OpenVPMS provides support for item level tax systems where each invoice item is individually taxed, ie the GST used in Australia, the VAT system used in the UK, and the State taxes used in the USA. 

Also it can be configured (via Administration|Organisation|Practice ) to display amounts as either 'tax-included' or a 'without tax' or 'ex-tax' basis. The standard invoice etc document templates are sensitive to the current locale (ie country) and inc/ex tax setting and are formatted appropriately. Hence in Australia with inc-tax we have:

and in the US with ex-tax we have:

Where relevant, the standard reports provided with the system have options to show either inc-tax or ex-tax amounts.

Tax Settings
Taxes can be set at the product, product type, and practice levels.  One can also define multiple taxes.

In a simple 'same for everything' situation, it is only necessary to set the tax for the practice.

If different types of products are taxed differently, then the taxes can be set at the type level. Note also that the tax percentage can be set to zero. Thus in a situation where everything is taxed at 10% but one type of product is not taxed, then the simplest way to handle this is to set a 10% tax for the practice, and a 0% tax for the tax free product type. Similarly, if one type of product attracts an extra tax, the standard tax can be set for the practice, and the 'extra tax' product type set as having both the standard and the extra tax.

If there are only a few products with different tax rates, then it may be easier to set the taxes for the individual products.

Customers with special tax status can be accomodated since it is possible to set excluded taxes for any customer.

The system does not support location dependent taxes.  That is, it is not possible to have different practice locations with different taxes.

Product Pricing
Product prices can be entered as either inc- or ex-tax amounts. They are displayed on the product screens as either inc- or ex-tax depending on the setting for the Practice.

For each product, a cost price and a markup can be entered, and the system will calculate the tax-included price as follows:

      price = (cost * (1 + markup/100) ) * (1 + tax/100)

The tax rate to use is selected as follows:

  • if taxes are set for the product, use these
  • if the product has a product type, and if that type has taxes set, use these
  • else use the taxes set for the practice

Alternatively, if desired, the tax included price can be entered directly without any cost or markup.

Customer Transactions
When a product is entered on an invoice (or credit-note etc) the system first uses the logic above to decide the applicable taxes.  It then checks if the customer has any tax exclusions, and if so removes these.

The amounts displayed on the invoice (or credit-note etc) screen are always inc-tax irrespective of the Practice inc-/ex-tax setting.

The tax included amount and the tax amount are calculated and stored for each line item. The invoice (or credit-note etc) record holds the total tax-included amount and the total tax amount.

Note that the line-item record also holds the cost and tax-inc amounts of the fixed component of the price, and the quantity and the cost and tax-inc amounts of the unit component. (See also Concepts|Pricing) Hence it possible to construct reports on the achieved sales margins by product, product type, customer, patient breed and so on.

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