From b8c90e2be223710e71044676056bb5847f354b1b Mon Sep 17 00:00:00 2001
From: Tharun Ravi Kumar <ravikutn@mail.uc.edu>
Date: Wed, 16 Sep 2026 11:41:38 -0500
Subject: [PATCH] docs(tax): design withholding tax schema

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+# Tax Metrics — Withholding-Tax Field Schema
+
+**Owner:** Tharun Swaminathan
+**Iteration:** 1 — Design & Data Modelling
+**Date:** September 16, 2026
+
+## Objective
+
+The purpose of this design is to define how dividend withholding tax should be
+represented in Ghostfolio before implementation begins in Iteration 2.
+
+The design builds on the existing Ghostfolio activity model instead of creating
+a separate dividend transaction structure.
+
+This task defines the proposed fields, calculation relationships, validation
+rules, currency behavior, backward compatibility, and future API impact.
+
+No database or application code is changed as part of this task.
+
+## Existing Dividend Model
+
+Ghostfolio currently stores dividend transactions as normal `Order` activities
+with:
+
+`type = DIVIDEND`
+
+The existing activity already contains the main values needed for a dividend,
+including:
+
+- `quantity`
+- `unitPrice`
+- `currency`
+- `date`
+- `fee`
+
+The dividend value can be determined from:
+
+`grossDividend = quantity × unitPrice`
+
+The existing `fee` field is a general activity fee and should remain separate
+from dividend withholding tax.
+
+## Proposed Stored Field
+
+The proposed new field on the existing Prisma `Order` model is:
+
+`withholdingTax Float?`
+
+### Meaning
+
+`withholdingTax` represents the actual tax amount withheld from a dividend
+payment.
+
+The amount is stored in the activity's `currency`.
+
+Example:
+
+If the dividend activity uses USD, a value of:
+
+`withholdingTax = 15.00`
+
+means that 15.00 USD was withheld from that dividend payment.
+
+### Why the Amount Is Stored
+
+The withholding-tax amount should be treated as the authoritative value because
+it represents the actual amount deducted from the dividend.
+
+This also provides better traceability for imported transactions and future tax
+reports.
+
+The withholding percentage can be calculated from the stored amount when
+needed, so storing both the amount and percentage would introduce the possibility
+of inconsistent values.
+
+## Null and Zero Behavior
+
+The field should be nullable.
+
+`withholdingTax = null`
+
+means that withholding information is unknown or was not provided.
+
+`withholdingTax = 0`
+
+means that withholding information is known and no tax was withheld.
+
+This distinction is important for imported and historical transactions.
+
+Missing withholding information should not automatically be interpreted as zero.
+
+This allows existing Ghostfolio dividend records to remain valid after the new
+field is introduced.
+
+## Derived Values
+
+The tax feature should keep gross dividend, withholding tax, withholding rate,
+and net dividend as separate values.
+
+### Gross Dividend
+
+`grossDividend = quantity × unitPrice`
+
+The gross dividend is derived from the existing activity fields.
+
+### Withholding-Tax Amount
+
+`withholdingTax`
+
+This is the stored value.
+
+### Withholding-Tax Rate
+
+The withholding rate is derived rather than stored:
+
+`withholdingTaxRate = withholdingTax / grossDividend × 100`
+
+The rate can only be calculated when:
+
+- `grossDividend > 0`
+- `withholdingTax` is not null
+
+Otherwise:
+
+`withholdingTaxRate = null`
+
+### Net Dividend
+
+The net dividend after withholding is:
+
+`netDividend = grossDividend - withholdingTax`
+
+If `withholdingTax` is unknown (`null`), the tax analytics layer should not
+silently assume that withholding was zero.
+
+In that case:
+
+`netDividend = null`
+
+for tax reporting purposes.
+
+This preserves the difference between "no tax was withheld" and "we do not know
+whether tax was withheld."
+
+## Activity Fee
+
+Activity fees and withholding tax should remain separate.
+
+For a dividend:
+
+`grossDividend = quantity × unitPrice`
+
+`netDividend = grossDividend - withholdingTax`
+
+If the dividend also has an activity fee, the cash effect can later be expressed
+separately as:
+
+`netCashAmount = netDividend - fee`
+
+This prevents brokerage fees from being treated as tax.
+
+## Proposed Prisma Change
+
+The future Iteration 2 implementation is expected to extend the existing
+`Order` model with:
+
+```prisma
+withholdingTax Float?
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