documentation/accounting/fiscality/taxes/taxes.rst

=====
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.

.. _taxes/list_activation:

Activate Sales Taxes from the List view
=======================================

As part of your :doc:`Fiscal Localization Package
<../../fiscal_localizations/overview/fiscal_localization_packages>`, 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 :menuselection:`Accounting --> Configuration --> Taxes` and use the
*Activate* toggle button to activate or deactivate a tax.

.. image:: media/taxes-list.png
   :align: center
   :alt: Activate pre-configured taxes in Odoo Accounting

.. _taxes/configuration:

Configuration
=============

To edit or create a **Tax**, go to :menuselection:`Accounting --> Configuration --> Taxes` and open
a tax or click on *Create*.

.. image:: media/taxes-edit.png
   :align: center
   :alt: Edition of a tax in Odoo Accounting

.. _taxes/labels:

.. important::
   Taxes have three different labels, each one having a specific use. Refer to the following table to
   see where they are displayed.

   +------------------+-------------------------+-------------------------+
   | :ref:`Tax Name   | :ref:`Label on Invoice  | :ref:`Tax Group         |
   | <taxes/name>`    | <taxes/label-invoices>` | <taxes/tax-group>`      |
   +==================+=========================+=========================+
   | Back end         | *Taxes* column on       | Above the *Total* line  |
   |                  | exported invoices       | on exported invoices    |
   +------------------+-------------------------+-------------------------+

Basic Options
-------------

.. _taxes/name:

Tax Name
~~~~~~~~

The **Tax Name** as you want to display it for backend users. This is the :ref:`label
<taxes/labels>` you see while editing Sales Orders, Invoices, Products, etc.

.. _taxes/computation:

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.

  .. important::
     Make sure that the tax sequence is correct, as the order in which they are may impact the
     taxes' amounts computation, especially if one of the taxes :ref:`affects the base of the
     subsequent ones <taxes/base-subsequent>`.

- **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   | Price       | Tax      | Total    |
  | Sales Price | without tax |          |          |
  +=============+=============+==========+==========+
  | 1,000       | 1,000       | 10       | 1,010.00 |
  +-------------+-------------+----------+----------+

- **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   | Price       | Tax      | Total    |
  | Sales Price | without tax |          |          |
  +=============+=============+==========+==========+
  | 1,000       | 1,000       | 100      | 1,100.00 |
  +-------------+-------------+----------+----------+

- **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   | Price       | Tax      | Total    |
  | Sales Price | without tax |          |          |
  +=============+=============+==========+==========+
  | 1,000       | 1,000       | 111.11   | 1,111.11 |
  +-------------+-------------+----------+----------+

.. _taxes/active:

Active
~~~~~~

Only **Active** taxes can be added to new documents.

.. important::
   It is not possible to delete taxes that have already been used. Instead, you can deactivate them
   to prevent future use.

.. note::
   This field can be modified from the *List View*. See :ref:`above <taxes/list_activation>` for
   more information.

.. _taxes/scope:

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**

.. tip::
   You can use **None** for taxes that you want to include in a :ref:`Group of Taxes
   <taxes/computation>` but that you don't want to list along with other Sales or Purchase taxes.

.. _taxes/definition-tab:

Definition tab
--------------

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

.. image:: media/taxes-definition.png
   :align: center
   :alt: 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 :doc:`Tax Reports <../../reporting/declarations/tax_returns>`
  automatically, according to your country's regulations.

.. _taxes/advanced-tab:

Advanced Options tab
--------------------

.. _taxes/label-invoices:

Label on Invoices
~~~~~~~~~~~~~~~~~

The label of the tax, as displayed on each invoice line in the **Taxes** column. This is the
:ref:`label <taxes/labels>` visible to *front end* users, on exported invoices, on their Customer
Portals, etc.

.. image:: media/taxes-invoice-label.png
   :align: center
   :alt: The Label on Invoices is displayed on each invoice line

.. _taxes/tax-group:

Tax Group
~~~~~~~~~

Select to which **Tax Group** the tax belongs. The Tax Group name is the :ref:`label
<taxes/labels>` 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 :doc:`Fiscal Positions <fiscal_positions>`.

.. image:: media/taxes-invoice-tax-group.png
   :align: center
   :alt: 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 :ref:`Label on the Invoice <taxes/label-invoices>` indicates *0% EU*, and the Tax Group name,
above the *Total* line, indicates *0%*.

.. _taxes/analytic-cost:

Include in Analytic Cost
~~~~~~~~~~~~~~~~~~~~~~~~

With this option activated, the tax's amount is assigned to the same **Analytic Account** as the
invoice line.

.. _taxes/included-in-price:

Included in Price
~~~~~~~~~~~~~~~~~

With this option activated, the total (including the tax) equals the **Sales Price**.

:dfn:`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   | Price       | Tax      | Total    |
| Sales Price | without tax |          |          |
+=============+=============+==========+==========+
| 1,000       | 900.10      | 90.9     | 1,000.00 |
+-------------+-------------+----------+----------+

.. note::
   If you need to define prices accurately, both tax-included and tax-excluded, please refer to the
   following documentation: :doc:`B2B_B2C`.

.. note::
   - **Invoices**: By default, the Line Subtotals displayed on your invoices are *Tax-Excluded*. To
     display *Tax-Included* Line Subtotals, go to :menuselection:`Accounting --> Configuration -->
     Settings --> Customer Invoices`, and select *Tax-Included* in the **Line Subtotals Tax
     Display** field, then click on *Save*.
   - **eCommerce**: By default, the prices displayed on your eCommerce website are *Tax-Excluded*.
     To display *Tax-Included* prices, go to :menuselection:`Website --> Configuration --> Settings
     --> Pricing`, and select *Tax-Included* in the **Product Prices** field, then click on *Save*.

.. _taxes/base-subsequent:

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 :ref:`Group of Taxes <taxes/computation>` to include this tax, or add it
directly to a product line.

.. image:: media/taxes-subsequent-line.png
   :align: center
   :alt: The eco-tax is taken into the basis of the 21% VAT tax

.. warning::
   The order in which you add the taxes on a product line has no effect on how amounts are computed.
   If you add taxes directly on a product line, only the tax sequence determines the order in which
   they are applied.

   To reorder the sequence, go to :menuselection:`Accounting --> Configuration --> Taxes`, and drag
   and drop the lines with the handles next to the tax names.

   .. image:: media/taxes-list-sequence.png
      :align: center
      :alt: The taxes' sequence in Odoo determines which tax is applied first

.. seealso::

  - :doc:`fiscal_positions`
  - :doc:`B2B_B2C`
  - :doc:`taxcloud`
  - :doc:`../../reporting/declarations/tax_returns`