[Erp5-dev] person and vat code

Thu Feb 5 14:32:43 CET 2009

2009/2/5 Jean-Paul Smets <jp at nexedi.com>:
> Hi,
>
> The analysis related to vat_code is incorrect. Let me explain why, since
> we had the same situation when we implemented the registry of commerce
> in a certain country and the only VAT registration system in that same
> country.
>
> A Person represents a physical person. A Person does not have, as such,
> a vat code. A Person of course has other codes in relation with
> individual taxes or social insurances. This number usually identifies
> that person in a unique manner.
>
> In some countries, people can have a private business. They often must
> be registered to a kind of business registry before they can do business.
>
> In the end, there are 2 different documents:
> a- the physical person entity -> Person in ERP5
> b- the moral person entity which represents the business -> Organisation
> in ERP5
>
> So, if someone wants to do business as himself in ERP5, he should create
> - one Person which represents himself as physical entity
> - one Person which represents his/her business

Just to clarify things - I think you meant "one Person which
represents his/her business" here, right?

>
> The idea behind that is that a business can start as an individual
> business (ie. handled by a single Person) and later evolve into a
> corporation, yet retain the same name, clients, etc. A business is
> therefore always a moral person, not an individual person. So, the
> conclusion is simple: use Organisation if you want to define businessed
> operated by individuals and Person to represent the owner of that
> individual business.

I considered this approach, but saw two major drawbacks:

- in reality, there is no another legal entity in such a case - I am
an example of it, because I do this kind of business activity, and
when I as a business entity purchase something from a supplier, then I
owe him my personal money - there is no third party involved, so the
business model in ERP5 would be different from the real life situation

- the NIP (Tax Identification Code, vat code, whatever you call it) is
common for all legal entities (companies and the likes) and people
countrywide - there may not be two legal entities or two people with
the same NIP, but also there may not be a legal entity and a person
with the same NIP; whereas, in this approach, you would by definition
have a Person and an Organisation sharing the same number

As far as the evolution is concerned - if a business activity evolves
from an individual business into a corporate entity, then it can
retain a name, but it's NIP (tax id) will change. The corporate entity
does not automatically takes over everything - it may take over
contracts, clients, credits, investments, trade debtors etc, but
doesn't have to, so it is not a 100% continuation. It all depends on
the way it is established. And it has a different legal form, so I'd
be rather cautious in deciding whether it is the same Organisation or
a new one.

Anyway, a Person does have a tax id, whether we call it vat_code or
something else, and it is legally required to file any tax or social
security form, so whatever approach we choose one property of a Person
is missing.

Bartek

>
> The only reason which could justify adding vat_code to a Person would be
> a case in which:
> - a private individual (Person) acts as a consumer (ie. not as an
> individual business)
> - purchases a product from a given supplier (Organisation)
> - and is requested a vat_code from that that supplier
>
> If you prefer: vat_code is delivered to private individuals which are
> not doing any business and are not registered as moral person in any
> form. I am not aware of any such case anywhere.
>
> About vat_code, codes, Person and Organisation. I only see the current
> issues nowadays in ERP5:
> 1- codes are multivalued in reality (they are single valued now). It is
> necessary to extend codes in a way similar to prices for resources or
> addresses for Person/Organisation ie. with subobjects and a default
> value. A given person can have multiple codes (ex. social, tax) which
> are unique for a given country.
> 2- codes currently consist of corporate_registration_code, social_code,
> vat_code, geographic_incorporate_code, activity_code. All of them are
> related to concepts which are universal worldwide. Some codes are
> missing though (ex. tax_code). I am interested in making a list of codes
> which is both universal and covers all cases.
>
> Regards,
>
> JPS.
>
>
>
>
>
>
>
> Vera Kurpas a écrit :
>> On Wed, 2009-02-04 at 17:32 +0100, Bartek Gorny wrote:
>>
>>> Hello,
>>>
>>> I just noticed that the Organisation property sheet provides a
>>> vat_code property, but the Person property sheet does not, so a person
>>> has no vat_code. The Person has only a "social_code".
>>>
>>
>>
>>> I don't know about France, but in Poland every organisation and every
>>> person has a Tax Identification Number (NIP), which in case of a
>>> person is used e.g. for filing annual tax forms, and of an
>>> organisation for vat settlements, invoicing and everything else. Also,
>>> if someone starts doing business and pays VAT, he uses his personal
>>> NIP for vat settlements. In many accounting, financial, trade and
>>> other applications NIP is used to property identify a
>>> person/organisation and to make sure it is unique system-wide.
>>>
>>
>>
>>> As far as the "social code" is concerned - I don't know what it is in
>>> France, but in Poland I'd interpret is as the PESEL number, which is a
>>> unique number assigned to every citizen - and this would be
>>> consistent, because organisations do not have PESELs.
>>>
>> The same situation is in Russia except the fact that person can have VAT
>> number even he does not carry on business for better salary tax
>> registration. VAT is mandatory required for someone who starts doing
>> business. VAT for Person differ from Company VAT by quantity of numbers.
>> The presence of the social code is obligatory for every citizen.
>>
>>> So, the question is: is it similar in other countries? If so, would it
>>> be a good idea to give a vat_code to a Person type and catalog it?
>>>
>> I think vat_code should be in Person form and be catalogued for search
>> and sorting purposes.
>>
>>
>>> If
>>> not, then maybe a localisation template should provide it?
>>>
>>> Bartek
>>>
>>>
>>
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>
>
> --
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