FINERACT-1289: Taxes on Loan charges

[alberto-art3ch]

Description

There was an issue with the Tax attached to the loan charge is not getting affected at the loan/accounting level. Tthe tax bifurcation was not happening

FINERACT-1289

• Loan Charges

• Tax Component

• Charge Definition linked with the Tax Group

• Accrual Loan Transaction for paying the Loan Cahrge

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[Aman-Mittal]

@alberto-art3ch It seems GA check is giving error prone issue on fineract-tax:compileTestJava can you please check.

While i tried to look at the ticket. Can you confirm me the tax bifurcation logic. Asking based on usecase perspective while on ticket i tried to cross-check I cannot seem to understand how tax logic should be calculated not much relevant data i can find.

[adamsaghy]

/home/runner/work/fineract/fineract/fineract-tax/src/test/java/org/apache/fineract/portfolio/tax/service/ChargeTaxApplicationServiceTest.java:66: error: [JavaTimeDefaultTimeZone] LocalDate.now() is not allowed because it silently uses the system default time-zone. You must pass an explicit time-zone (e.g., ZoneId.of("America/Los_Angeles")) to this method.
> Task :fineract-tax:compileTestJava FAILED
        Map<TaxComponent, BigDecimal> result = service.computeTax(null, new BigDecimal("100.00"), LocalDate.now(), 6);

                                                                                                               ^
> Task :fineract-loan:compileJava
    (see https://errorprone.info/bugpattern/JavaTimeDefaultTimeZone)
  Did you mean 'Map<TaxComponent, BigDecimal> result = service.computeTax(null, new BigDecimal("100.00"), LocalDate.now(ZoneId.systemDefault()), 6);'?
/home/runner/work/fineract/fineract/fineract-tax/src/test/java/org/apache/fineract/portfolio/tax/service/ChargeTaxApplicationServiceTest.java:75: error: [JavaTimeDefaultTimeZone] LocalDate.now() is not allowed because it silently uses the system default time-zone. You must pass an explicit time-zone (e.g., ZoneId.of("America/Los_Angeles")) to this method.
        Map<TaxComponent, BigDecimal> result = service.computeTax(taxGroup, null, LocalDate.now(), 6);
                                                                                               ^
    (see https://errorprone.info/bugpattern/JavaTimeDefaultTimeZone)
  Did you mean 'Map<TaxComponent, BigDecimal> result = service.computeTax(taxGroup, null, LocalDate.now(ZoneId.systemDefault()), 6);'?
/home/runner/work/fineract/fineract/fineract-tax/src/test/java/org/apache/fineract/portfolio/tax/service/ChargeTaxApplicationServiceTest.java:84: error: [JavaTimeDefaultTimeZone] LocalDate.now() is not allowed because it silently uses the system default time-zone. You must pass an explicit time-zone (e.g., ZoneId.of("America/Los_Angeles")) to this method.
        Map<TaxComponent, BigDecimal> result = service.computeTax(taxGroup, BigDecimal.ZERO, LocalDate.now(), 6);
                                                                                                          ^
    (see https://errorprone.info/bugpattern/JavaTimeDefaultTimeZone)
  Did you mean 'Map<TaxComponent, BigDecimal> result = service.computeTax(taxGroup, BigDecimal.ZERO, LocalDate.now(ZoneId.systemDefault()), 6);'?
3 errors

[alberto-art3ch]

@alberto-art3ch It seems GA check is giving error prone issue on fineract-tax:compileTestJava can you please check.

While i tried to look at the ticket. Can you confirm me the tax bifurcation logic. Asking based on usecase perspective while on ticket i tried to cross-check I cannot seem to understand how tax logic should be calculated not much relevant data i can find.

@alberto-art3ch It seems GA check is giving error prone issue on fineract-tax:compileTestJava can you please check.

While i tried to look at the ticket. Can you confirm me the tax bifurcation logic. Asking based on usecase perspective while on ticket i tried to cross-check I cannot seem to understand how tax logic should be calculated not much relevant data i can find.

I've reviewed the compilation issue in the fineract-tax Test part and solved. Thanks.

About the bifurcation logic about the Taxes in the Loan Charges is: If you have a Loan Charge with 100.00 as amount and you have a Tax of 15% in this case, the client pays the same 100.00 but internally (in the accounting) you will have three Journal Entries:

GL ACCOUNT	DEBIT	CREDIT
Fees Receivables	100.00
Income For Fees		85.00
Tax Liability		15.00

The Tax liability account is taken from Tax Component definition, and obviously it is linked to the Charge using the Tax Group

We are trying to follow a similar approach that we have in the Savings, so we are creating entities to have the detail about which Taxes (if apply) are being paying on the repayment transactions

Please let me know any comment or doubt

[Aman-Mittal]

@alberto-art3ch It seems GA check is giving error prone issue on fineract-tax:compileTestJava can you please check.

While i tried to look at the ticket. Can you confirm me the tax bifurcation logic. Asking based on usecase perspective while on ticket i tried to cross-check I cannot seem to understand how tax logic should be calculated not much relevant data i can find.

@alberto-art3ch It seems GA check is giving error prone issue on fineract-tax:compileTestJava can you please check.

