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    Calculating Tax for Exempt Customers on Sales Order

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    shaun
    salesorderstaxpricescalculation

    My retail prices including tax are stored in the Product Sale Price field. The tax Code for my Taxable Customers ST11 is set to Tax Included in price. I also sell to Tax Exempt customers and have created a Fiscal Rule. The issue is that when entering a Sales Order the price is still based on the product Sale Price field but the tax does not get deducted.

    Tax Codes

    ST11 -> 20% [TAX included in price]

    ST2 -> 0% Exempt Sales

    Fiscal Rule Exempt Customer -> Map -> ST11 to ST2

    Product A Sale Price £120

    Customer A Taxable

    Customer B Exempt - > Fiscal Rule applied

    (1) Sales Order selling product A to Customer A

    Product A £100 Tax £20 = £120 correct

    (2) Sales Order selling product A to Customer B

    Product A £120 Tax £0 = £120 incorrect Price should be £100

    I would like to keep the Product Sale Price as Tax Included.

    What is the best way to set OpenERP to calculate the prices correctly for Tax Exempt Customers?

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    shaun
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    One way I have found of implementing this is to create a new price list - Tax Exempt Customers - based on the Taxable Price List and then setting the calculation fields to New Price = Base Price * ( 1 + -0.1667) + 0.00 (Note 0.1667 is negative). I then assign the customer to the price list and the 20% tax is removed by means of calculation.

    2 Answers
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    shaun
    Best Answer

    The solution of creating a price list to to calculate the correct price for Exempt customers is not complete. The reason being that some of the products that I sell are Zero Rate (0%) . Therefore based on a calculated Price list to remove TAX you get the following scenario.

    Product A Tax Code ST11 (20%)

    Price £12 (£10 ex TAX)

    Product B Tax Code ST0 (0%)

    Price £12 (£12 ex VAT)

    Customer B Exempt - > Fiscal Rule applied + Assign to calculated price to remove TAX

    Product A Price £10 correct

    Product B Price £10 incorrect as product B is Zero Rated with a price of £12

    This begs the question of "What is the point of a Tax Code with a setting of TAX included in Price?" unless there is a way of Mapping between Fiscal Positions

    Does this mean that to set up OpenERP correctly all prices should be EX TAX?

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    shaun
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    Is it possible to use the Taxes -> Special Computation Field to calculate the price on logic. ie IF (tax_code = ST11 and ST11_tax_is_included) {Price = Price - ST11_TAX} ELSE {return Price} . Will this create problems with tax reports? Can any one provide me with an example?

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    patrick
    Best Answer

    Your solution is possible, but I wonder why you want your product prices to be with tax included?

    If you would create the prices without taxes, openERP is able to do the tax-calculation correctly, depending on the country of the customer and the existence of the VAT number of the customer. This way, the tax-exempt customer might get a receipt with tax included, but he can get it back from the customs.

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    shaun
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    I am a retail supplier and hence all my customers require the prices inclusive of VAT. I am also using the magento ERPconnector. As I had set the prices in Magento as inclusive of VAT when I imported the products into OpenERP they were based on these values. However, it also seems a bit strange functionally associating TAX codes as Included in Price as this would have been better set at product level and then Taxation could be calculated easier between Taxes. I thought there was a setting elsewhere in the configuration that I had missed.