You are on page 1of 0

Ebiz concepts - 1 -

1)Ebiz is a centralized Tax management tools and eliminates pains of 11i (creating mulitiple codes)

Home Page

You can use the E-Business Tax Home page to manage access to all parts of the E-Business Tax system for setup and maintenance

Ebiz concepts - 2 -

Regime to Rate Flow

Ebiz concepts - 3 -

Self Guided Flow


Tax Tax
OU Tax
Ebiz concepts - 4 -

1)Tax Authority

Tax Authority (Central sales Autority of India)
A government entity that regulates tax law, administers, or audits one or more taxes.

Tax Regime (West Bengal CST Regime)
The set of tax regulations that determine the treatment of one or more taxes administered by a tax authority.
Examples of a tax regime include:
A sales and use tax in the United States includes rules for state, county, and city sales and use taxes.
An excise tax regime in India includes rules for excise tax and additional excise tax.
A VAT tax regime in Argentina includes rules for standard VAT, additional VAT, and perception VAT.

Ebiz concepts - 5 -

Tax (West Bengal sales tax)
A distinct charge imposed through a fiscal or tax authority.
Examples of a tax include VAT for the United Kingdom and TVA for France.
Tax Jurisdiction (State of West Bengal)
A geographical area where a tax is levied by a specific tax authority or where a specific tax rate applies.
Examples of tax jurisdictions include:
The tax jurisdiction for VAT in Germany is the country of Germany.
The tax jurisdiction for a San Jose city tax is the City of San Jose, California.
The tax jurisdiction for Provincial Goods and Services tax (PST) in Canada is a particular Province, such as Ontario or British
Tax Status (Standard, Reduced, 0%)
The taxable nature of a product or service in the context of a transaction for a tax type.
Examples of a tax status include taxable standard rate, zero rated, exempt, and non-taxable. A tax status is similar to the concept of the
tax type definition used within Payables and Receivables in releases prior to Release 12.
Tax Rate (4%)
The rate specified for a tax status in effect for a period of time. You can express the tax rate as a percentage or as a value per unit
An example of a tax rate is 7.5% for a state sales and use tax.
Recovery Rate
The rate of input tax that is allowed to be recovered or offset against output tax.
The recovery rate is applicable to VAT taxes. For example, organizations that only produce VAT applicable goods and services can
use 100% recovery rate on most purchases. Organizations that produce VAT exempt goods and services, for example, financial
institutions, have a 0% recovery rate.
Operating Unit Tax Accounts
The tax accounts that the system uses to post the tax amounts derived from your transactions. The tax accounts you define serve as
default accounting information for taxes, tax rates, tax jurisdictions, and tax recovery rates.

Tax Rules (7 Rules with seeded defaults)
Rule Engine - Rule Types
The E-Business Tax tax rules engine uses the Tax Determination process to identify the taxes that apply to a transaction and to
calculate the tax.
The E-Business Tax tax determination process is organized into rule types. Each rule type identifies a particular step in the
determination and calculation of taxes on transactions. You must either set up tax rules or provide a default value for each rule type in
order for the tax rules engine to determine and calculate taxes.
The steps in the Tax Determination process are:
1 Determine Applicable Tax Regimes and Candidate Taxes: This is a preliminary step used by E-Business Tax to determine tax
regimes and candidate taxes within each tax regime. This step identifies the first party of the transaction and the countries associated
Ebiz concepts - 6 -
with the transaction. For each country identified, the process selects the tax regimes that are associated with the first party and defined
for the country as candidate tax regimes. The process then selects the taxes defined for each candidate tax regime as candidate taxes.
2 Determine Place of Supply and Tax Jurisdiction: Determines the location where a transaction is considered to have taken place
for a specific tax, and the associated tax jurisdiction for each candidate tax. This step uses the Determine Place of Supply rule type.
For example, in Europe the default place of supply of goods for VAT is often Ship From, meaning the place of supply of a sale or
purchase within a European country is the country itself. In the US, the default place of supply for US Sales and Use is often Ship To,
meaning the state that is purchasing/receiving the goods.
3 Determine Tax Applicability: Determines the tax applicability of each candidate tax derived from the Determine Place of Supply
and Tax Jurisdiction process, and eliminates taxes that are found to be not applicable. This step uses the Determine Tax Applicability
rule type.
4 Determine Tax Registration: Determines the party whose tax registration is used for each tax on the transaction, and, if available,
derives the tax registration number. This step uses the Determine Tax Registration rule type.
Generally, the registration default is Bill From Party, but there are cases, like Reverse Charge or Self Assessment, where the default
becomes Bill To Party for specific transactions.
5 Determine Tax Status: Determines the tax status of each applicable tax on the transaction. This step uses the Determine Tax
Status rule type.
6 Determine Tax Rate: Determines the tax rate for each tax and tax status derived from the previous process. This step uses the
Determine Tax Rate rule type.
If applicable, the tax rate is modified by any exception rate and/or tax exemption that applies. The result of this process is a tax rate for
each applicable tax. The rate or rates are applied to the taxable basis in Step 8, Calculate Taxes.
7 Determine Taxable Basis: Determines the taxable base amount or quantity upon which to apply the tax rate for each applicable
tax. This step uses the Determine Taxable Basis rule type.
The taxable basis is typically the transaction line amount. E-Business Tax provides the default taxable basis formula taxable basis =
line amount. In some cases, the taxable basis either can include another tax or is based on the tax amount of another tax. You can set
up special taxable basis formulas to manage these requirements.
8 Calculate Taxes: Calculates the tax amount for each applicable tax on the transaction. This step uses the Calculate Tax Amounts
rule type.
The tax is typically determined by applying the tax rate to the line amount. E-Business Tax provides the default tax calculation
formula tax amount = taxable basis * tax rate. In some exceptional cases, adding or subtracting another tax alters the tax amount. You
can set up special tax calculation formulas to manage these requirements.
Tax Recovery Rate: Determines the recovery rate on Procure to Pay transactions to apply to each recovery type for each applicable
tax on the transaction (Determine Recovery Rate rule type).
Tax recovery is a separate process with its own set of steps, for taxes that allow for full or partial recovery of the tax amount. See:
Oracle E-Business Tax: Tax Recovery for more information.
Direct Tax Rate Determination: This is a special tax rule type that lets you specify the results of tax applicability, tax status, and tax
rate for a given tax. You use this rule type with migrated tax data and the Release 11i tax model in E-Business Tax. See: Oracle E-
Business Tax: Appendix A: Managing Migrated Tax Data for more information.
Ebiz concepts - 7 -
Tax exemptions Vs tax Execptions
Expert (3steps) Vs Guided rules (5steps)
Tax Determination Factor Set (Evaulates the factors for evaulating the tax rule)
Tax Condition Set (Identifies the condition from one or the factors/factor set to make sure that the conditions are statisfied in oreder to
evulate the tax)
Other Factor

