ERPNext Regional (Portugal)

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1

Hello,

I’m new to ERPNext, we’ve been looking at different options for a while to move away from our current software and we are impressed with the extensibility and possibilities of ERPNext.

PLEASE - bear with me because new to this and some of the logic on what’s coming next may be wrong, appreciate any corrections. I’m also not translating some words as I believe they’re easy to understand by similarity to English and context.

So to start we’re looking to create an app to integrate Portuguese tax.

We’re trying to understand how regional works and plays a role here.

I’m also trying to understand how to properly structure the tax options and templates. This is, Portugal has 3 fiscal regions and each has 3 predefined tax levels:

+------------+------------+------------+------------+
| Região     | Tx Normal. | Intermédia |  Reduzida  |
+------------+------------+------------+------------+
| Continente |        23% |        13% |         6% |
+------------+------------+------------+------------+
| Madeira    |        22% |        12% |         5% |
+------------+------------+------------+------------+
| Açores     |        16% |         9% |         4% |
+------------+------------+------------+------------+

And an exempt 0% which is global.

What will determine the tax is 1. location and 2. item, being:
If the company is located in Continente (mainland) the IVA Normal will be 23% (for almost everything) 13% for intermediate items (can’t remember one now) and 6% for reduced (like first necessity goods, potatoes for instance)

Now I’m wondering if this definition could be automatic.
One thing I noticed is when you create the company you don’t put an address?

Found this a little off for example we’re a services company, we have a registered HQ address and this should be “known” all throughout the app - including the print on invoices.

So I was thinking when one selects “Portugal” on the Country, other fields of address to be displayed.
One box with “Region” (or State the purpose is similar) and if selection is madeira, tax scheme for madeira, açores, tax scheme for Azores, at the other the “normal tax”

Now I’m seeing here how Sales Taxes and Charges Template goes with Item Tax Template and Tax Categories, but from my understanding:

Sales Taxes and Charges Template:

  • IVA Normal
  • M01 Exemption Rule by tax law
  • M02 Exemption Rule by tax law
  • …
  • M09 VAT reverse charge (VIES customers)
  • …
  • M40 extra-EU exports

Item Tax Template:

  • Normal
  • Intermédio
  • Reduzido
  • Isento (exempt)

Tax Category:

  • Regular
  • VIES
  • International

The logic regarding the tax categories would be, based on the country on the company address, a check runs:
Country is Portugal, Europe, or rest of the world?

  1. if Portugal - Tax Category Regular (but a check should run to see if the VAT number is valid, but this wouldn’t be future work)
  2. if EU it checks If there’s a tax ID filled, and if so it runs a VIES check:
    2.1. VIES valid - Tax Category VIES and Sales Template M09
    2.2. VIES invalid - Tax Category Regular (IVA Normal)
  3. if International, M40 sales template

For a starting point, is this well structured and looks feasible?
And I would also like to invite all Portuguese users out there if interested in participating with their ideas. Cheers

2

Hi @RM13

In order to apply tax based on your assorted criteria, TAX Rule can achieve this where you can set combination of filters for a Tax Template to be applied automatically.

The Tax category, addresses, and tax templates are under Tax Rule umbrella but not the item tax template. This means only Document Level tax handling can be achieved automatically by applying tax rules.

https://docs.frappe.io/erpnext/user/manual/en/tax-rule

Cheers