How to handle product tax which varies between suppliers.
G'day all,
We have come across a situation where a product sourced from one supplier has tax, in this case GST, and is tax-free from another supplier. At present the tax is set only at the practice level. As I understand it, setting a product tax will override the product type or practice tax. However can a 'zero' tax be created to apply to some products, or will this upset any calculations?
Even in this case, will the product tax apply to all suppliers listed for that product? If so, how can different supplier tax rates be handled for the one product?
I know of a couple of pending projects relating to taxes. Is this situation covered by those?
Regards, Simon
Re: How to handle product tax which varies between suppliers.
Humm - problem. OpenVPMS allows you to set taxes for the practice and also via product type. However there is no concept of having a separate tax regime for suppliers.
Note that if we have the tax set at 10%, and the supplier prices set as say $100 - then because this is an ex-tax price, that shown on the supplier order will be $110.
However, as it states in http://www.openvpms.org/documentation/csh/1.7/product/tabs#supplier
"List Price - this is your 'tax excluded' price for the item from the supplier - it is not displayed on the order. Note that both this and the Nett price are the prices for the item being ordered - in the above example the pack of 24 cans (and not the individual can price).
Nett Price - this is the 'tax excluded' price from the supplier, and will be displayed on the order. Note that the Nett Price is the price that the practice pays for the product. It will either be the same as the List Price, or will be lower because the practice receives a discount from the supplier.
Auto Price Update - check this box if the cost price for the product is to be automatically updated when an order is received. The system will update the cost price (using the List Price divided by the Package Size), and use this and the margin to set a new unit price."
Hence the Nett Price + tax is shown on the order, but the List price is used to update the Cost price if required.
This means that we can, for the zero tax supplier items, set the Nett Price to P/(1+T/100) where P is the price (tax free) from the supplier and T is the tax rate.
Note that on the sell side - ie when the practice sell something, it will in all cases need to have GST added (since if is highly unlikely that (in Australia) the practice sells items which are GST free - since here only basic foodstuffs are GST free). So even if you bought it GST from the supplier, you need to add GST to get your sell price.
Note also that on the supplier side, since we do not pay GST on stuff bought directly from overseas, there is a case for being able to set the tax status of suppliers. I suspect that here a simple 'do not add tax when ordering' flag would be sufficient for Australian usage, but I have no idea about the situation in other countries.
Simon - for your immediate problem, I would be tempted to go the route of setting the Nett Price for the GST-free supplier using the above formula.
Regards, Tim G