E-Business Tax Purchasing Whitepaper1

E-business Tax – A Purchasing
Perspective
An Oracle White Paper
Oct 2007
E-business Tax – A Purchasing Perspective
Purpose ................................................................................................. 3
Overview ............................................................................................... 3
Prior Tax Structure ................................................................................ 4
Key Concepts ........................................................................................ 6
Integration With Purchasing ................................................................. 8
Tax Events ......................................................................................... 8
Configuration Owner Tax Options .................................................... 8
Party Tax Profile ................................................................................ 9
Implementation Considerations ................................................. 10
Country Defaults ............................................................................. 11
Tax Defaulting ................................................................................. 12
Displaying Tax Information ............................................................. 13
Modifying Tax Information ............................................................. 14
Overriding Tax............................................................................. 14
Application Tax Options - Tax Hierarchy ........................................ 15
Supplier ....................................................................................... 16
Supplier Site ................................................................................ 16
Item ............................................................................................. 16
Tax Rules ......................................................................................... 17
Expert Rule .................................................................................. 18
Guided Rule ................................................................................ 18
Fiscal Classification ......................................................................... 20
Party Fiscal Classification ............................................................ 20
Product Fiscal Classification........................................................ 23
Transaction Fiscal Classification ................................................. 31
Tax in Interface ............................................................................... 32
Requisition Import ...................................................................... 32
PDOI ............................................................................................ 32
Tax During AutoCreate ................................................................... 32
Quantity Based Tax ......................................................................... 32
Tax Setup ............................................................................................ 34
Upgrade considerations...................................................................... 39
Data Flow ............................................................................................ 41
Troubleshooting.................................................................................. 43
Tax Simulator .............................................................................. 43
Troubleshooting Tips .................................................................. 43
Tax Log and File Versions ............................................................ 44
Appendix ............................................................................................. 46
E-business Tax – A Purchasing Perspective Page 2
References ...................................................................................... 46
Oracle Internal References ............................................................. 47
Tax Determination Attributes ......................................................... 47
Ebusiness Tax provides a repository to store Tax to create/update/display tax information for its transactions. The tax
tax information and record tax events.
services that can be availed from Ebusiness Tax are listed below.
Individual applications (for e.g.
Purchasing) avails the tax services provided by
Ebusiness Tax to create/update/display tax
information for its transactions. a. Define Tax Content
E-business Tax – A b. Determine Tax
Purchasing c. Manage Tax

d. Record Tax
Perspective
e. Report Tax
f. Reconcile Tax
Architecture has been built considering country specific tax requirements and
applicability of rules for determining taxes. Based on the tax laws of a specific
country, the transaction tax rates may vary by jurisdictions, products or product
PURPOSE category, how the product will be used, type of transacting parties, type of
transactions, the place of supply etc. Various rules are applicable for
Purpose of creating this
determining the appropriate tax on a specific transaction.
document is to review impact
of Ebusiness Tax introduced in
R12 to Oracle Purchasing. This
document will help you in
implementing tax solution in
Purchasing using R12 Ebusiness
Tax solutions. This document
will also help you in
understanding the integration
and troubleshooting your tax
setups in Oracle Purchasing.
OVERVIEW
In release 12 EBusiness Tax has
been introduced to provide an
improved Tax solution to
customers.
Ebusiness Tax provides a
repository to store tax
information and record tax
events.
Individual applications (for e.g.
Purchasing) avails the tax
services provided by Ebusiness

