How to Use Fiscal Positions in Odoo Accounting

Introduction

Businesses that sell to customers in different countries or deal with both individual consumers and registered businesses face a common challenge: applying the correct tax rates.

A 21% VAT might apply to local sales, but what about exports to EU member states? What about sales to VAT-registered businesses versus consumers? Manually tracking and applying these different rates leads to errors and compliance risks.

Odoo's fiscal positions solve this problem. They automatically map default tax rates and accounts to the correct ones based on customer location, VAT status, or manual assignment. In this guide, you'll learn how to configure and use fiscal positions to handle complex tax scenarios with confidence.

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What Are Fiscal Positions?

Fiscal positions are sets of rules that automatically replace default taxes and accounts with alternatives based on specific conditions.

How they work:

• You set a default tax rate on your products (e.g., 21% VAT)
• Fiscal positions detect when a different rate should apply
• The system automatically substitutes the correct tax and account

Common use cases:

Scenario	Default Tax	Fiscal Position	Applied Tax
Local B2C sale	21% VAT	None	21% VAT
EU B2B export	21% VAT	Intra-Community	0% EU
Non-EU export	21% VAT	Extra-EU	0% Export
Tax-exempt customer	21% VAT	Tax Exempt	0%

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How Fiscal Positions Are Configured

Fiscal positions consist of two mapping types: tax mapping and account mapping.

Tax Mapping

Tax mapping defines which taxes replace the defaults when the fiscal position applies.

To view tax mappings:

1. Go to Accounting → Configuration → Taxes
2. Open a tax record (e.g., 0% EU)
3. Check the Fiscal Position field to see which positions use this tax
4. The Replaces field shows which default taxes this rate substitutes

For example, a 0% EU export tax might:

• Be assigned to the "Intra-Community" fiscal position
• Replace the standard 21% local tax

Account Mapping

Account mapping works the same way but for general ledger accounts.

To configure account mappings:

1. Go to Accounting → Configuration → Fiscal Positions
2. Open a fiscal position
3. Navigate to the Account Mapping tab
4. The left column shows accounts to replace
5. The right column shows replacement accounts

This ensures revenue and expense accounts are correctly categorized for different transaction types.

Legal Notes

The Legal Notes field at the bottom of a fiscal position form allows you to add text that automatically appears on invoices using that position. Use this for required legal disclaimers or tax exemption statements.

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How Fiscal Positions Are Applied

Odoo offers three methods for applying fiscal positions, from automatic to fully manual.

Method 1: Automatic Detection

The Detect Automatically feature assigns fiscal positions based on configurable rules.

Configuration options:

Setting	What It Does
VAT Required	Only applies if the partner has a valid VAT number
Country Group	Applies to partners in specified country groups (e.g., EU)
Country	Applies to partners in a specific country
Zip Range	Applies to partners within a postal code range

To configure automatic detection:

1. Go to Accounting → Configuration → Fiscal Positions
2. Open the fiscal position
3. Enable Detect Automatically
4. Set your location and VAT conditions

Method 2: Partner Default

You can assign a default fiscal position to specific customers or vendors.

Steps:

1. Go to Contacts and open the partner record
2. Navigate to the Sales & Purchase tab
3. Select a fiscal position in the Fiscal Position field

All future transactions with this partner will use the assigned fiscal position unless overridden.

Method 3: Manual Override

For specific transactions that need different handling, you can override the fiscal position directly on the invoice or bill.

Steps:

1. Create a new invoice or bill
2. Add the customer/vendor first (this applies their default fiscal position)
3. Go to the Other Info tab
4. Change the Fiscal Position field as needed

This change only affects the current document—it does not alter the partner's default settings.

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Best Practices for Fiscal Positions

Always Add the Partner First

When creating invoices or bills, add the customer or vendor before adding product lines. This ensures the correct fiscal position is applied from the start, and product taxes are calculated correctly.

Correct order:

1. Select the customer/vendor
2. Add product lines
3. Review applied taxes

Use the Taxes Smart Button

When viewing a fiscal position, click the Taxes smart button to see all tax rates associated with it. This provides a quick overview without checking each tax individually.

Leverage Pre-Configured Fiscal Localizations

Odoo's fiscal localization packages include pre-configured fiscal positions for common scenarios. For example, the Belgian localization includes:

• Intra-Community (EU B2B)
• Extra-Community (non-EU exports)
• Various domestic positions

Review these before creating custom positions—the one you need may already exist.

Test Before Going Live

Create test invoices with partners from different locations and VAT statuses. Verify that:

• The correct fiscal position is detected
• Tax rates are substituted properly
• Account mappings are applied

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Summary

Fiscal positions automate tax compliance by mapping default taxes and accounts to alternatives based on partner characteristics. Key points:

• Tax mapping replaces default product taxes with position-specific rates
• Account mapping directs transactions to the correct ledger accounts
• Automatic detection applies positions based on location and VAT status
• Manual assignment handles exceptions at the partner or transaction level

Configure your fiscal positions once, and Odoo handles the complexity for every invoice and bill going forward.

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What's Next

• Review your fiscal localization's pre-configured positions
• Set up automatic detection rules for your common scenarios
• Assign default fiscal positions to key partners
• Test with sample invoices before processing live transactions