Create a new taxes

Odoo’s tax engine is very flexible and support many different type of taxes: value added taxes (VAT), eco-taxes, federal/states/city taxes, retention, withholding taxes, etc. For most countries, your system is pre-configured with the right taxes.

Business case

Let’s create a service tax that computes the tax @ 21% of the service price.


Assumed that the you have already installed either Invoicing or Financial Accounting application.

Create a tax

The new tax can be created from Invoicing / Configuration / Taxes or Accounting / Configuration / Taxes, create a new tax and enter Tax Name, Tax Scope, Tax Computation.


Tax Name is a label to the tax that will be displayed on the sales or purchase order form during sales or purchase process, on the printed invoice Label on Invoices will be printed, can be set under the Advance Options tab.

Tax Scope is used to define the tax application, it can be Sales or Purchase or None. You can set None when tax is deprecated or tax is used in a group but not applicable directly.


If you want to avoid using a tax, you can not delete it because the tax is probably used in several invoices. So, in order to avoid users to continue using this tax, you should set the field Tax Scope to None.

Tax Computation is a type that can be selected according to the tax computation required

  • Fixed: eco-taxes, etc.
  • Percentage of Price: most common (e.g. 15% sales tax)
  • Percentage of Price Tax Included: used in Brazil.
  • Group of taxes: allows to have a compound tax


If you need more advanced tax mechanism, you can install the module `account_tax_python` and you will be able to define new taxes with Python code.

Advanced configuration


Label on Invoices is a short text on how you want this tax to be printed on invoice line. For example, a tax named “Service tax @ 21%” can have the following label on invoice “21%”.

Tax Group defines where this tax is summed in the invoice footer. All the tax belonging to the same tax group will be grouped on the invoice footer. Examples of tax group: VAT, Retention.

Included in Price can be selected when the tax is to be defined as included in price. i.e. Product Price is 100 and Service tax @ 21% is defined as included in price then product cost will be set as 82.64 and tax amount will be 17.35.

Tags: are used for custom reports. Usually, you can keep this field empty.


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