NOTE: In the images below and/or the attached document, user details / company
name / address / email / telephone number represent a fictitious sample (based
upon made up data used in the Oracle Demo Vision instance). Any similarity to
actual persons, living or dead, is purely coincidental and not intended in any
manner.
The Tax Setups including rules are based on requirements used by the Tax Rules
Engine, which will create/update Tax Lines. These lines are later reported using
EBusiness Tax Reporting features. Figure below shows the e-business structure.
Prior to release 12, tax was defined in module. A tax component on the document total could be associated with the
Accounts Payables module. Taxes were
purchasing documents for portion of the tax which was non recoverable.
associated with rates, non-recoverable ratio
and recovery rules. Country Specific tax
Purchasing would default taxes based on hierarchy defined either in Oracle
requirements could not be incorporated
Payables (Setup > Options > Payables > Tax code defaults) or in Oracle
seamlessly into the application. Purchasing (Setup > Organization > Purchasing Options > Tax Default Alternate
Figure 1: E-Business Tax Region) if "Enforce Tax From Purchase Order" box in Payable Options (Setup >
Architecture Options > Payables > Tax code defaults) was checked.
Taxes were associated with rates, non-recoverable ratio and recovery rules.
Taxes were then defined in at least one of the levels (also called the tax source)
for e.g. Item, Supplier, Supplier Site, and Location etc. The order of defaulting
PRIOR TAX STRUCTURE
was decided by the hierarchy defined in the Payables/Purchasing options
Prior to release 12, tax was discussed previously. Tax calculation was called on a Requisition/ Standard
defined in Accounts Payables Purchase order or a Blanket release based on the hierarchy, recovery rules and

rates. Tax calculation is Engine, which was called from the distribution, or
performed using the AP Tax
PO/Requisition. Once the tax is defaulted and saved tax cannot be redefaulted
even on changing the tax source in the document.
It was possible to override the tax defaulted on Purchasing documents prior to
receipt or prior to reservation on funds on the document incase of
encumbrance accounting. To override tax we need to have the profile option
Tax: Allow Override of Tax Code set to Yes. Profile "Tax: Allow Override of
Recovery Rate" allows override of recovery rate if the values of this profile is
set to "Yes".
Due to complexity of the tax specifications based on country/product, Oracle
used to provide certain country/product specific solutions for diverse tax
related requirements. (For e.g. Latin Tax Engine in GTE, Brazil AP/PO Tax
Engine, India R11i localizations)
E-business tax design was completely new for release 12. Most of the features
available in 11i have been accommodated in release 12 e-business tax.
Following are some of the features that will not be available in release 12 e-
business tax as compared the 11i features:
1. Tax Code is removed from the ‘Enter Purchase Order’ form. Instead tax
classification field will be available in tax page available through
‘Manage Tax’ link. Users can no longer make a purchase order
shipment nontaxable by removing the tax code from the PO shipment.
2. Recovery Rate field at the distributions level will no longer be
defaulted based on the Tax Code and will no longer display the default
recovery rate of the transaction. Override of recovery rate will be
subject to controls setup within e-business tax.
3. User updated Tax Code on the requisition lines will no longer be
carried over to the PO document during autocreate. The Tax
Classification will always be re-defaulted on the PO document.
4. Summarized tax information on purchase order has been eliminated.
Only detailed tax line can be viewed on the purchase order.
5. Tax Code cannot be populated through the purchase order Preferences
form.
6. Tax cannot be modified through AutoCreate requisition 'Modify'
action, as the tax is re-defaulted on the PO regardless of the tax in the
requisition.
7. Detailed tax information based on tax classification will not be
available in the requisition. For requisitions, users will only be able to
view the tax amounts (total, recoverable and non-recoverable).

8. Tax code has been removed from RFQs and Quotations form. Tax will
be defaulted when a quotation is autocreated to a standard purchase
order.
9. PO documents cannot be reserved or submitted for approval if tax
calculation error has occurred.
10. While importing documents in the interface with Authorization status
‘Approved’ using PDOI, a tax calculation error will result in creation of a
document with ‘Incomplete’ status or in updating of an already
‘Approved’ document to ‘Requires Reapproval’ status, if the ‘Initiate
Approval’ parameter was set to ‘Yes’.
11. Tax calculation error in Requisition Import will create imported
requisitions with interface authorization status in ‘Approved’ status as
‘Incomplete’.
12. Withholding tax will no longer be supported. Withholding Tax does not
affect any taxes that organizations owe the tax authority, so there is no
significance to the organization’s accounts/budgeting. It serves more
as a way to direct payment of portion of the taxes already owed.
KEY CONCEPTS
Following are some of the key concepts in eBusiness tax as provided by this
product. This will be used further in this discussion.
Tax Regime: A Tax Regime contains the set of tax rules that determine the
treatment of one or more taxes that have been grouped together for
administration or other purposes.
For e.g. VAT Regime in Argentina that sets the rules for Standard VAT,
Additional
VAT, and Perception VAT and US Sales Tax Regime in US with State, County and
City/District taxes.
Tax: A classification of a charge imposed by a government through a fiscal or

