VAT requirements

Please write requirements of Your country here . Please check which are fulfilled and how it is done

Common EU requirements

1. Tax Code of Seller and buyer on Invoice

Implemented see OFBIZ-362

To validate a VAT European Number. More at. Note that there is also a SOAP service available for validation (could be used in validatePartyTaxIdInline)

2. Prices with VAT in webshop

Implemented but some issues OFBIZ-1086. In France this is required : you must show your prices VAT included if you are selling to public (B2C). When you sell to professionals (B2B), by usage, you show that your prices are VAT excluded.

3. Configuration of VAT GL Account

Is it done ?
No, there are only US and CANADA Sales Tax accounts for now.

Should it be per rate - different accounts for collected and duty tax for each rate ?
Per rate is not an obligation. A problem here is that it should be dynamic since rates can be created dynamically.

Separating collected and due taxes is mandatory and done in OFBiz though no VAT specific accounts exist.
See point 7. We need at least an incoming tax (sales) GLAccount and an outgoing tax (purchase) GLAccount.

4. Discounts applied per line

Currently OFbiz applies global discount on invoice level. This is not always valid for VAT depending on countries.
For instance it's OK for UK, and maybe Germany, but not in France and Italy where they should be grouped by VAT rates.

5. Reporting

In most countries there is need for monthly or in general periodic VAT reports with all sales and purchases.
The report must be splitted by rates since, most of the time, totals by rate are needed for the final (official) report.
Exemption and zero rate can be dealed as ordinary rates (see section 11). This report should allow to fill the official report in all cases.
In EU (at least in France) if you have a VAT registration number even if you don't pay VAT for purchases outside of your country (but in EU) you must declare the VAT part in your periodic VAT report. As a minus (debit) and a plus (credit) : it's a neutral operation, just intended for your administration (to cross-check outside VAT, this in order to prevent VAT carrousel effect). If you don't declare these amounts you may be fined (it's 5% in France). So there is a need to know this information. For an automated reporting it's not easy to deal with though...

6. Dates

There is not always direct connection between invoice date and VAT. E.g in Poland if purchase invoice is received more than 2 months from purchase it will not decrease amount of VAT to be paid. Same in France, must be the same month, but you may regularise in a delay of 2 years.

Some invoices can be not valid.

For Export invoice there can be requirement for document which will confirm that goods has been exported (to apply 0% VAT)

7. Purchase order VAT

I will implement this shortly the following way: (have a customer who wants it)

1. Add a second glAccountId for outgoing tax to the TaxAuthorityGlAccount.
2. Adjust the programs to calculate the vat (sales tax) on purchase orders the same way as sales orders, but use for the productstoreId a blank entry.

JLR note 2008/11/18 : not sure who wrote that, nothing in Jira yet.

8. Shipment cost VAT

Shipment cost should be VAT aware (amounts should be splitted for netto + VAT on invoices). There is a field for that in Tax Autorithies/Product Rate : TaxAuthorityRateProduct.taxShipping. But shipping amounts are no VAT splitted.

9. Rounding

10. Invoices requirements

We should research the common ground for invoices and POS receipts

UK requirements (from this interesting thread. We should check if OFBiz is OK, I guess so but maybe some quirks)
VAT invoices must show:

• an identifying number;
• your name, address and VAT registration number;
• the time of supply (tax point);
• date of issue (if different to the time of supply);
• your customer's name (or trading name) and address;
• the type of supply (see 16.3.2 below); and
• a description which identifies the goods or services supplied.

For each description, you must show:

• the quantity of goods or extent of the services;
• the charge made, excluding VAT;
• the rate of VAT;

• the total charge made, excluding VAT;
• the rate of any cash discount offered;
• each rate of VAT charged and the amount of VAT charged at each rate and shown in sterling; and
• the total amount of VAT charged, shown in sterling.
  It seems that for most UE coutries (at least UK, France and Italy) it's not mandatory to calculate VAT for each item but for each existing rate in the invoice.

France requirements (from Wikipedia in french)

• An unique bill number based on a chronological and continuous sequence,
• the complete names of salesman and customer with respective addresses,
• the individual number of identification to the VAT of the salesman and customer (the number of VAT of the customer remains optional for operations realised in France),
• the date back to delivery or bill transmission.

On each invoice line you must show

• The realisation date of the sale/service or deposit payment,
• for each of the delivered goods or services: quantity, name, VAT excluded unitary price, VAT rate or, if needed, exemption,
• all reductions, handing-over, rebates or discount obtained and calculable at the time of the operation and directly linked to this operation.

Finally, must be shown

• The tax amount to pay and, by rate, VAT excluded total and corresponding tax (If the liable is brought to bill another VAT that the French VAT, she/he must specify very clearly that it is a tax of such or such foreign country).
• If need be, a mention indicating that the operation benefits from a measure of exemption (with law reference), or of an auto-liquidation or profitable margin system.
• The date at which the payment must take place,
• the rate of the payable penalties begining the day following the date at which the payment must take place,
• discount conditions.

11. Exemption tracking

Exemption and zero rate adjustments are not tracked at the accounting level (Invoice and InvoiceItem entities). This makes sense as no payments can be applied against them. Anyway it's not an issue as we can trace back to order adjustments (OrderAdjustment entity) from invoices through the OrderBilling entity.

Requirements by region

• VAT link many other languages links from this link
• Eu VAT specificities change language if you need

Common South America requirements

1. VAT withholding

In Colombia applies Withholding of VAT. It is called "retention at the source". Part of calculated VAT adjustments are not paid(but retained) by the buyer.

1.1. Different % of retention

Companies in Colombia are divided in classifications according to the social activity of the company.
The value of the retention at source depends on the relationship between companies(payee and payer).

1.2. Order and Invoice amounts

The order and invoice total amounts should include the full amount of the tax, not only the part that issuer will pay to the tax authority. The invoice also should contain information about the amount of the retained tax amounts.

1.3. GL posting

Withholding amounts should be posted to separate GL account.INTERNATIONAL VAT/GST GUIDELINES