Help with Setting Up Taxes

ERPNext Accounting
1

Hi,

refering to this page https://erpnext.org/docs/user/manual/en/accounts/item-wise-taxation

It does not work as explained in step2. Would you please help me find what I’m doing wrong?

I have 2 taxes:
TAX20 is my country default tax. Some product may have a “reduced” tax, TAX5.

let’s configure 2 items:

ITEM1: no taxes (means TAX20 should be applied)

ITEM2: reduced tax, one row:  TAX5 rate 5%

Now for the taxes template:

1. on net total / TAX20 rate 20%
2. on net total / TAX5 rate 0%

_
TAX20 rate 20% to make it applied to all items, unless specific Tax Rate is defined in the Item master
TAX5 rate 0, because the rate should be taken from items with this tax_

My sale order tax breakup will look like this:

ITEM1 $10    TAX20 (20%) $2   
ITEM2 $20    TAX20 (20%) $4    +    TAX5 (5%) $1

ITEM2 taxes are wrong. it should have only TAX5 applied.

2

Hi, which version do you use?
and have you checked that your Item Tax and Sales Tax have the same tax Account?

3

version v10.1.6
just checked, yes same tax account.

4

hmmm, it’s very strange I have ERPNext: v10.0.17 and in my case it uses only Item taxes.

5

just upgraded to Release v10.1.13, same problem.

6

I just recently had the same issues with incorrect tax calculation and was able to correct it by following the same Item Wise Taxation documentation. Here is what I did:

  1. Go to the Item List and find the product you want to have a special tax rate. Go to the ITEM TAX section and add your TAX20 code there. The rates in the Item Tax will override the rates in the quote or sales order (for On Net Total). Set the rate to something lower than 20%. You can also add additional tax codes in here if you want more than one calculation performed for this item when it is sold.
  2. Then go to your quote or sales order. Remove the item & then add the item back. THIS STEP forces the quote to recalculate the rates.

I found that simply changing the rates does not automatically fix it. You need to go to the quote and remove and re-add in order to recalculate the tax. Good luck.

7

what I did is setting ITEM2 master with two taxes:

ITEM2: TAX20 rate 0% AND TAX5 rate 5%

it is a bit hacky, and not explained like this in the documentation. It also means I must add all taxes that do not apply in item master with a rate of 0.

:frowning: