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Re: Tax Retencion / Tax Withholding :: Common approach

by
Vauxoo S.A. de C.V., Humberto
- 10/19/2014 01:14:42
Hello Community Guys,

I do not speak where for the standpoint of a technical guy but a functional guy.

We, at Vauxoo, has being involved directly in implementing and deploying of
Withholding (WH) process, localization (L10N) for Venezuela (maintained), Mexico (maintained) and Colombia (unmantained).
Throughout my experience in dealing with Withholding and Fiscal Requirements has left my the bittersweet taste of 
"Universal Withholding System" (UWHS) can not be accomplished, at least with the current approach.

Why do I have that vision of half empty cup, and not half full cup?

Because,
Level 1: for a single country WH are different than others
Level 2: Taxes: Within a single country There are many different type of taxes.
Level 3: Partner: Among Partners WH can be different.
Level 4: Products, for each type of products and each product, please read carefully, WH approach can be have different,
Level 5: Accounting Timing: Should the WH be performed at invoicing or at payment Time, just to seek two approaches, on suppliers or customers.
Level 6: Comparative Units, a la Currency, Statutory Entities set levels that Invoicing or payment should meet to be able to perform a WH. Tax Units as mentioned by @Nhomar.
Level 7: Geographical Zones: if a transaction is performed in different geographical entities inside a country, different approaches to perform WH has to be enforced.
Level 8: Migratory Status: If a foreign entity stands longer or less than set by law different approaches to perform WH has to be enforced.
Level 9: Statutory Entity Entitlement: Government Agencies can entitle a partner to perform WH on behalves of you. Overriding your ability to do so.
Other levels I could be missing, these are the ones that just have come to my mind. each level can have many variants.

I just have talked about Three different countries, that I do know and I have suffered how their fiscal requirement works.
Venezuela, Colombia & Mexico, I can not speak on behalves rest of the world.

Finding a solution that try-to-fit-all-but-the-sink 
I think that at the end will a daunting task and setting it could be overwhelming.

What I think we need is to create a platform that could allow cohabitation of
more than one L10N in a single instance in a multicompany (MC) environment
I think that was once mentioned by @rvalyi.

We have managed to make that cohabitation, in Vauxoo's deploys 
but I have to admit it that was far from a easy repeatable receipt.

We have to push from a framework where a company can be set for a L10N,
I mean If I have three companies: Venezuela, Colombia & Mexico, in a MC environment
I should be able to select which L10N each company in each country will be using,
this way, each L10N, will not overlap among them, any user switching among companies will just
be ruled by the L10N  that company is configured to. Be that I am logged in as
Venezuelan User, only views, fields, and business logic for WH in Venezuela shall be applicable. 

That feature is the basement for this UWHS,
in the meantime we can just work on scaffolding modules,
modules that are hollow, only fields and views that overlaps and business logics
that can end up in spaghetti code.

I am a black hat analyst, i.e., I can see where we can fail, and I am telling
where we could fail, I am not wishing we to fail, the other way around.
I want we to succeed.

Best Regards.

Quien suscribe,

Hbto


On Sat, Oct 18, 2014 at 8:42 PM, Nhomar Hernández <nhomar@gmail.com> wrote:

2014-10-18 18:09 GMT-04:30 Juan José Scarafía (ADHOC) <scarafia.juanjose@gmail.com>:
* Retentions / withholdings: we refer to amounts been retained on PAYMENTS. It depends in receiver, issuer and sum of amount that has been paid on month or similar. 
* Perceptions: amounts being "retained" on INVOICE (depends on receiver, issuer and invoice amounts)

Just to compliment:

In México withholding is "On the tax".
In Venezuela withholding is "On the tax" but on "Invoice time"
In Colombia is like Venzuela AFAICK.
In Brazil other apply.

IMHO, withholding must to be:

- Configured on "Tax Level".
- Have into account the variable David mentioned (Partners (You and customer - You and supplier, Products and Document(s) [Payment, receipt and Invoices])
- Computed as a tax on Account Move Line.
- It need to be recorded ad a "Document" not as a "Tax".
- frquently as Argentina (in Venezuela it happen too!) your Withholding is different even in different cities on th country and the amounts are taken from a no-monetary currency called "Fiscal Unit" (Unidad Tributaria).

In our experience even the computing the withholding itself it really complex (for some of them) and so trivials in other documents, we tried without success build an unique model for Colombia and Venezuela and the "IF's" where too much than we decided do 2 development.


--
--------------------
Saludos Cordiales
 
--
Nhomar Hernandez
 

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