tax authority.
For e.g.: Standard VAT, Additional VAT, and Perception VAT in Argentina and
State, County and City/District sales/use taxes in US
Tax Status: Tax Status is the taxable nature of a product or service in the
context of a transaction for a tax.
For e.g. Zero Rated, Standard Rated etc.

Tax Rate: The rate specified for a tax status in effect for a period of time; the
tax rate can be expressed as a percentage or as a value per unit quantity.
For e.g. Sweden Standard Rate VAT is 25% or US California State Sales/Use Tax
Standard Rate is 7.25%
Tax Jurisdiction: A geographic area where a tax is levied by a specific tax

authority.
For e.g. The Jurisdiction for the US California County Sales Tax for Imperial
County is Imperial County.
Party Tax Profile: Holds all party tax related information. For e.g. Party Profile
for Establishments, Party Profile for Suppliers and Sites or Party Profile for
Customers and Sites.
Registrations: The registration of a party with a tax authority that confers tax
rights and imposes certain obligations. For e.g. ESA78211646 (VAT - Spain),
SE123456789012 (VAT - Sweden) etc.
Fiscal Classifications : Provides for the definition of tax fiscal classifications. A

fiscal classification is a way that a tax authority classifies each part of a
transaction.
Party Fiscal Classifications: A classification used by a tax authority to categorize

a party for a tax. For e.g. Brazil Establishment Type (e.g. Commercial, Industrial,
Manufacturing)
Product Fiscal Classifications: A classification used by a tax authority to

categorize a product for a tax. For e.g. Brazil Product Nature (e.g. electronic
goods, dairy goods, professional fees, non-professional fees)
Intended Use Fiscal Classifications: The purpose for which a product may be
used. For e.g. Brazil Intended Use (e.g. Commercialization, Consumption,
Industrialization)
User defined Fiscal Classifications: A user defined Transaction Fiscal

Classification Type.

Document Fiscal Classifications: A classification used by a tax authority to
categorize the documents associated with a transaction for a tax.
Fiscal Classifications: Transaction Business Category: A business classification

used by Oracle to identify and categorize an external transaction into a Tax
transaction.
Based on similarity in handling tax information Tax recalculation will be supported on a PO shipment line has been
and tax determination tax events are classified
received/accrued or matched to invoice provided retroactive pricing is enabled.
based on purchasing document types.
INTEGRATION WITH PURCHASING In Purchase Orders/Releases, tax is calculated at the PO shipment level and
distributed to recoverable and non-recoverable components that determine tax
There are a few fields on
amount at the PO distribution level. In requisitions, tax will be defaulted based
purchasing documents, which
on the tax setups in eTax and cannot be overridden. The requisition line and
determine application of a tax.
These 'Tax determination distribution will have the summary tax amount(total, recoverable and
nonrecoverable). The tax is calculated in e-business tax by calling e-business Tax
attributes' on purchasing
documents are used to calculate services and stored in e-business tax repository as mentioned in the 'Overview
of EBusiness Tax Architecture in R12' section in this article.
the applicable taxes on the
transaction. These attributes,
Tax Events
along with ‘Additional Tax
Attributes’ for e.g. Intended Use, Tax events are classified in purchasing based on the purchasing document
Product Fiscal Classification types. Following are the event classes in purchasing.
(Seen on the ‘Additional Tax Purchase and Internal Requisition (REQUISITION)
Information’ Page) and other
internal factors determine the Purchase Orders and Agreements (PO_PA)
calculation of tax. Tax calculation Blanket and Scheduled Release (RELEASE)
is initiated on creation
(saving/importing) of the The above event classes are based on the consideration of whether any tax
purchasing document. Tax is determination is necessary and the similarity in the handling of the tax
recalculated if there are any information.
changes that affect the tax
Configuration Owner Tax Options
calculation. Tax will be calculated
by calling tax services available The event class is associated with a first party legal entity/operating unit owning
through ebusiness tax at the tax content. Tax configurations can subscribe to the event class and additional
following events: options available based on each application using the ‘Configuration Owner Tax
Options’. At transaction time, e-business Tax uses the tax option settings of the
1. Document creation and
configuration owner and application event class instead of the default settings.
update (Requisitions, POs,
Therefore it is necessary that the available options (for update) through
Releases)
configuration owner tax options and defaulting rule should both be set with the
2. Receipt transactions (Charges) same value for the option to
take effect. For purchasing application only the following option is available for
updating.

