ERP Tax Setup Overview

ERP Cloud Tax Set Up
Saudi Arabia
December, 2017
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Program Agenda
1 Tax Rapid Implementation

2 Sample Tax Set Up for Saudi Arabia (Basic and Tax Rules)
3 Sample Tax Box Allocation Set Up For Saudi Arabia
4 Appendix: Prerequisite Set Up
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Rapid Implementation Tax Configuration
Oracle Financials >Tax

Simple Tax Content Experience
Tax Rapid Implementation Upload 1
Define Tax Configuration Workbook Content
Download from Manage Tax Regimes*
*Alternatively, use tax partner, or implementer tax content.
2
Upload Tax Content & Enable Taxes
“Generate CSV File to Upload” button creates files for
upload. On successful completion, enable taxes for
transactions
3
Prepare & Upload Organization-Specific Configuration
Download the Tax Implementation Workbook for Tax Accounts,
Tax Registrations, Business Unit/Legal Entity Subscriptions
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Oracle Tax Configuration Workbook
• Basic tax set up, including:
– Tax Regime
– Tax Jurisdiction
– Tax
– Tax Status
– Tax Rate Codes
– Tax Recovery Rate Codes
• Tax Rules, including:

• Tax Rate type rules
• Place of Supply type rules
• Applicability type rules

Rapid Implementation Approach
E-Business Suite
• The information in this presentation relates to Oracle Financials Cloud

• E-Business Suite includes similar feature to enable rapid implementation of
tax configuration content
– Initial and Recurring Data Load for Tax Content Partners: Transaction Tax
Configuration Workbook
• A similar approach to the basic Tax Set up and Tax Rules for Saudi Arabia
can be taken for EBS
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Sample Tax Set up
Saudi Arabia

Disclaimer: Sample Tax Set Up
• The following slides and the associated spreadsheets provide sample tax
set up content, giving an example of how Oracle Tax could be configured
for Saudi Arabia
• It cannot be relied upon as ‘turnkey’ tax content solution for Saudi Arabia
• While it may serve as an initial implementation foundation or for
educational purposes, businesses must determine if there are specific tax
requirements for their business or industry

SA VAT Return

Saudi Arabia VAT Return
• Standard rated domestic sales
• Sales to registered customers in other GCC states
• Zero rated domestic sales
• Zero rated exports
• Exempt sales
• Standard rated domestic purchases
• Imports subject to VAT paid at customs
• Imports subject to VAT accounted for through the reverse charge mechanism
• Zero rated purchases
• Exempt purchases
• Corrections from previous period (up to 5,000 SAR)

Tax Rules Scope
Saudi Arabia
• Domestic: sales / purchases– Goods & Services
– Standard Rate; Zero Rate and Exempt
• Intra GCC: sales to customers registered in other GCC

– Treated as exports until all GCC countries implemented; need before and after tax rules
• Export: sales outside GCC (Export)

– Need Tax rules for before and after all GCC countries implemented
• Import: Purchases subject to reverse charge (Intra GCC)

– Not applicable until after all GCC implemented
• Import: Purchases from outside GCC

– Applicable before GCC countries implemented, this also applies to imports from UAE
– VAT collected at customs, but also reported in VAT return
• Intra Tax Group: sales and purchases ‘not within scope of tax’ (need to add slides)
– Not included in VAT Return but can be separated out from standard for reporting

Tax Rules Use Case Assumptions
Saudi Arabia
• Tax Rules: cover use case where Oracle Supply Chain Cloud >Inventory is implemented
and is in use (Inventory Linked)
• Additional Tax Rules: cover use case where Inventory items are not used on invoice or
where the customer has not implemented Inventory (Non Inventory Linked)

Basic Tax Set Up
Saudi Arabia
• Tax Regime = SA VAT TAX
• Tax Jurisdiction = SA VAT TAX
• Tax = SA VAT TAX
• Tax Status = SA VAT TAX
• Tax Rate Codes
– SA VAT TAX STANDARD RATE (5%)
– SA VAT TAX ZERO RATE (0%)
– SA VAT TAX IMPORT RATE (5%)
– SA VAT TAX EXPORT RATE (0%)
– SA VAT TAX EXEMPT RATE (0%)
– SA VAT TAX INTRA GCC RATE (0%)
• Tax Rate Recovery Code = SA VAT STANDARD RECOVERY RATE (100% recovery)

