Core - Internal Structure - Country and tax system support

Different country and indeed, different states within some countries, have have very different transaction tax systems.

Value Added Tax

In Ireland the system for VAT (Value Added Tax) is quite simple:
There are a number of tax rates for different products or services.
Each product or service has one rate for sales and purchases.
In each transaction the VAT is calculated on the Nett transaction value.
A VAT registered business will pay VAT on purchases, charge VAT on sales and pay the difference on a monthly basis to Revenue.
Good bought from or sold to VAT registered business in other European countries have a 0% rate.

Some small business can pay tax due based on the date of receipt of payment; all others must pay based on date of transaction.
Some organisations are not VAT registered(Government, educational). These must pay VAT on purchases but cannot claim back that VAT.

Sales Tax

Sales tax is levied only on the final purchaser of a product or service. Several taxes may be levied on a single transaction, each on the Nett value of the transaction.

Excise

This is a flat value tax on a unit of product or service. Examples of this are petrol, tobacco and alcohol. VAT and Sales Tax may be charged on the Nett + Excise.

Tariff

These are taxes on international transactions. There are no tariffs on transactions within the EU.

System Requirements

This system therefore requires the following abilities:

1. A single transaction item may have zero, one or more taxes applied to it.
2. Each tax can have different rules for:
• Purchases,
• sales,
• customer and supplier types,
• local,
• inter-state and
• international transactions.
3. Each tax can be any one of the allowed types.
4. Each tax can be levied on the Nett value of the cumulative gross value.

Other Country related settings

Other country setting would include currency,decimal and triad notation, state specific reports, post-code/zip code settings, and other required company details.