1. Allow Tax
Applicability 2. Offset Tax
Basis
Figure 2: Configuration Tax Owner Option
Other options are not updatable for purchasing application and will not
available.
This will be the standard behavior in release 12.
By default the ‘Regime Determination Set’ is ‘Determine Applicable Regimes’
which uses the location based taxes. For migrated tax, using ‘Direct Tax Rate
Determination’ with tax classification codes, configuration owner tax options
must be setup to use STCC as the regime determination set.
Party Tax Profile

This is a centralized repository that holds information related to parties
involved in tax transaction. It is important for the party definitions to exist in
party tax profile so that it can be used in the tax transactions with e-business
tax. A parties involved in e-business tax is classified into four types:
1. First Party Legal Entity: An entity identified though registration with a
legal authority within a jurisdiction. This entity has rights to enter into
transactions with other parties, own property and incur debt. One of
the responsibilities of this entity is to pay and report tax liabilities to
the legal authority.
2. First Party Legal Establishment: Legal establishments (also called
branch, division, inventory organization or physical location) are

building blocks of a legal entity. A legal entity is made up of at least
one legal establishment. When a legal entity is created, an
establishment is automatically linked to it. This is called the main
establishment of the legal entity. You may need to create additional
establishments based on registrations required within local level
jurisdiction. Local level jurisdictions can have separate tax
requirements for the establishments registered under it. E-business tax
rules identify tax registration status of legal establishments involved in
a transaction and through Party Tax Profile.
3. Operating Unit Owning Tax Content: This option allows you to enter
and maintain tax content for an operating unit. In releases prior to R12,
the tax content was owned by Payables, Receivables and other
applications that had data stripped by operating unit. Upon upgrade
the tax is migrated to ebusiness tax as operating unit owning tax
content.
4. Third Party: External parties involved in a transaction are third party to
tax configuration owners for e.g. supplier for purchasing business
transactions.
5. Third Party Site: For e.g. supplier site for purchasing business
transactions. Third party can operate from multiple sites. Tax
calculation can differ based on the location of the site.
6. Tax Authority: A government entity that regulates tax law, administers,
and/or audits one or more taxes. A tax authority promulgates a set of
tax rules and regulations, for taxes under a given tax regime. The tax
authority party tax profile identifies a tax authority party as a collecting
authority and/or a reporting authority. A collecting tax authority
manages the administration of tax remittances. A reporting tax
authority receives and processes all company transaction tax reports.
Implementation Considerations
1. It is necessary to associate a first party legal entity and its main legal
establishment in party tax profiles. In case they have not been
associated a tax calculation error will result while saving the
transaction. To create a new first party legal entity / legal
establishment, query the legal entity and choose the party type as first
party legal entity or first party legal establishment for legal entity and
legal establish respectively. Click on the icon under the label titled
‘Create Tax Profile’. Now follow the instructions under chapter
‘Managing Tax Profiles and Registrations’ in Oracle E-Business Tax User
Guide to create a new tax profile for both the legal entity and its main
legal establishment.