Tax Rule Defaults
Saudi Arabia
• Manage Taxes > Tax Rule Defaults
– Applicability = Applicable
– Place of Supply = Ship From
– Registration = Bill From Party
– Tax Calculation Formula = STANDARD_TC
– Tax Basis Formula = STANDARD_TB
– Tax Jurisdiction = SA VAT TAX
– Tax Status = SA VAT TAX
– Tax Rate = SA VAT STANDARD RATE
– Tax Recovery Rate = SA VAT STANDARD RECOVERY RATE

Tax Rules – Inventory Linked
Saudi Arabia

SA Tax Rules: Domestic Sale/Purchase (Goods and Services)
• Standard Rate: • Default tax rate is SA VAT TAX Standard Rate
– No rules required for domestic standard rated sales and
– SA VAT TAX STANDARD RATE (5%) purchases
• Tax Rate rule type: Other tax rates

• Other rates – Determining factor/Conditions
– SA VAT TAX ZERO RATE (0%) • Product Inventory Linked - Product Category = category codes
– Zero : goods = SAG0101; services = SAS101
– SA VAT TAX EXEMPT RATE (0%) – Exempt: goods = SAG0104; services = SAS102
– Result = specific rate codes: SA VAT TAX ZERO RATE or SA

VAT TAX EXEMPT RATE
• Application rule type (P2P only)
• Purchases from non-registered – Determining factor/Condition
suppliers • Registration - Registration Status - Ship from not = Registered
– Result = Not Applicable

SA Tax Rules: Intra GCC Sales (Applicable after all GCC implemented)
• Sales of goods to customers • Tax Rate rule type
registered for VAT in other GCC – Determining factors/Conditions:
country • Transaction Generic Class - Transaction Business
Category = Sales Transaction
• Needs to include legal message on • Registration - Registration status - bill to party &
bill from party = Registered in GCC
invoice (achieved by using ‘Tax Reporting Type
• Geography - Country = for ship from = SA and for
codes’ on Tax Rate Code)
ship to not = SA
• Tax Rates • User defined Geography- Economic Region> ship
to = GCC
– SA VAT TAX INTRA GCC RATE (0%) – Result = rate codes
• SA VAT TAX INTRA GCC RATE
*Applicable after all GCC countries
implemented

SA Tax Rules: Export Sales (*before all GCC implemented)
• Export of goods and services to • Rate rule type
countries outside SA – Determining factors/Conditions:
• Transaction Generic Class - Transaction Business
• Tax Rates Category = Sales Transaction
– SA VAT TAX EXPORT ZERO RATE (0%) • Geography - Country = ship from = SA and ship to
not = SA
– Result = SA VAT TAX EXPORT RATE
* Applies to supplies to GCC countries
before all GCC countries have
implemented VAT

SA Tax Rules: Export Sales (*after all GCC implemented)
• Export of goods and services to • Rate rule type
countries outside GCC – Determining factors/Conditions:
• Tax Rates Category = Sales Transaction
– SA VAT TAX EXPORT ZERO RATE(0%) • Geography - Country = ship from = SA and ship to
not = SA
• User defined Geography - Ship to - Economic
* Applies to all non GCC countries after Region not = GCC
all GCC countries implemented – Result = SA VAT TAX EXPORT RATE

SA Tax Rules: Import from Outside SA (*before GCC implemented)
• Import from countries outside GCC • Rate rule type
– Determining factors/Conditions:
• VAT payable on imports into the KSA
will be collected by the Customs Category = Purchase Transaction
Department at the time of the • Geography - Country = ship from not = SA and
ship to = SA
import
– Result = SA VAT TAX IMPORT RATE
• SA VAT TAX IMPORT RATE(5%)
* For imports from GCC countries

this rule is applicable before all GCC
countries have implemented

SA Tax Rules: Imports from Outside GCC (*after GCC implemented)
• Import from countries outside GCC • Rate rule type
• VAT payable on imports into the KSA
will be collected by the Customs Category = Purchase Transaction
Department at the time of the • Geography - Country = ship to = SA and ship from
not = SA
import
• User defined Geography - Ship to - Economic
• SA VAT TAX IMPORT RATE(5%) Region not = GCC
* Applicable after all GCC countries – Result = SA VAT TAX IMPORT RATE
implemented

