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Fiscal Position In Odoo

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Author

AsrayaAug. 10, 2018

Fiscal Policy

In economics and political science, fiscal policy is the use of government revenue / fund for their economic activities. The major source of revenue for the government is from taxes. Each country may follow different tax policies.

Fiscal Position in Odoo

Fiscal Position In Odoo is a beneficial accounting feature used by Odoo. Odoo helps to position the tax according to the country’s tax policy. It provides one time setting of tax, that can be use at every time. We can set taxes either in products or products categories. So the respective taxes will be applied in sales orders and invoices.

Why fiscal position or fiscal policy?

The use of fiscal policy is to apply dynamic taxes on quotation lines or invoice lines with the customer's fiscal policy. Means, we have tax configuration in products and product categories. So if we are not using any fiscal policy and choose those products in sales order or invoice, same taxes will be applicable for every customer. Suppose we want to remove all the taxes for certain customers, let's say foreign customers with zero rated tax as export. It is possible to manage such situations using fiscal policy.

We can configure the existing tax on products and what tax to be applied instead of the existing one in fiscal position. Similarly if we want to change the tax rate for certain customers, we can achieve same way. If the fiscal position is set to a customer, tax will be applied to products automatically when creating the customer invoice or Quotation. That may be an advantage for the user. They can save time by doing so. Lets have a look in to the process.

How to use in Odoo?

To set fiscal position in Odoo activate developer mode from settings.

Then go to Settings > User >  Edit

tick the check box ‘Show full accounting features’ to enable the accounting module.

 full accounting features’ to enable the accounting module

Now you can create the fiscal position. for that, go to Invoicing > Configuration > Accounting > Fiscal Positions > Create.  

Setup a name for the fiscal position

Under tax mapping you have to add an item in to 'tax on product' and 'tax to apply'.

add an item in to 'tax on product' and 'tax to apply'

Do the same for account mapping

> Save

 add an item in to 'tax on product' and 'tax to apply' for account mapping

If we go to any products or product categories, we can see the default taxes configured.

Go to Sales > Products > select one product

Now you can see that customer taxes is  GST 5%. So this is the default tax applicable to all customers except those who have different fiscal position.

View of customer taxes is  GST 5%

Lets make a quotation with a customer having no fiscal position. To make a quotation go to

Sales > Quotations > Create

While entering items you can notice that tax is automatically added to the column. The tax applied here is default taxes configured in products.

Now set a fiscal policy to another customer in customer form. To do so, go to

Sales > customers > select one customer.

Configure the fiscal position. eg: 'Inter State' > Save.

fiscal position customer

Let’s see what happens when creating the order for this customer.

When we choose the customer, the 'fiscal position' automatically changed  in to 'Inter State' in 'Other Information' tab. Similarly the taxes in order lines also changes.

Now you can see the different tax applied for same product in both cases. So this how the fiscal position works.

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