2. If you had been using tax configurations defined under the ‘Operating
Unit Owning Tax Content’, then tax content defined under the ‘First
Party
Legal Entity’ will not be applicable. You may choose to use the tax content
of its associated legal entity. To start using tax defined for the legal
entity, navigate to party tax profile page and choose the party type as
‘Operating Unit Owning Tax Content’ and query the operating unit
concerned. Click on the icon under the label titled ‘Update Tax Profile’.
Check the ‘Use Subscription of the Legal Entity’ box and save the party
tax profile. After setting this checkbox, all tax content subscribed to
‘Operating Unit Owning Tax Content’ will no longer be applicable. In
order to use tax regimes subscribed under ‘Operating Unit Owning Tax
Content’, add the ‘First Party Legal Entity’ to the regimes party
subscription.
Warning: Checking the ‘Use Subscription of the Legal Entity’ box for the
‘Operating Unit Owning Tax Content’ is an irreversible setting. Once
you associate the operating unit with its legal entity, you cannot
update the operating unit tax profile or maintain separate tax content
for this operating unit.
3. Before using the third party tax profiles, it is necessary to set up the
party / party site. You can create / update the third party information
from the e-business tax page. Please follow the instructions under
chapter ‘Managing Tax Profiles and Registrations’ in Oracle E-Business
Tax User Guide to create a third party tax profile.
Country Defaults
Country default controls let you default the transaction tax-related values in
the countries that you do business. You can also setup the default ‘Tax
Authority’ for the country. You can default tax regime and tax for tax
registrations belonging to the legal establishment in the applicable country by
choosing the option against the tax regime or tax you entered as the default
tax. For more details about this option, please refer to the Oracle E-Business
Tax User Guide.
Purchase documents call the eTax services for

tax calculation every time the purchase order is
saved regardless of the taxability of the
document line/schedule/distribution.

if there are no tax definitions available in tax repository. Therefore ebusiness
tax determines the tax applicability and purchasing only controls calls to the
eBTax services. The eTax API is called to avail the eBTax services to calculate
the tax applicability. Once the purchase document is saved the Manage Tax
menu is enabled.
When saving the purchase document, if there are tax calculation errors in
ebusiness tax, a message will be displayed to the user. Subsequently, the tax
lines will not be defaulted. Following is the error message that appears.
An error occurred during Tax Calculation. Please correct

the problem or contact your System Administrator. Your
transactions have been saved. Tax will be recalculated
when the document is submitted for Approval.
Tax information will be displayed only after the purchase document is saved. The ‘Manage Tax’ link is enabled, which
navigates to a web page where the tax details can be viewed.
The tax will be recalculated on submission for approval. If the tax calculation is
still erroring the document cannot be submitted for approval. The following
Figure 3: Country Defaults error message will be display on clicking the 'Approve' button.
Tax Defaulting
Error Messages: Unexpected error occurred during Tax
Regardless of the availability of Calculation Exception: xxx - An unexpected error has occurred.
tax definitions in e-business tax, Please contact your system administrator.
Purchase documents call the Please correct the problem or contact your System
eTax services for tax calculation Administrator.
on saving the purchase
documents For troubleshooting the tax setups, please refer the troubleshooting section of
(Requisition/PO/Releases). If this article.
calculation results in applicable
tax lines, then these tax lines are
defaulted on the purchase Steps:
document. Tax calculation is
based on the values of the 'Tax 1. Setup Ebusiness tax.
determination attributes' along 2. Enter the purchase document details.(PO/Release/Requisition)
with the ‘Additional Tax
3. Save the purchase document (PO/Release/Requisition)
Attributes’ on purchasing
documents. The 'Tax
determination attributes', and
‘Additional Tax Attribute’
available on both purchase
order and requisitions are
available in the ‘Appendix’
section below. The purchase
documents makes a call to eTax
services for tax calculation even

Figure 4: Manage Tax link on purchase order entry form
Displaying Tax Information

Tax information will be displayed only after the purchase document is saved.
The 'Manage Tax' link on the toolbar of the purchase document will be enabled
on saving the purchase document and the users can navigate to the "Tax" page
where defaulted tax information can be viewed. This page has the following
two tabs for PO/Releases.
1. Schedules
2. Distributions
The above tabs will display the tax line details for each shipment in the
Schedules tab and non-recoverable and recoverable tax distributions for each
distribution in the distributions tab.
The Tax page will have the following tabs for requisition.
1. Lines
2. Distributions
If there are no taxes applicable for the purchase document the Manage Tax
menu will still be enabled. There will be no tax lines seen on expanding the
'Details' in the 'Schedules Tab' of this 'Tax' page.