SA Tax Rules: Imports from GCC Countries (*after GCC implemented)
• Purchases subject to reverse charge • Registration rule type
(self assessment) • Transaction Generic Class - Transaction Business Category = Purchase
Transaction
• Must be accounted and declared as • Registration - Bill From - Registration status = Registered
• Geography - Country = for ship from no = SA and for ship to = SA
both Input and Output VAT • User defined Geography - Ship from - Economic Region = GCC
– Result = bill to party
• Tax Rate = applicable standard rate • Place of Supply rule type
– SA VAT STANDARD RATE (5%) – Determining factors/Conditions
• Transaction Generic Class - Transaction Business Category = Purchase
Transaction
• Registration - Bill From - Registration status = Registered
• Geography - Country = ship from not = SA and ship to = SA
Note: ’Self Assessed’ must be checked on LE • User defined Geography - Ship from - Economic Region = GCC
Reporting Unit Tax Profile Result = Ship to, use bill to if ship to not found
* Not applicable until all GCC countries implemented

Tax Rules – Non Inventory Linked
Saudi Arabia
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Tax Rules for Non-Inventory Linked Sales
Saudi Arabia
• Place of Supply in AP transactions is derived from vendor site address and

do not require additional tax rules
• Place of Supply in AR transactions is derived from ‘warehouse’
– Where Inventory Items not used there is no warehouse on the AR transaction
– ‘Place of Supply’ needs to be switched from the default of ‘Ship From’ to ‘Bill From’
• Tax Rate default is SA VAT TAX STANDARD RATE
– Tax rate needs to be switched for Zero Rate; Exempt Rate; Intra EU and Export Sales
• Rules based on use of Tax Classification Codes in AR invoices
– Selected manually on transaction or defaulted from Standard Memo Line

Tax Rules Scope - Non-Inventory Linked
Saudi Arabia
• Different tax rules for sales transactions are required where Inventory is
not implemented
• Rules
– Domestic: sales / purchases– Goods & Services
• Standard Rate; Zero Rate and Exempt
– Intra GCC: sales to customers registered in other GCC
• Treated as exports until all GCC countries implemented; need before and after tax rules
– Export: sales outside GCC (Export)
• Need Tax rules for before and after all GCC countries implemented

SA Tax Rules: Non Inventory Linked Domestic Sales
• Non Inventory Linked Sales: • Place of Supply Rule
– Domestic sales – Determining factors/Conditions:
• Tax Rate Category = SALES_TRANSACTION
– SA VAT TAX STANDARD RATE (5%) • Transaction Input Factor – Tax Classification Code
= SA VAT TAX STANDARD RATE or SA VAT TAX ZERO
– SA VAT TAX ZERO RATE (0%) RATE or SA VAT TAX EXEMPT RATE
– SA VAT TAX EXEMPT RATE (0%) – Result = Bill From

• Rate rule
(Note: Current set up has Default POS = Ship From. For AR
• Transaction Generic Classification> Level 1> Transaction Business Category
transactions the ‘Ship From’ POS is derived from the = SALES_TRANSACTIONS
Inventory Org. For non-inventory linked transactions we • Geography > Bill from> Country = SA
need a POS rule to switch place of supply to ‘Bill From’)
• Geography> Bill to > Country = SA
• Transaction Input Factor = Tax Classification Code = SA VAT TAX STANDARD
RATE or SA VAT TAX ZERO RATE or SA VAT TAX EXEMPT RATE Result = SA
VAT TAX ZERO RATE or SA VAT TAX EXEMPT RATE

SA Tax Rules: Non Inventory Linked Intra GCC Sales
– Intra GCC Sales • Transaction Generic Class - Transaction Business Category =
SALES_TRANSACTION
• Transaction Input Factor – Tax Classification Code = SA INTRA
GCC SALES
• Tax Rate – Result = Bill From
– SA VAT TAX INTRA GCC (0%) • Rate rule
• Transaction Generic Classification> Level 1> Transaction Business Category
= SALES_TRANSACTIONS
• Registration> Bill to> Registration Status = REGISTERED
• Registration> Bill from> Registration Status = REGISTERED
• Geography > Bill from> Country = SA
• Geography> Bill to > Country not = SA
• User defined Geography> Bill to>Economic Regions = GCC
• Transaction Input Factor = Tax Classification Code = SA INTRA GCC SALES
– Result = SA VAT TAX INTRA GCC

