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From "Paul Foxworthy (JIRA)" <j...@apache.org>
Subject [jira] [Commented] (OFBIZ-9492) Tax Authorities need two GL accounts for sales and purchases
Date Sun, 30 Jul 2017 12:37:00 GMT

    [ https://issues.apache.org/jira/browse/OFBIZ-9492?page=com.atlassian.jira.plugin.system.issuetabpanels:comment-tabpanel&focusedCommentId=16106479#comment-16106479
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Paul Foxworthy commented on OFBIZ-9492:
---------------------------------------

Hi [~deepak.nigam], [~jacopoc], [~pfm.smits]

Jacopo did some cleaning up of the accounting transaction types in 2007 (https://github.com/apache/ofbiz/commit/4d8ab57b0173a98e82c23268708c0c9f4247c3a7)

I see in /applications/accounting/data/AccountingTypeData.xml that AcctgTransType values of
SALES_INVOICE, PURCHASE_INVOICE and CUST_RTN_INVOICE have a comment saying they should be
replaced with "SALES". I presume the thinking is that exactly the same set of information
is a purchase invoice from the perspective of the buyer, and a sales invoice from the perspective
of the seller. If the two parties are both using OFBiz, it could even be exactly the same
entity.

I was considering using these three values in the revision of the TaxAuthorityGlAccount entity.
Now I wonder the relationship should be to InvoiceType instead. There are other situations
where we may incur and pay a tax obligation beyond when we raise and receive invoices, such
as income tax. However, in those situations you would just directly set the GL accounts for
 a payment. Does anyone see a problem with using InvoiceType?

Cheers

Paul





> Tax Authorities need two GL accounts for sales and purchases
> ------------------------------------------------------------
>
>                 Key: OFBIZ-9492
>                 URL: https://issues.apache.org/jira/browse/OFBIZ-9492
>             Project: OFBiz
>          Issue Type: Improvement
>          Components: accounting
>    Affects Versions: Trunk
>            Reporter: Paul Foxworthy
>            Assignee: Paul Foxworthy
>              Labels: accounting, vat
>
> In jurisdictions with Value Added Tax, you need to track tax you have paid on purchases,
and tax you have collected with sales. When you report to a tax authority, you pay them the
difference between the two, i.e. you pay tax on the value added, not on your inputs.
> OFBiz has an entity, TaxAuthorityGlAccount (TAGLA), which currently assumes the GL account
is for a sale.
> We need to extend OFBiz so it is possible to find two GL accounts for a tax authority,
one for sales and one for purchases.
> I propose:
> - Define a new Enumeration for the direction of a transaction. I suggest
> calling the Enumeration TAGLADIR, with two values TAGLADIR_INCOMING
> and TAGLADIR_OUTGOING.
> We could reuse an existing indication of the direction of a transaction,
> for example the GlAccountClassIds INCOME and EXPENSE. However, when we receive
> income from a sale, we would incur a tax *liability*, and the GL account for that
> would be a liability account. So I think it would be less confusing to have a
> separate enum here that's just for TAGLA.
> - add a new attribute to the TaxAuthorityGlAccount entity for the direction of the transaction.
> The new attribute should be included in the primary key.
> - Add a new service in TaxAuthorityServices named getTaxAuthorityGlAccountId which
> looks up a TAGLA given primary key values, including the direction
> - There are two places in TaxAuthorityServices that would call getTaxAuthorityGlAccountId:
getTaxAdjustments and getItemTaxAdjustments, one for orders, and the other for invoice item
types. The direction can be inferred from the order type or the invoice item type
> - createAcctgTransForPurchaseInvoice and createAcctgTransForCustomerReturnInvoice
> should use getTaxAuthorityGlAccountId
> - createAcctgTransactionForSalesInvoice should be rewritten to use getTaxAuthorityGlAccountId.
> I am working on a patch to do this, but I'd like your thoughts on my proposal



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