Tax return (VAT declaration)¶

Companies with a registered VAT number must submit a tax return on a monthly or quarterly basis, depending on their turnover and the registration regulation. A tax return - or VAT return - gives the tax authorities information about the taxable transactions made by the company. The output tax is charged on the number of goods and services sold by a business, while the input tax is the tax added to the price when goods or services are purchased. Based on these values, the company can calculate the tax amount they have to pay or be refunded.

Note

You can find additional information about VAT and its mechanism on this page from the European Commission: “What is VAT?”.

Prerequisites¶

Tax Grids¶

Odoo generates tax reports based on the Tax Grids settings that are configured on your taxes. Therefore, it is crucial to make sure that all recorded transactions use the right taxes. You can see the Tax Grids by opening the Journal Items tab of any invoice and bill.

screenshot: accounting-tax-returns-grids

menu: Accounting ‣ Customers ‣ Invoices ‣ (an invoice) ‣ Journal Items
shows: The Journal Items tab of a posted invoice with the "Tax Grids" column showing the grids the tax lines feed.
highlight: The "Tax Grids" column (red frame).
data: An invoice with a 27% VAT line feeding two grids.
module: account
notes: English UI, light theme, crop to the tab.

To configure your tax grids, go to Accounting ‣ Configuration ‣ Taxes, and open the tax you want to modify. There, you can edit your tax settings, along with the tax grids that are used to record invoices or refunds.

Note

Taxes and reports are usually already pre-configured in Odoo: a fiscal localization package is installed according to the country you select at the creation of your database.

Close a tax period¶

Tax lock date¶

Any new transaction whose accounting date is prior to the Tax Return Lock Date has its tax values moved to the next open tax period. This is useful to make sure that no change can be made to a report once its period is closed.

Therefore, we recommend locking your tax date before working on your closing entry. This way, other users cannot modify or add transactions that would have an impact on it, which can help you avoid some tax declaration errors.

To check the current tax lock date, or to edit it, go to Accounting ‣ Accounting ‣ Lock Dates and set Tax Return Lock Date under Management Closing.

Tax return¶

Once all the transactions involving taxes have been posted for the period you want to report, open the Tax Report by going to Accounting ‣ Reporting ‣ Dynamic Reports ‣ Tax Report, and set the Date Range to the period you want to declare. The report shows the NET and TAX amounts per tax, grouped by Sales/Purchases, and includes all the values to report to the tax authorities, along with the amount to be paid or refunded.

Export it with the PDF or XLSX button to keep the document that supports the declaration. A printable version is also available under Accounting ‣ Reporting ‣ Audit Reports ‣ Tax Report.

Closing entry¶

The entry that moves the VAT balances to the tax payable or receivable account is recorded manually: create a journal entry in your miscellaneous journal (Accounting ‣ Accounting ‣ Journal Entries ‣ New) that offsets the balances of the VAT accounts shown by the tax report, and post it at the last date of the period.

Tip

Set the tax lock date before posting the closing entry, and check the VAT account balances on the Trial Balance afterwards: they should be zero for the closed period.