SA Tax Rule: Non Inventory Linked Exports (*before GCC implemented)
– Export of to countries outside GCC • Transaction Generic Class - Transaction Business Category =
SALES_TRANSACTION
• Tax Rates • Transaction Input Factor – Tax Classification Code = SA EXPORT
– SA VAT TAX EXPORT ZERO RATE (0%) – Result = Bill From
• Rate rule
* Applicable before all GCC countries implemented – Determining factors/Conditions:
– Transaction Generic Classification> Level 1> Transaction Business
Category = SALES_TRANSACTIONS
– Geography > Bill from> Country = SA
– Geography> Bill to > Country not = SA
• Result = SA VAT TAX EXPORT RATE

SA Tax Rule: Non Inventory Linked Exports (*after GCC implemented)
– Export of to countries outside GCC • Transaction Generic Class - Transaction Business Category =
SALES_TRANSACTION
• Tax Rates • Transaction Input Factor – Tax Classification Code = SA EXPORTS
– SA VAT TAX EXPORT ZERO RATE (0%) – Result = Bill From
• Rate rule
* Applicable after all GCC countries implemented – Determining factors/Conditions:
– Transaction Generic Classification> Level 1> Transaction Business
Category = SALES_TRANSACTIONS
– Geography > Bill from> Country = SA
– Geography> Bill to > Country not = SA
– User defined Geography> Bill to>Economic Regions not = GCC
Transaction Input Factor = Tax Classification = SA EXPORTS
• Result = SA VAT TAX EXPORT RATE

Sample Tax Box Allocation Rules
Saudi Arabia

Tax Box Allocation Solution
• Oracle Tax includes a flexible, rules driven tax reporting solution that aids in
the preparation of VAT return
• This solution is not available in E-Business Suite

SA VAT Return

Fusion Tax Box Allocation Solution
Fusion Tax Box Allocation
•Tax Box Allocation Rules

Tax Box Define Tax Define Tax
Define Tax
Define Tax •Tax Box Allocation Processes
Allocation
Rules
Reporting
Type Codes
Determining
Factor Sets
Condition Sets
Allocation
Rules •Tax Box Allocation Reports
Run Tax Box

Selection Run Selection
Allocation
Processes Process
Process
Run Tax Box Run Tax Box

Run Tax Box
Allocation Return
Reporting Allocation
Exceptions Preparation
Listing Report
Report Report

Fusion Tax Box Allocation – Tax Reporting Type Codes
Tax Reporting Type Codes

•If Tax Reporting Type Purpose is ‘Tax
Box Allocation’ Tax Box Details region is
displayed
•Assign Tax Box Numbers
Note: GB is used here in the UI as an

example

Tax Reporting Type Codes
Tax Box Allocation Rules – Saudi Arabia

Fusion Tax Box Allocation – Determining Factors Sets
Tax Determining Factor Sets

• Set Usage = ‘Tax Box Allocation Rule’
•Allows use of specific Determining Factors and
qualifiers
For example:
In SA tax boxes can be allocated based
on the type of transaction line and Tax
Rate Codes on the transaction
Determining Factors:
•Derived = Tax Rate Name
•Transaction Input Factor = Line Class
Note: GB is used here in the UI as an example

Tax Determining Factors

Fusion Tax Box Allocation – Condition Sets
Tax Condition Sets

• Assign the Determining Factor set to
the Condition set
•Enter the operator and the condition
value
•For example: SA VAT TAX STANDARD

RATE
Note: GB is used here on the UI as an example

Tax Condition Sets

Fusion Tax Box Allocation – Tax Box Allocation Rules
Tax Box Allocation Rules Set Up UI

•Tax Determining Factors / Condition
Sets
Example: Domestic AR invoices with

standard rate VAT
•Determining Factor Set/conditions:
•Drived = tax rate = SA VAT STANDARD RATE
•Transaction Input Factor > Line Class = INVOICE

Fusion Tax Box Allocation Solution
Tax Box Allocation Rules Set Up UI

• Results = ‘Tax Reporting Type
Codes’ used to assign tax box
numbers
Example AR invoices with standard

rate VAT:
•Determining Factor Set/conditions:
•Drived = tax rate = SA VAT STANDARD RATE
•Transaction Input Factor > Line Class INVOICE
•Result
• Taxable allocated to Box = 0101 SALES STD RATED
DOMESTIC

