R12 E-Business Tax: Laurie Loeber

R12 E-Business Tax
Laurie Loeber
lloeber@impacservices.com
Senior Principal Consultant
Impac Services
Copyright 2010, Impac Services. All rights reserved.
Agenda
E-Business Tax and Tax Terms
R12 Tax Structure
Upgrade/Migration Path
Options
Creating a New Structure
What is E-Business Tax?

New Module in Release 12
New Tax Engine that automates tax calculation
across all Order to Pay and Procure to Pay
applications
Use E-Business Tax to set up and maintain your
transaction tax requirements in all geographic
locations where you do business
R12 Tax Terms

Tax Regime
Tax
Tax Status
Tax Jurisdictions
Tax Codes/Rates
Tax Recovery Rates
Tax Rules
STCC
R12 Structure
Canadian Structure
R12 Structure
United States Structure
Upgrade and Migration

What happens during Migration (R11 to R12)
A tax regime was created for each operating unit defined in 11i. These tax
regimes, named as 2 digit country code (from the Operating Unit Address) - tax,
(ex: US-TAX) hold the tax setup that has been upgraded.
Tax was created for each tax code
Tax Status was created for each tax code
Tax Rate was created for each tax code
Tax codes are created and stored in a lookup table as "Output" tax
classification codes
The tax regime has a "subscription" defined to the operating unit(s) where
taxes are to be calculated for the regime Country.
Upgrade and Migration
A Tax "Rule" is created as a "Direct rate rule". This sets the

relationship between the tax classification code and the tax, tax
status and tax rate.
STCC:
After an upgrade, the system will set "Configuration Owner Tax
Options" for each product and event class (An event class would be
Invoices, Credit Memo, etc). This will be set as "Standard Tax
Classification Code" or STCC following an upgrade. This, combined
with the Direct Rate Rule that is created during the 11i upgrade
result in special code to be called when calculating taxes.
R12 New or Fresh setup will use the "Determine Tax Regime" tax
determination method.
Migrated R11 Structure
Why Move to R12 Structure?

R12 Upgraded Structure has limitations, including:
Restrictions on creating new tax rules
Restrictions on Modifying or adding to existing tax rules
Restrictions on creating new tax jurisdictions
Restrictions on creating new taxes
You cannot modify existing tax formulas
You cannot implement partner integrations such as Vertex or
Taxware
Why Move to R12 Structure?

You cant set up new tax groups
These limitations often make it difficult to use an upgraded a tax
regime for extended periods of time. And, tax laws change or your
business may expand into new areas covered by different tax laws.
Benefits/Reasons for setting up fresh structure:
More flexibility to add/remove tax codes
Able to automate many of the tax decisions through the creation of
tax rules
Single Source/Shared Module
All Legal Entities and Operating Units of the company can share the
same tax setup.
Individual Operating Units can still own tax setup for their specific
requirements as needed or as defined by the tax authority.
Option 1-Modify Upgraded Structure
Option 2 Create New Structure

End-date the upgraded regime and
replace it with a new/freshly configured
Regime.
Option 2 is the recommended method.
How To Create a New Structure

Steps for Creating a new Structure:
Step 1 Update the Tax Profile
Step 2 Set up the new Regime to Rate Flow
Step 3 Set up New Tax Rules
Step 4 Update the Configuration Tax Options
Step 5 Update Parties (Suppliers and/or Customers)
Step 6 Test, Test, Test!
Pre-Requisites
Setting up the Applications for E-Business Tax:
1.
2.
3.
4.
5.
6.
7.
8.
9.
Setting Up Tax Users

Setting Profile Option Values
Setting Up Lookup Codes
Setting Up TCA Geography Hierarchy
Setting Up Legal Entity
Setting Up Operating Units
Setting Up Accounts and Accounting Information
Setting Up TCA Classifications
Setting Up Oracle Inventory
TCA Architecture
Step 1
Update the Tax Profile
Step 1
Step 2-Create A Regime

Tax Regime:
Step 2 Create a Regime

Assign Regime to a Party
Step 2 Create a Tax
Step 2 Create a Tax
Step 2 Create a Tax Status
Step 2 Create a Jurisdiction

OR Jurisdiction

WA Jurisdiction

ID Jurisdiction
Step 2 Create a Tax Rate

Idaho-6%
Step 3 Create a Tax Rule

Before

Determine Place of Supply

After
Step 3 Make Tax Available

Tax
Step 3 Regime to Rate Flow

Completed Tax Structure Regime to Rate Flow
Step 4 Application Options
Last change the Tax Regime from STCC to Direct Rate by Enddating the old Configuration Owner and creating a new
Configuration Owner record.
Step 4 Application Options

Create the new Configuration Owner record.
Step 5 Update Party Records

Optionally, Call up specific supplier and/or customer
records and assign them as exempt or as a no-rate
code.
Step 6 TEST, TEST, TEST!

AR Idaho Customer 6% Tax Rate

AR-Oregon customer 0% Tax Rate

AP Washington Supplier 9.5% Rate

Oregon Supplier -0% Tax Rate
Questions???
R12 E-Business Tax

Laurie Loeber
lloeber@impacservices.com
Senior Principal Consultant
Impac Services

R12 E-Business Tax: Laurie Loeber

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R12 E-Business Tax

Copyright 2010, Impac Services. All rights reserved.

Copyright 2010, Impac Services. All rights reserved.

What is E-Business Tax?

Copyright 2010, Impac Services. All rights reserved.

R12 Tax Terms

Copyright 2010, Impac Services. All rights reserved.

United States Structure

Copyright 2010, Impac Services. All rights reserved.

Upgrade and Migration

Tax was created for each tax code

Tax Status was created for each tax code

Tax Rate was created for each tax code

Copyright 2010, Impac Services. All rights reserved.

Upgrade and Migration

A Tax "Rule" is created as a "Direct rate rule". This sets the

Copyright 2010, Impac Services. All rights reserved.

Migrated R11 Structure

Copyright 2010, Impac Services. All rights reserved.

Why Move to R12 Structure?

Copyright 2010, Impac Services. All rights reserved.

Why Move to R12 Structure?

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Option 1-Modify Upgraded Structure

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Option 2 Create New Structure

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How To Create a New Structure

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Setting Up Tax Users

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Step 2-Create A Regime

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Step 2 Create a Regime

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Step 2 Create a Tax

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Step 2 Create a Tax

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Step 2 Create a Tax Status

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Step 2 Create a Jurisdiction

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Step 2 Create a Jurisdiction

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Step 2 Create a Jurisdiction

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Step 2 Create a Tax Rate

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Step 2 Create a Tax Rate

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Step 2 Create a Tax Rate

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Step 2 Create a Tax Rate

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Step 2 Create a Tax Rate

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Step 3 Create a Tax Rule

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Step 3 Create a Tax Rule

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