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Setting

1. Odoo Default Chart of Accounts

A quick overview of key tax-related accounts in Odoo. Account names and codes can be customized as needed.

1.1 Tax Paid

• Type: Current Asset
• Use: Tax paid to vendors, reclaimable from the government.
• Note: Often not used in the U.S. — follow local tax rules.
  
  

1.2 Tax Received

• Type: Current Liability
• Use: Tax collected from customers, owed to the government.

1.3 Tax Receivable

• Type: Receivable
• Use: Tracks tax amounts due from the government.
  
  

1.4 Tax Payable

• Type: Payable
• Use: Tracks tax amounts owed to the government.

Setting Up Customer Tax

By default, customer tax uses the [Tax Received] account on the 100% tax line.

When creating a tax:

• Set the computation method and amount
• Assign the correct account to the 100% tax line

Note: In the United States, the standard tax report does not require tax grids, unlike the Canadian setup.

Setting Up Vendor Tax

By default, vendor tax uses the [Tax Paid] account on the 100% tax line.

When creating a tax:

• Set the computation method and amount
• Assign the [Tax Paid] account to the 100% tax line
  

Setup tax group

Open the tax -> Advanced options 

Rename Tax Group (Optional)

You may rename the tax group to a generic name without a percentage, so it can be applied globally across different tax rates.

Important:

Ensure the tax group has both:

• [Tax Payable] account (for tax owed to the government)
• [Tax Receivable] account (for recoverable tax from the government)
  

Journal entries and reporting

1. Create invoice with tax
   
2. October 2025 Tax Closing

When closing October 2025, Odoo calculates total tax for the period as $30.

A journal entry is generated:

Credit: [Tax Received] – from 15% sales tax collected

Debit: [Tax Payable] – from the tax group
Why this matters:
The credit to [Tax Received] offsets the total debit posted to that account on customer invoices during the month (from the 15% tax collected).