Tax Processing

Copyright 2007, Oracle. All rights reserved.

Objectives

After completing this module, you should be able to do

the following:
Understand the E-Business Tax and Receivables
Tax Process
Define Receivables Setup Steps for Tax
Manage Tax Accounting and Tax Adjustments

Copyright 2007, Oracle. All rights reserved.

Agenda

Understand the E-Business Tax and Receivables Tax

Process
Define Receivables Setup Steps for Tax
Manage Tax Accounting and Tax Adjustments

Copyright 2007, Oracle. All rights reserved.

Oracle E-Business Tax

Architecture Overview
E-Business Suite
Transaction Data

Transaction Tax Data

Oracle E-Business Tax

Tax Services Request Manager

Content
Repository

Services
Tax
Content
Services

Tax
Determination
Services

Tax
Administration
Services

Record
Repository
Partner
Tax Content
Interface

Partner
Tax Services
Interface

Tax Partner
Tax Content

Copyright 2007, Oracle. All rights reserved.

Tax Services

Oracle E-Business Tax

Key Concepts And Examples

Tax Authority
Tax Regime
Tax
Tax Jurisdiction

Tax Authority

Tax Regime

Tax

Tax Jurisdiction

California State
Board of
Equalization (U.S.A.)

California Sales Tax

State Sales Tax

County Sales Tax

California (State)
San Francisco
(County)

HM Customs and
Excise (U.K.)

UK VAT

UK VAT

UK

Canadian Customs
and Revenue Agency
(Canada)

Canadian Goods and

Services Tax

GST

Ontario

Secretaria da
Receita Federal
(Brazil)

RICMS Regulamento do
ICMS

CMS

So Paulo

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Calculating Tax on Transactions

Receivables
Tax Rate Code

Invoice

E-Business Tax
Tax Rules

Receivables
Tax Rules Engine

Transaction with Tax

Distributions

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Calculating Tax Using

the Tax Classification Code
Tax
Classification
Code
Revenue
Account

Items

Sites

Default Tax
Classification Code

E-Business Tax

Direct Tax Rate

Determination Rule

Customers

Receivables

Tax Rules Engine

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Transaction with Tax

Distributions

Global Tax Overview

Value Added Tax (VAT)

Sales Tax

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Tax Overview

Input Tax

Tax paid out on

supplier invoices

Output Tax

Tax collected on
customer invoices

Amount Due to Tax Authority =

Output Tax - Recoverable Input Tax

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Value Added Tax Overview

.50

.25
1.00

VAT TAX = .50 + 1.00 + .25 + .50

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.50

US Sales Tax Overview

Customer pays supplier cost of

item plus sales tax

$100 item +
$10 sales tax

$10 sales
tax

State collects
sales tax
Supplier remits
sales tax to state
tax authority
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Tax Partner Process Overview

Tax
Information
Oracle E-Business
Tax Service Subscription

Tax Partner

Tax Rate
Tax Amount
AutoAccounting

Copyright 2007, Oracle. All rights reserved.

Agenda

Understand the E-Business Tax and Receivables Tax

Process
Define the Receivables Tax Setup Steps
Manage Tax Accounting and Tax Adjustments

Copyright 2007, Oracle. All rights reserved.

Setting Up Receivables
for Tax Calculation

Receivables
Tax Setup

Receivables

E-Business Tax

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Defining Transaction Types

and Tax Exemptions
Calculate tax
using Tax
Classification
Codes
Default Tax Classification
Check Box

Customer and Customer Sites Not Subject to Tax

Assign

Tax
Exemption

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Defining AutoAccounting for Tax

AutoAccounting

In the AutoAccounting Window

enter:
Tax in the Type Field
Segment Names
Value used to derive the
Account

01-110-7340-0000-000

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General Ledger
via SLA

Enabling Calculation of Tax on Freight

Create freight amounts as regular invoice lines

Use an inventory item to define freight services and
enable AutoAccounting to distinguish between freight
and regular line items

AutoAccounting

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Defining E-Business Tax

Profile Options for Receivables

eBTax: Allow Manual Tax Lines

eBTax: Allow Ad Hoc Tax Changes
eBTax: Allow Override of Customer Exemptions
eBTax: Allow Override of Tax Classification Code

Profile
Options

5%
Copyright 2007, Oracle. All rights reserved.

Defining E-Business Tax

Profile Options for Order Management
Profile Option

Setting

Reason

eBTax: Invoice
Freight as
Revenue

Yes

Enables freight amounts entered in

Oracle Order Management to be
passed to Oracle Receivables as
taxable line items.

eBTax:
Inventory Item
for Freight

Freight
Charge or
Freight for
Intercompany

Lets Oracle Order Management

identify an inventory item as
freight on a transaction line
imported into Oracle Receivables
via the Receivables Interface
program.

Copyright 2007, Oracle. All rights reserved.

Agenda

Understand the E-Business Tax and Receivables Tax

Process
Define the Receivables Tax Setup Steps
Manage Tax Accounting and Tax Adjustments

Copyright 2007, Oracle. All rights reserved.

Tax Accounting Overview

Set up Tax Accounting Information for Tax
Rate Codes and Receivables Activities

Miscellaneous
Cash

Deferred Tax

Earned
Unearned
Adjustments
Late charges
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Discounts

Setting Up Tax Accounting

for Deferred Tax
Tax Collected

Deferred Tax
Deferred
Tax

Tax Rate
Code

5%

Tax &
Interim Tax
Accounts

Tax Rate
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Defining Receivables Activities

To set up Receivables
Activities for Tax Accounting:
1. Define GL Account.
2. Select Tax Rate Code
Source.
3. Check Recoverable
or Non Recoverable.
4. Enter Tax Rate Code if Tax
Rate Code Source Option
is the Activity.

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Updating the Tax Rate on Transactions

Transactions or Transactions Summary

Tax Rate
Code

Profile
Option

eBTax: Allow Ad Hoc Tax Changes

With AutoAccounting
Rerun Review
Accounting

To Update the
Tax Account

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Adjusting Tax on Invoices

Adjustment
entry with
Receivables
Activity

Validation
process

Approval limit
$500

Approved
or Pending

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Tax Credit Memo

Customer
Account

Credit
Memo

OR
Amount

Percent

Copyright 2007, Oracle. All rights reserved.

Summary

In this module, you should have learned how to:

Understand the E-Business Tax and Receivables Tax
Process
Define the Receivables Tax Setup Steps
Manage Tax Adjustments

Copyright 2007, Oracle. All rights reserved.