How Dynamic Tax applied to a Purchase Order in Odoo

Dynamic Tax in Purchase Orders automatically applies the appropriate tax according to the product category and its configuration. This ensures precise tax calculations at both the individual product level and the overall order level.

Required Configuration

• Product Category must be set in Dynamic Tax Configuration.
• Only products under the configured category will have Dynamic Tax applied.
• The Purchase Tax must be assigned.

For Example: Configure a dynamic tax for this product category (LIFE STYLE / CROCKERY / WOODEN / WOOD ADARASAM SET) with a price range of 0 to 999. Set both the purchase and sales tax to 18%.

Create a Purchase Order

• Go to Purchase Module.
• Click +New to create a Purchase Order.
• Select the Vendor from the list.
• Click Save, then PO number is generated.

Product Selection

• Add the product using the Product Code.
• Ensure the product category is configured for Dynamic Tax.
• Dynamic Tax will be applied only to these products.

Automatic Tax Application

• System checks the product’s Basic Cost.
• If the cost is within the configured range, Dynamic Tax is applied.
• If the cost is outside the range, the product’s default tax is applied.
• Applied tax appears in the Tax field of the Purchase Order.

For Example

    • The vendor is KAMADHENU TRADING COMPANY, and the purchased product is 20102299-WOOD ADARASAM SET.
    • This product is configure under the product category (LIFE STYLE / CROCKERY / WOODEN / WOOD ADARASAM SET).
    • The product purchase tax is 12 % and Basic Cost is 70. Therefore, on the Purchase page, the tax is set as 18%.

Product-level Tax Calculation

Once Quantity is updated, system calculates:

    • Tax Inclusive (Tax Incl) = (Basic Cost + Tax%) × Qty
    • Tax Exclusive (Tax Excl) = Basic Cost × Qty

• Tax rate is taken from Purchase Tax set in Dynamic Tax Configuration of the product category.
• Verify all details are correct.
• Confirm and approve the purchase order.