I don't believe that is a black and white answer to this. It will depend on the executing organization and the laws of the land. It will depend on the type of tax, and whether collected duties are offset against paid duties (for example, VAT). In many organizations, the project budget will not include VAT. Other duties which are included in the cost of materials may get included in the project budget if they cannot be offset directly.
Organizations can also decide whether they include all indirect costs into a project budget or not. Thus taxes on profit could be included or not. Saving Changes...
In Canada, we put the taxes in a separate line ... Normally we pay GST tax and some organizations like non-for-profits get rebate so this is not 100% Black and white.
Ivo mentiined some very important points.
On the other hand, inside our overall budget for the project (Hard + Soft Costs), there is a Budget for Construction which will include PST + GST taxes depending on the nature of the subcontractor if it is supply only or supply and install. Saving Changes...
It depends on your business management processes and whether the budget you are working to is all inclusive, or there is another layer of management that deals with taxes, duties, time value of money, etc. Saving Changes...
It is my opinion that Costs are outlays of Cash to procure the necessary items to complete your objective and deliverable.
Whatever the name or title, if you cannot obtain your Supplies, Materials, or Subcontract work without paying it, then it is a direct cost to the Project.
However, in the case of VAT's or other Government imposed Taxes, it is common to line item those costs separately- sometimes these costs are recoverable depending on the Contract.
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