11 & 12

Ch 10

Ch 7 to 9

Ch 4 to 6

Ch1to 3

Meta Data
& Rules
Single Data Model

Party Place Process Product
Place of
n Recovery
Taxable Basis
Repository, Reports, KPIs, Dashboards .
Ebiz concepts - 8 -
About Setting Up Product Fiscal Classifications
Set up product fiscal classifications to classify products that have a tax requirement for tax determination or tax reporting
purposes. You set up product fiscal classifications according to the taxable nature of a product or product transaction, as
designated by a tax authority.
You can set up product fiscal classifications for:
Oracle Inventory category set
E-Business Tax product category (non-Inventory based)
Product intended use (Inventory based or non-Inventory based)
You can also set up product tax exceptions to apply special tax rates to products. See: Setting Up Tax Exceptions for
more information.
Before you can set up product fiscal classifications, you may need to complete one or more of these tasks:
Set up Inventory items and categories for product fiscal classifications. (mandatory, for Oracle Inventory)
Set up tax regimes. (mandatory)
Set up tax reporting types. (optional)
Setting Up Inventory Based Product Fiscal Classifications or Non Inevntory based Ficasl
You can also set up Intended Product Classfication or Execptions
Transaction Business Categories

Transaction Fiscal


User Defined

Event Class

Ebiz concepts - 9 -

Chapter4(Party Tax Profiles)

1) Party Tax Profile is a Central repository of all Party Releated information that partcipate in tax transactions. The Party tax
profiles are Legal entity/Establishment/tax authority/3
Party Sites.
Party Profile Legal/establifment:It carrries all Registration details/Reporting Codes/Fiscal classifications
Operating Unit Profile: All 11i Migrated data will be here. We have to create tax setup specfic to each Ou/Le/Cross
Tax Authority: This Profile identifies the collecting or Reporting Tax authority. A collecting tax authority manages
all the administration of tax remittances/A reporting tax authority receives and proccess all company Transaction
tax reports
Thrid party Profile Setup tax profiles for suppliers/customers or their sites for exemption/execption

Chapter5 (Configuration Owners)
Configruation owner determines the factors (4p) to be involved in evaulating the tax (Global/Legal entity/Operating unit)
Configruation options (Common/Common with party override/Party specific)

Chapter 6(Fiscal Classfications)
Fiscal Classifications Provides tax determination values where the 4P are involved.
You set up Specific fiscal Classfication codes to create P specfic Factor Determination /Conditions or Sets
Eg Different rate for Product Car

Chapter7 Setting tax rules
Explains the 7 rules that the syetem uses in tax rules page Regime to rate (page 9 & 10 of Chapter 7 Imp)
Tax Simulator
Tax rules (Guided Rules 5 step process)

Chapter 8Setting Rules
The Rule Engine Creates a rule for a each combination of Configuration Owner/Tax regime/tax
You create tax rules by Translating the regulations of the Tax Authority By Determining Factors and Tax conditions set

Ebiz concepts - 10 -