[Erp5-dev] person and vat code

Thu Feb 5 14:43:47 CET 2009

2009/2/5 Bartek Gorny <bartek at gorny.edu.pl>:
> 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?

Sorry, I repeated the same mistake - I mean, I think you meant "one
Organisation which
represents his/her business" here, right?

B.

>>
>> 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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>>>
>>
>>
>> --
>> Jean-Paul Smets-Solanes, Nexedi CEO - Tel. +33(0)6 62 05 76 14
>> ERP5 Enterprise: Free / Open Source ERP for Critical Applications
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>>
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>
>
>
> --
> "Software is largely a service industry operating under the persistent
> but unfounded delusion that it is a manufacturing industry."
> Eric S.Raymond, "The Magic Cauldron"
>

-- 
"Software is largely a service industry operating under the persistent
but unfounded delusion that it is a manufacturing industry."
Eric S.Raymond, "The Magic Cauldron"