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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.

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 of them are activated by default, so that you can activate only the ones relevant for your business.

To activate Sale Taxes, go to Accounting ‣ Configuration ‣ Taxes and use the Activate toggle button to activate or deactivate a tax.

Activate pre-configured taxes in Odoo Accounting

Configuration

To edit or create a Tax, go to Accounting ‣ Configuration ‣ Taxes and open a tax or click on Create.

Edition of a tax in Odoo Accounting

Basic Options

Tax Name

The Tax Name as you want to display it for backend users. This is the label you see while editing Sales Orders, Invoices, Products, etc.

Tax Computation

  • Group of Taxes

    The tax is a combination of multiple sub-taxes. You can add as many taxes you want, in the order you want them to be applied.

  • Fixed

    The tax has a fixed amount in the default currency. The amount remains the same, regardless of the Sales Price.

    For example, a product has a Sales Price of $1000, and we apply a $10 fixed tax. We then have:

    Product’s Sales PricePrice without taxTaxTotal
    1,0001,000101,010.00
  • Percentage of Price

    The Sales Price is the taxable basis: the tax’s amount is computed by multiplying the Sales Price by the tax’s percentage.

    For example, a product has a Sales Price of $1000, and we apply a 10% of Price tax. We then have:

    Product’s Sales PricePrice without taxTaxTotal
    1,0001,0001001,100.00
  • Percentage of Price Tax Included

    The Total is the taxable basis: the tax’s amount is a percentage of the Total.

    For example, a product has a Sales Price of $1000, and we apply a 10% of Price Tax Included tax. We then have:

    Product’s Sales PricePrice without taxTaxTotal
    1,0001,000111.111,111.11

Active

Only Active taxes can be added to new documents.

Tax Scope

The Tax Scope determines the tax’s application, which also restricts where it is displayed.

  • Sales: Customer Invoices, Product’s Customer Taxes, etc.
  • Purchase: Vendor Bills, Product’s Vendor Taxes, etc.
  • None

Definition tab

Allocate with precision the amount of the taxable basis or percentages of the computed tax to multiple accounts and Tax Grids.

Allocate tax amounts to the right 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 label of the tax, as displayed on each invoice line in the Taxes column. This is the label visible to front end users, on exported invoices, on their Customer Portals, etc.

The Label on Invoices is displayed on each invoice line

Tax Group

Select to which Tax Group the tax belongs. The Tax Group name is the label displayed above the Total line on exported invoices, and the Customer Portals.

Tax groups include different iterations of the same tax. This can be useful when you must record differently the same tax according to Fiscal Positions.

The Tax Group name is different from the Label on Invoices

In the example above, we see a 0% tax for Intra-Community customers in Europe. It records amounts on specific accounts and with specific tax grids. Still, to the customer, it is a 0% tax. That’s why the Label on the Invoice indicates 0% EU, and the Tax Group name, above the Total line, indicates 0%.

Include in Analytic Cost

With this option activated, the tax’s 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

For 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’s Sales PricePrice without taxTaxTotal
1,000900.1090.91,000.00

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.

The eco-tax is taken into the basis of the 21% VAT tax