding a new line on an invoice in Accounting Firms mode.
To change your default taxes, go to , select the appropriate taxes for your default sales tax and purchase tax, and click on Save.
Note
Default taxes are automatically set up according to the country selected at the creation of your database, or when you set up a fiscal localization package for your company.
Activate sales taxes from the list view¶
As part of your fiscal localization package, most of your country’s sales taxes are already preconfigured on your database. However, only a few taxes are activated by default. To activate taxes relevant to your business, go to and enable the toggle button under the Active column.
Configuration¶
To edit or create a tax, go to and open a tax or click on New.
Basic options¶
Tax name¶
The tax name is displayed for backend users in the Taxes field in sales orders, invoices, product forms, etc.
Tax computation¶
Group of Taxes
The tax is a combination of multiple sub-taxes. You can add as many taxes as you want, in the order you want them to be applied.
Important
Make sure that the tax sequence is correct, as the order in which they are may impact the taxes’ amounts computation, especially if one of the taxes affects the base of the subsequent ones.
Fixed
The tax has a fixed amount in the default currency. The amount remains the same, regardless of the sales price.
Example
A product has a sales price of $1000, and we apply a $10 fixed tax. We then have:
Product sales price |
Price without tax |
Tax |
Total |
|---|---|---|---|
1,000 |
1,000 |
10 |
1,010.00 |
Percentage of price
The sales price is the taxable basis: the tax amount is computed by multiplying the sales price by the tax percentage.
Example
A product has a sales price of $1000, and we apply a 10% of Price tax. We then have:
Product sales price |
Price without tax |
Tax |
Total |
|---|---|---|---|
1,000 |
1,000 |
100 |
1,100.00 |
Percentage of Price Tax Included
The total is the taxable basis: the tax amount is a percentage of the total.
Example
A product has a Sales Price of $1000, and we apply a 10% of Price Tax Included tax. We then have:
Product sales price |
Price without tax |
Tax |
Total |
|---|---|---|---|
1,000 |
1,000 |
111.11 |
1,111.11 |
Python code
A tax defined as Python code consists of two snippets of Python code that are executed in a local environment containing data such as the unit price, product or partner. Python Code defines the amount of the tax, and Applicable Code defines if the tax is to be applied. The formula is found at the bottom of the Definition tab.
Example
Python Code: result = price_unit * 0.10
Applicable Code: result = true
Active¶
Only active taxes can be added to new documents.
Important
It is not possible to delete taxes that have already been used. Instead, you can deactivate them to prevent future use.
Note
This field can be modified from the list view.
Tax type¶
The Tax Type determines the tax application, which also restricts where it is displayed.
Sales: Customer invoices, product customer taxes, etc.
Purchase: Vendor bills, product vendor taxes, etc.
None
Tip
You can use None for taxes that you want to include in a Group of Taxes but that you do not want to list along with other sales or purchase taxes.
Tax scope¶
The Tax Scope restricts the use of taxes to a type of product, either goods or services.
Definition tab¶
Allocate with precision the amount of the taxable basis or percentages of the computed tax to multiple accounts and tax grids.
Based On:
Base: the price on the invoice line
% of tax: a percentage of the computed tax.
Account: if defined, an additional journal item is recorded.
Tax Grids: used to generate tax reports automatically, according to your country’s regulations.
Advanced options tab¶
Label on invoices¶
The tax label is displayed on each invoice line in the Taxes column. This is visible to front-end users on exported invoices, in customer portals, etc.
Tax group¶
Select which tax group the tax belongs to. The tax group name is the displayed above the total line on exported invoices and in customer portals.
Tax groups include different iterations of the same tax. This can be useful when you must record the same tax differently according to fiscal positions.
Example
In the example above, the 0% EU S tax for intra-community customers in Europe records the amount on specific accounts and tax grids. However, it remains a 0% tax to the customer. This is why the label indicates 0% EU S, and the tax group name above the Total line indicates VAT 0%.
Important
Taxes have three different labels, each one having a specific use. Refer to the following table to see where they are displayed.
Backend |
Taxes column on exported invoices |
Above the Total line on exported invoices |
Include in analytic cost¶
With this option activated, the tax amount is assigned to the same analytic account as the invoice line.
Included in price¶
With this option activated, the total (including the tax) equals the sales price.
Total = Sales Price = Computed Tax-Excluded price + Tax
Example
A product has a sales price of $1000, and we apply a 10% of Price tax, which is included in the price. We then have:
Product sales price |
Price without tax |
Tax |
Total |
|---|---|---|---|
1,000 |
900.10 |
90.9 |
1,000.00 |
Note
If you need to define prices accurately, both tax-included and tax-excluded, please refer to the following documentation: B2B (tax excluded) and B2C (tax included) pricing.
Note
By default, only the Tax excluded column is displayed on invoices. To display the Tax included column, click the dropdown toggle button and check Tax incl..
Affect base of subsequent taxes¶
With this option, the total tax-included becomes the taxable basis for the other taxes applied to the same product.
You can configure a new group of taxes to include this tax or add it directly to a product line.
Warning
The order in which you add the taxes on a product line has no effect on how amounts are computed. If you add taxes directly on a product line, only the tax sequence determines the order in which they are applied.
To reorder the sequence, go to , and drag and drop the lines with the handles next to the tax names.
Extra taxes¶
“Extra taxes” is a broad term referring to additional taxes beyond the standard or basic taxes imposed by governments. These extra taxes can be luxury taxes, environmental taxes, import or export duties taxes, etc.
Note
The method to compute these taxes varies across different countries. We recommend consulting your country’s regulations to understand how to calculate them for your business.
To compute an extra tax in Odoo, create a tax, enter a tax name, select a Tax Computation, set an Amount, and in the Advanced Options tab, check Affect Base of Subsequent Taxes. Then, drag and drop the taxes in the order they should be computed.
Example
In Belgium, the formula to compute an environmental tax is:
(product price + environmental tax) x sales tax. Therefore, our environmental tax has to come before the sales tax in the computation sequence.In our case, we created a 5% environmental tax (Ecotax) and put it before the Belgian base tax of 21%.
See also