Also the taxability of a shipment (schedule) can be seen from the purchase
order summary (Shipment window > Taxable flag can be added to the ‘Folder
View’). This is no longer available in the ‘Enter Purchase Order’ screen as seen
in releases prior to R12. In other places, if the tax is applied on the purchase
order then the details of the tax on schedule / distributions are available
through the ‘Manage Tax’ link.
We can no longer make a shipment as non-taxable by setting the tax
classification to NULL in ebusiness tax. Overriding the defaulted tax with a
zero-rated tax classification is intended to minimize regression due to non-
availability of this functionality.
Tax code details and recovery rate cannot be viewed from the Purchase Order
Summary/Requisition Summary form. In purchase order summary form
‘Taxable Flag’ will be displayed. This is the only place where we can find the
‘Taxable Flag’ unlike the previous versions where they could be viewed from
the distributions and purchase order entry form. Manage Tax is available as a
drop down in the ‘Professional Buyer’s Workcenter’.
Defaulted Tax information can be overridden in Figure 5: Purchase Order Tax Page Steps:
purchase orders and releases. Tax line can be
manually added to the purchase 1. Query the purchase document or save the purchase document (Enter
orders/releases even if they have not been Purchase Order (POXPOEPO)/Enter Releases (POXPOERL))
defaulted.
2. Click on Actions > Manage Tax from the toolbar from Enter Purchase
Order (POXPOEPO)/Enter Releases (POXPOERL) forms and Tools > Manage Tax
for Requisition Entry (POXRQERQ) form.
Modifying Tax Information
Overriding Tax
Override behaviour will be governed e-business tax as described in Note

458218.1.
There is a ‘Additional Tax Information’ button available from the ‘Manage
Tax’ page. This link is available after saving the purchase document. If there
is a tax calculation error while saving the purchase documents, the
additional tax information page will be greyed out and the tax cannot be
overridden in such a case.

Figure 6: Additional Tax Information Page
Steps:
1. Query the purchase document (Purchase Order Summary/Requisition
Summary form) or save the purchase document (Enter Purchase Order
(POXPOEPO)/Enter Releases (POXPOERL))
2. Click on Actions > Manage Tax (Tools > Manage Tax for Requisition) from
the toolbar from Purchase Order Summary/Requisition Summary/Enter
Purchase Order (POXPOEPO)/Enter Releases (POXPOERL) forms.
3. The tax page will appear with details of tax lines. Click on the 'Additional
Tax Information' button.
4. Locate the tax classification field. This field will have the existing tax
classification for each tax line. Choose the new tax from the LOV.
5. Click on Apply and this will navigate you back to the manage tax page.
This page will have the new tax calculation based on the new tax
classification rate.
The tax hierarchy is now available in ebusiness tax either in payable options or in purchasing options, which would determine the
through ‘Application Tax Options’ available by
source and the order of defaulting on purchase orders. The tax hierarchy is
each operating unit for Purchasing application.
now available in ebusiness tax through ‘Application Tax Options’ available by
This is similar to defining the tax hierarchy in
‘Purchasing Options’ prior to release 12.
each operating unit for Purchasing application. This is similar to defining the tax
Application Tax Options is available only for hierarchy in ‘Purchasing Options’ prior to release 12. The tax will be defaulted
backward compatibility of the former Tax based on the defaulting order and the source option specified. Application Tax
Defaulting Hierarchy. Options is available only for backward compatibility of the former Tax
Application Tax Options - Tax Defaulting Hierarchy. If you are using complex tax rules you may choose to
Hierarchy disable the application tax options. This is a one-time option. Once the
Prior to ebusiness tax, a tax application tax option has been disabled, it would not possible to re-enable this
hierarchy would be defined option again for that operating unit.