Tax Box Allocation Rules

Appendix: Prerequisite Set up
Saudi Arabia

Tax Set Up Steps
Saudi Arabia
• Document sequencing – see Topical Essay
• Legal Entity Reporting Unit Tax Profile
– Registration Status = Registered
– ’Self Assessed’ must be checked on
– Enable ‘Allocation’ & assign ‘Tax Calendar’
• Tax Regime
– Assign the Legal Entity to the Tax Regime
– Enable 'Use tax reporting configuration'
• Tax - Enable Duplicate Tax Registrations (if VAT Tax Groups required)

Tax Set Up Steps
Saudi Arabia
• Tax Zone = GCC – see ’Economic Zones Set Up.ppt’
• Supplier and Customer Tax Registration
• Tax Classification codes > Manage Tax Lookup Codes> Lookup Type = ZX_Output
• Product Category – assign to item

Tax Regime> Assign LE & Use Tax Reporting Configuration
Manage Tax Regime>
• Configuration Options> add Legal Entity
• General Controls > enable ‘Use Tax

Reporting Configuration

Legal Entity Reporting Unit Tax Profile
Manage Party Tax Profile> Legal Entity
Reporting Unit > General Tab
• Tax Registration Status = Registered

• Enable ‘Set as Self-assessed (reverse
charge)

Legal Entity Reporting Unit Tax Profile
Manage Party Tax Profile> Legal Entity
Reporting Unit > Reporting Configuration
• Tax Registration Status = Registered

• Enable ‘Set as Self-assessed (reverse
charge)

Enable Duplicate Tax Registrations
Manage Taxes> View Tax Registration
Details>Edit>Allow Duplicate Registration
Numbers

Third Party Site Tax Profile > Registration Status
Registration Status = Registered
•Manage Tax Registration> Third Party Site

Tax Profile > Tax Registration tab > View
Registration> Edit
•Ensure Tax Regime = SA VAT TAX
Required to make Intra GCC Sales and

Purchase rules work

Tax Classification Codes
Manage Tax Lookup Codes
• Lookup Type = ZX_OUTPUT

Assign Tax Classification Code to Standard Memo Line
Assign Tax Classification Codes to Standard
Memo Line code
•Manage Standard memo Lines> search

Memo Line Set (eaxmaple:UK1 BU SET)
•Edit or create new memo line
•Add Tax Classification codes as required
(example Consultant (UK) is set up)
Required if you are using Standard Memo

Lines to default ‘Tax Classification Code’ on a
non-inventory linked AR invoice

Assign Product Category to Item
Assign Product Category to Relevant Items
•User name = Karen Curtis
•Manage Items > search for required item

• Add Catalog *‘SA PROD_CLASS_CLIC
•Add required category
(example set up in item FI90000 = Reduced

Rate item)
Required to make Zero Rate; Reduced Rate

and Exempt Rate rules work
(* - needs to be added)

Imports - 3 Key Considerations

Import VAT at Launch

Imports from GCC after Integrated System in Place


ERP Tax Setup Overview

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ERP Cloud Tax Set Up

Copyright © 2017, Oracle and/or its affiliates. All rights reserved. |

1 Tax Rapid Implementation

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• Tax Rules, including:

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• The information in this presentation relates to Oracle Financials Cloud

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• Intra GCC: sales to customers registered in other GCC

• Export: sales outside GCC (Export)

• Import: Purchases subject to reverse charge (Intra GCC)

• Import: Purchases from outside GCC

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• Tax Rate rule type: Other tax rates

– Result = specific rate codes: SA VAT TAX ZERO RATE or SA

– Result = Not Applicable

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* For imports from GCC countries

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* Not applicable until all GCC countries implemented

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• Place of Supply in AP transactions is derived from vendor site address and

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– SA VAT TAX EXEMPT RATE (0%) – Result = Bill From

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– SA VAT TAX EXPORT ZERO RATE (0%) – Result = Bill From

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– SA VAT TAX EXPORT ZERO RATE (0%) – Result = Bill From

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•Tax Box Allocation Rules

Run Tax Box

Run Tax Box Run Tax Box

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Tax Reporting Type Codes

Note: GB is used here in the UI as an

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Tax Determining Factor Sets

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Tax Condition Sets

•For example: SA VAT TAX STANDARD

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Tax Box Allocation Rules Set Up UI