Taxes not included in the product cost after creating a vendor bill

Question

I'm trying to record purchases that are made within taxes and reflects over product costs.
I create the purchase order including the product and the tax correctly. I receive the goods, validate the entry, and correctly record the bill for the vendor. However, when I go to the inventory to check the product cost, it's not reflected by the tax amount.
If I check the inventory before create the vendor bill, the cost is correct. But when the bill with the tax details are created, the cost of the pro

Muzammil Yasin · Accepted Answer

The reason the tax amount is *not included in the product cost* is because, from an accounting perspective, *taxes like VAT or sales tax are typically considered recoverable*. Since you will charge the same tax to your customers on sales, it's not treated as part of the actual cost of the product. it's a *liability*, not an expense.

However if you still want to account these taxes for costing you can manage it through Landing Cost

Christoph Farnleitner · Answer

As said in the comment, taxes aren't part of the cost by default. You could however work your way around using /Landed Cost/. While I wouldn't consider adding VAT a common use case for this feature, it is still doable.
See  https://www.odoo.com/documentation/18.0/applications/inventory_and_mrp/inventory/product_management/inventory_valuation/landed_costs.html [1]
You may as well refer to the slides on Inventory/Landed Cost -  https://www.odoo.com/slides/slide/662 [2]

As a summary, you can enabl

britanneywiley · Answer

This behavior occurs because Odoo excludes purchase taxes from product costing unless the tax is configured as /“Included in Price.”/ Under AVCO with automatic valuation, the system records the untaxed amount as the product’s cost, while the tax portion is posted separately to an expense or tax account.
To ensure the full tax-inclusive amount is reflected in inventory valuation, you can either enable the /“Included in Price”/ option on the tax configuration or adjust the tax account mapping so t

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