While i tried to look at the ticket. Can you confirm me the tax bifurcation logic. Asking based on usecase perspective while on ticket i tried to cross-check I cannot seem to understand how tax logic should be calculated not much relevant data i can find.

I've reviewed the compilation issue in the fineract-tax Test part and solved. Thanks.

About the bifurcation logic about the Taxes in the Loan Charges is: If you have a Loan Charge with 100.00 as amount and you have a Tax of 15% in this case, the client pays the same 100.00 but internally (in the accounting) you will have three Journal Entries:

GL ACCOUNT	DEBIT	CREDIT
Fees Receivables	100.00
Income For Fees		85.00
Tax Liability		15.00

The Tax liability account is taken from Tax Component definition, and obviously it is linked to the Charge using the Tax Group

We are trying to follow a similar approach that we have in the Savings, so we are creating entities to have the detail about which Taxes (if apply) are being paying on the repayment transactions

Please let me know any comment or doubt

Yes, can you tell me is there any way user can check how much tax he has paid till now. It will be better for compliance. While I also want to make sure that tax bifurcation is also documented on ticket too.

[alberto-art3ch]

@alberto-art3ch It seems GA check is giving error prone issue on fineract-tax:compileTestJava can you please check.
While i tried to look at the ticket. Can you confirm me the tax bifurcation logic. Asking based on usecase perspective while on ticket i tried to cross-check I cannot seem to understand how tax logic should be calculated not much relevant data i can find.

@alberto-art3ch It seems GA check is giving error prone issue on fineract-tax:compileTestJava can you please check.
While i tried to look at the ticket. Can you confirm me the tax bifurcation logic. Asking based on usecase perspective while on ticket i tried to cross-check I cannot seem to understand how tax logic should be calculated not much relevant data i can find.

I've reviewed the compilation issue in the fineract-tax Test part and solved. Thanks.
About the bifurcation logic about the Taxes in the Loan Charges is: If you have a Loan Charge with 100.00 as amount and you have a Tax of 15% in this case, the client pays the same 100.00 but internally (in the accounting) you will have three Journal Entries:

GL ACCOUNT
DEBIT
CREDIT

Fees Receivables
100.00

Income For Fees

85.00

Tax Liability

15.00

The Tax liability account is taken from Tax Component definition, and obviously it is linked to the Charge using the Tax Group
We are trying to follow a similar approach that we have in the Savings, so we are creating entities to have the detail about which Taxes (if apply) are being paying on the repayment transactions
Please let me know any comment or doubt

Yes, can you tell me is there any way user can check how much tax he has paid till now. It will be better for compliance. While I also want to make sure that tax bifurcation is also documented on ticket too.

To start, in the Loan Charge entity there is a new field that will store the Tax Amount (sum of all the different Taxes applied) of this Loan Charge.
Plus there is a new entity named LoanChargeTaxDetails that stores (in detail) the relation between Loan Charge and Tax Component and the amount of this.

In resume the data is already there, one way to know (as other ones) is with a report, or maybe we can extend the Loan Charge api details to have that data

[Aman-Mittal]

@alberto-art3ch It seems GA check is giving error prone issue on fineract-tax:compileTestJava can you please check.
While i tried to look at the ticket. Can you confirm me the tax bifurcation logic. Asking based on usecase perspective while on ticket i tried to cross-check I cannot seem to understand how tax logic should be calculated not much relevant data i can find.

@alberto-art3ch It seems GA check is giving error prone issue on fineract-tax:compileTestJava can you please check.
While i tried to look at the ticket. Can you confirm me the tax bifurcation logic. Asking based on usecase perspective while on ticket i tried to cross-check I cannot seem to understand how tax logic should be calculated not much relevant data i can find.

I've reviewed the compilation issue in the fineract-tax Test part and solved. Thanks.
About the bifurcation logic about the Taxes in the Loan Charges is: If you have a Loan Charge with 100.00 as amount and you have a Tax of 15% in this case, the client pays the same 100.00 but internally (in the accounting) you will have three Journal Entries:

GL ACCOUNT
DEBIT
CREDIT

Fees Receivables
100.00

Income For Fees

85.00

Tax Liability

15.00

The Tax liability account is taken from Tax Component definition, and obviously it is linked to the Charge using the Tax Group
We are trying to follow a similar approach that we have in the Savings, so we are creating entities to have the detail about which Taxes (if apply) are being paying on the repayment transactions
Please let me know any comment or doubt

Yes, can you tell me is there any way user can check how much tax he has paid till now. It will be better for compliance. While I also want to make sure that tax bifurcation is also documented on ticket too.

To start, in the Loan Charge entity there is a new field that will store the Tax Amount (sum of all the different Taxes applied) of this Loan Charge.
Plus there is a new entity named LoanChargeTaxDetails that stores (in detail) the relation between Loan Charge and Tax Component and the amount of this.

In resume the data is already there, one way to know (as other ones) is with a report, or maybe we can extend the Loan Charge api details to have that data

Need to ask Bharat and other PMC member for this. Thanks for explaining.

I just want to make sure these things are documented properly.