[Erp5-dev] person and vat code

Bartek Gorny bartek at gorny.edu.pl
Thu Feb 5 23:47:29 CET 2009 

Let's try to put it all together - first a list of properties, then
questions, then what is missing currently in ERP5, then issues to
discuss:

Properties
------------
The following numbers/codes are essential from legal and fiscal point of view:

personal ID
description: a unique number given to every person
refers to: Person
multiplicity: 1 *
name in ERP5: social_code
name in Poland: PESEL

* in fact a person who has multiple citizenship can have the ID in
more then one country, but we probably don't have to bother

registration code
description: provided by the business registry for the company
refers to: Organisation
multiplicity: 1
name in ERP5: corporate_registration_code
name in Poland: KRS

activity code
description: provided by statistics institute to produce national statistics
refers to: Organisation
multiplicity: 1
name in ERP5: activity_code
name in Poland: REGON

fiscal code
description: a unique number given to every tax payer; given to every
adult citizen and to every legal entity; used for filing tax forms,
vat settlements, printed on invoices within the country
refers to: Person and Organisation
multiplicity: 1 *
name in ERP5: (missing)
name in Poland: NIP

* except corner cases like expatriates, which we probably can skip

european vat code
description: a unique number given to every business entity trading
with other EU countries; printed on invoices issued for foreign
clients
refers to: Person
multiplicity: many - potentially one per EU country *
name in ERP5: vat_code
name in Poland: "Europejski numer VAT" or "NIP europejski"

* normally an organisation registers for EU vat code in its country of
residence; however, there are cases whereby an organisation pays VAT
also in other EU countries to which it exports

Questions:
-----------
- what is geographic_incorporate_code?
- what is social_code of an Organisation?

What is missing
-------------------

- fiscal code for both Person and Organisation
- multiple vat_codes

Discussion
-----------------

1) Some countries have something like "social security number", I
don't know if it is an equivalent of "personal ID" or "fiscal code". I
hope someone from another country joins the discussion...

2) I think social code and fiscal code should be catalogged - this is
because (a) these codes are very important and are often used to find
and identify a person or an organisation, and (b) because they are
assured to be unique country-wide, so a serious application should be
able to check if there are no duplicates.

3) If we follow the principle that a business activity of a Person is
represented by a respective Organisation, what relation should link
the two? I presume there should be a relation, and some properties
(like fiscal code or default address) will be acquired along the
relation.

4) Maybe we could develop something like "country-based property",
where one could input one value per every country defined in the
region tree - that would cover all corner cases of expats with
mutliple ids and fiscal codes, companies with multiple vat codes etc?

Bartek


2009/2/5 Jean-Paul Smets <jp at nexedi.com>:
> Bartek Gorny a écrit :
>> 2009/2/5 Jean-Paul Smets <jp at nexedi.com>:
>>
>>>
>>>>
>>> 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?
>>
>>
> It works differently in every country. In general (anywhere in the
> world), there is
>    - registration code provided by the business registry for the company
>    - a fiscal code, or revenue tax code, which is like NIP in Poland
>
> In most countries, there is
>    - registration code provided by the business registry for each
> office of the company
>
> In some countries, those which have VAT, there is
>    - a vat_code which can be somehow be the same or different from the
> fiscal code
>
> In some countries, those which have a statistics institute, there is:
>     - an activity code to produce nation statistics
>
> In France, the vat_code is similar to the registration code, not to the
> fiscal code. I am sure in other countries, it could be fully unrelated.
>
> Regards,
>
> JPS.
>
>
>> 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
>>>>> 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
> Erp5-dev at erp5.org
> http://mail.nexedi.com/mailman/listinfo/erp5-dev
>



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