Accounting Module Taxes in Odoo V15
Accounting Module Taxes in Odoo V15

For a business to grow, efficient tax management is required. You can quickly configure and manage taxes with the Odoo 15 accounting module.

Odoo’s tax engine is very flexible and supports many different types of taxes: value added taxes (VAT), eco-taxes, federal taxes, retention, withholding taxes, etc. For most countries, the chart of the account you set up is automatically pre-configured with the main taxes of the country.

Calculating taxes has always been a difficult part of accounting. Any inconsistency or error in tax calculation can land a firm in trouble. Odoo 15 Accounting module offers a comprehensive support system to compute taxes and prepare tax structure. Odoo 15 also helps to create tax groups for different purposes.

For example if we are taking India then the tax system will be GST. GST itself has three different forms.

  •  IGST (Integrated Goods and Service Tax)
  •  CGST (Central Goods and Service Tax)
  •  SGST (State Goods and Service Tax)

In many countries, we use group taxes also. VAT (Value Added Tax) can be included in the group tax category.

Odoo Accounting helps the users to set default taxes. Default tax can be set for : Product, Account, Company

Once we set a default tax for the product, for the account, and for the company, the tax of the product will be considered first. The second priority will be for ‘Account’ and Company will be considered only at the end. In short, the tax on a product will be taken as the default tax.

To use the Texas, first you have to install the Accounting module from Odoo Apps. The Odoo Accounting module is installed for me, when you click on the Accounting module you can see the dashboard of it. For reference you can see the screenshot below.

To define new taxes : You have to follow some steps. Go to the Accounting Module > Configuration > Taxas. For reference you can see the screenshot below.

From the above image you can see that some of the taxes are already created. If you want to create a new tax, you can click on the Create button. When you click on the create button, you can see the form will open. For reference you can see the screenshot below.

When you create a new tax, you can set the following information : 

Tax name : Name of the tax.

Tax Type : Here, the user can select if the tax is for sale or purchase. Another option is None (e.g. deprecated tax). This option can be used if we are setting tax groups.

Tax Computation : It decides how to compute the tax. Three ways to compute.

  • Group of Taxes
  • Fixed
  • Percentage of price 
  • Percentage of price tax included

Active : This option toggles between ‘Active’ and ‘Archived’. When a tax is not in use, it should be archived rather than deleted.

Amount : Amount can be included based on tax computation.

Under the definition tab you can see the two options. For reference you can see the screenshot below.

Distribution of Invoices, Distribution of Credit Notes.

More complex choices for Taxes settings can be found in the Definition section. This area allows you to configure the taxes for invoice and credit note distribution. You can enter the Base amount or the Tax in this box to have the Tax included in the invoice. As demonstrated above, you can also add the Account from the Account field next to the Based on the field. After you’ve finished configuring the Definition section

When you click on the Advanced Tab, you can see the following details. For reference you can see the screenshot below.

Label on Invoices : A short text on how you want this tax to be printed on the invoice line. 

Tax Group : Defines where this tax is summed in the invoice footer. All the tax belonging to the same tax group will be grouped on the invoice footer. Examples of tax groups: VAT, Retention. This is a collection of child taxes.

Include in Analytic Cost : The tax is counted as a cost and, thus, generates an analytic entry if your invoice uses analytic accounts. Ticking the checkbox the tax will be added to the analytical account.

Tags : Used for custom reports. (usually, you can keep this field empty)

Include in Price : On checking this box the tax can be included in the product price

Tax due : Based on invoice and payment.

Now I am creating an ideal tax. When you save this, you can see that the ideal tax is added in the list of taxes which are already created. For reference you can see the screenshot below.

Tax on product : Individual products can be taxed using the Odoo 15 Accounting module. The functionality is fairly simple to set up. To handle the advanced feature, go to the module and click on it. To set up this functionality, navigate to the Accounting Module’s Dashboard and select the Product tab. You may easily manage product pricing by applying numerous taxes to the products.

The user can apply taxation to a product. Once this is enabled, that tax will be automatically shown when we make a sale order or a purchase order. As mentioned earlier, the product tax will get first priority while preparing for sales and purchase of products. 

Here you can see there are two types of taxes on products. Customer Tax and a Vendor Tax.

> Customer Tax : The customer has to pay this tax during a sale process.

> Vendor Tax : This is the tax to be paid during the purchase of a product from a company.

Customer Tax : When you click on the products, you can see the list of products which are already created. You can use this page to build, administer, and have complex setups for your items. To configure the tax on an existing product, click on the product you want to configure, or click the CREATE button if the product is new. You can see the customer tax and vendor tax here. For reference you can see the screenshot below.

You can create a new product also with the help of the create button. You can see the Create button from the above image. You can click on the Create button and the form will open.

Now you can see from the above screenshot customer tax is 15%, the tax we give here will come as default while selling this product to a customer.

Vendor Tax : You can add vendor tax during the product creation. When you click on Purchase then you can see the vendor taxes, for reference you can see the screenshot below.

Benefits of using Odoo for Tax Management : You may fully utilize the Odoo system’s superior automated nature in running a firm. Odoo offers the capacity to automate the majority of the processes. Odoo can calculate your current year’s earnings in real time for you. This is determined by automatically reporting profit and loss to your Balance sheet report, and you won’t need to create a year-end journal or rollover if you choose this method.

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