[Erp5-dev] person and vat code

Bartek Gorny bartek at gorny.edu.pl
Thu Feb 5 16:23:45 CET 2009 

2009/2/5 Jean-Paul Smets <jp at nexedi.com>:
> Bartek Gorny a écrit :
>> 2009/2/5 Jean-Paul Smets <jp at nexedi.com>:
>>
>>> In the case of Poland, there is at least:
>>>    - fiscal_code (NIP) - for Person & Organisation
>>>    - social_code (PISEN) - for Person & Organisation
>>>    - vat_code (EC VAT Numbver) - for Organisation only
>>>
>>>
>>
>> No. In Poland, there are only TWO codes:
>>
>> - social_code (PESEL) - for Person
>> - "the other code" (NIP) - for Person and Organisation
>>
>> The point you are still missing is that:
>>
>> fiscal_code === vat_code
>>
>> The official definition of a NIP is something like:
>>
>> "A unique identifier provided by the tax administration for any
>> individual or organisation who is subject to any tax or social
>> security payments to Polish authorities".
>>
>> (for Polish speakers: "Numer NIP to numer identyfikujący podmioty
>> będące na terenie Polski podatnikami, płatnikami podatków oraz
>> płatnikami składek ZUS.")
>>
>> So, when I started a vat-paying business (established an Organisation,
>> if you prefer it that way), I used the same fiscal code as when I was
>> a consumer. There is no separate vat code. The EC vat number is the
>> same number prefixed by a country code.
>>
> Thanks. There are 2 numbers:
>    fiscal_code which is the NIP in Poland and applied to everyone
>    vat_code which is (in Poland) equal to a prefix + NIP (but not in
> other countries) which is ony for Organisation

That's quite correct, but - please keep in mind that while a business
has to have a NIP to operate, it doesn't necessarily need EU Vat code
- the EU code is required only if you trade with other EU countries.
Inside the country, only the NIP is used. So if you define it like
that, you will have many Organisations which would issue vat invoices
and pay vat without having the "vat_code", only with the
"fiscal_code".

By the way, how is the EU Vat constructed for French entities? And how
it works in other EU countries?

Bartek

>> Also, consider NGOs. An NGO is not a person - it is a legal entity,
>> like a corporation. It is not a vat payer. It is exempt from income
>> tax. But it has a tax identification (a NIP), exactly like a
>> corporation.
>>
> NGOs pay VAT in certain countries. They also pay income taxes too.
>
> Regards,
>
> JPS.
>> Bartek
>>
>>
>>> Regards,
>>>
>>> JPS.
>>>
>>>
>>> Bartek Gorny a écrit :
>>>
>>>> 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
>>>>>>>
>>>>>>>
>>>>>>>
>>>>>>>
>>>>>> _______________________________________________
>>>>>> Erp5-dev mailing list
>>>>>> Erp5-dev at erp5.org
>>>>>> http://mail.nexedi.com/mailman/listinfo/erp5-dev
>>>>>>
>>>>>>
>>>>>>
>>>>> --
>>>>> Jean-Paul Smets-Solanes, Nexedi CEO - Tel. +33(0)6 62 05 76 14
>>>>> ERP5 Enterprise: Free / Open Source ERP for Critical Applications
>>>>> http://www.erp5.com
>>>>> ERP5 Express: Hosted Open Source ERP for small companies
>>>>> http://www.myerp5.com
>>>>> Nexedi: Consulting and Development of Free / Open Source Software
>>>>> http://www.nexedi.com
>>>>>
>>>>> _______________________________________________
>>>>> Erp5-dev mailing list
>>>>> Erp5-dev at erp5.org
>>>>> http://mail.nexedi.com/mailman/listinfo/erp5-dev
>>>>>
>>>>>
>>>>>
>>>>
>>>>
>>>>
>>> --
>>> Jean-Paul Smets-Solanes, Nexedi CEO - Tel. +33(0)6 62 05 76 14
>>> ERP5 Enterprise: Free / Open Source ERP for Critical Applications
>>> http://www.erp5.com
>>> ERP5 Express: Hosted Open Source ERP for small companies
>>> http://www.myerp5.com
>>> Nexedi: Consulting and Development of Free / Open Source Software
>>> http://www.nexedi.com
>>>
>>> _______________________________________________
>>> Erp5-dev mailing list
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>>> http://mail.nexedi.com/mailman/listinfo/erp5-dev
>>>
>>>
>>
>>
>>
>>
>
>
> --
> Jean-Paul Smets-Solanes, Nexedi CEO - Tel. +33(0)6 62 05 76 14
> ERP5 Enterprise: Free / Open Source ERP for Critical Applications
> http://www.erp5.com
> ERP5 Express: Hosted Open Source ERP for small companies
> http://www.myerp5.com
> Nexedi: Consulting and Development of Free / Open Source Software
> http://www.nexedi.com
>
> _______________________________________________
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