For purchasing application we
can choose up to the following 5
sources to default the tax.
1. Supplier
2. Supplier Site
3. Item
4. Ship-To Location
5. Payables Financial
Option
Figure 7: Application Tax Options
Supplier
You can attach tax to the supplier using the following steps.
1. In the tax page navigate to Parties > Party Tax Profiles.
2. Choose ‘Party Type’ as “Third Party” and query the Supplier in the
‘Party Name’ for whom you like to define the tax.
3. Click on update icon (Pencil icon).
4. In the Main Tab check on ‘Allow Tax Applicability’.
5. Check ‘Set for Self Assessment / Reverse Charge’ if this is a self-
assessed tax*.
6. Navigate to Tax Registrations tab and click on ‘Create’ button and add
the tax regimes/taxes applicable to the supplier.
* A self-assessed tax is a tax calculated and remitted for a transaction,
where tax was not levied but it is deemed as due.
Supplier Site
You can attach tax to the supplier site using the following steps.
1. In the tax page navigate to Parties > Party Tax Profiles.
2. Choose ‘Party Type’ as “Third Party Site” and query the Supplier (using
the ‘Party Name’ field) for whom you like to define the tax.
3. Choose the site for which you want to define the tax and click on
update icon (Pencil icon).
4. In the Main Tab check on ‘Allow Tax Applicability’.

5. Check ‘Set for Self Assessment / Reverse Charge’ if this is a self-
assessed tax*.
6. Navigate to Tax Registrations tab and click on ‘Create’ button and add
the tax regimes/taxes applicable to the supplier site.
* A self-assessed tax is a tax calculated and remitted for a transaction,
where tax was not levied but it is deemed as due.
Item
You can attach tax to the item using the following steps.
1. Navigate to Inventory/Purchasing Responsibility.
2. Navigate to Items > Master Items
3. Query the item for which you want to define the tax.
4. Navigate to the ‘Purchasing’ tab.
5. Choose ‘Yes’ from drop down for the ‘Taxable’ field.
6. Now choose the tax from ‘Input Tax Classification Code’ field LOV*.
Tax rules provide flexibility to use the tax as Tax Rules
required by the business / tax authority. The
User-friendly interface makes it easier for the
E-business tax provides flexibility to define all kinds of taxation rules that you
implementation team to configure rules based normally encounter in your business scenario. Tax engine requires some of the
on their requirements. mandatory tax rule types to be defined either by definining defaults available
* The tax will only be for these rule types, or by defining tax rules that will determine the value for
available in ‘Input Tax these mandatory tax rule types. If both are defined, the tax engine will first use
Classification Code’ field LOV the rule. In case the rule does not evaluate a value, the default for the tax rule
if the tax has been associated will be used. Rules can be defined even after the tax is live. Following are
with a ‘Tax Type’ in the tax mandatory tax rule types required before enabling the tax for transactions.
configuration for this tax prior Determine Place of Supply - The specific jurisdiction where the supply of goods
to enabling the tax. or services is deemed to have taken place for tax purposes, for a given tax; it is
The place of supply rule the result of the place of supply derivation.
determines the tax on the Determine Tax Applicability - The process and the data that identifies all the
ship-to location based on the taxes that need to be determined/levied for a given transaction; the result will
tax jurisdiction for the tax. be an ordered list of applicable taxes.
This is available though the
subscription owner profile in Determine Tax Registration - The registration of a party with a tax authority to
ebusiness tax. Tax for the ensure tax rights; responsibilities and rights are upheld.
Payables Financial Option can Determine Taxable Basis - The arrived at value, quantity or action, on which tax
be applied through the is calculated, after the tax rules which would affect it have been taken into
‘Application Tax Options’ consideration for a specific tax. These rules may include deductions,
where tax to be applied can modifications, exemptions and discounts.
be selected for this option.
Calculate Tax Amounts - The calculation of tax amount and formula to be used
for calculating this amount.

Figure 8: Tax Rules
There are 2 methods available to define a rule.
1. Expert Rule
2. Guided Rule
Expert Rule
The below steps will guide you through a step-by-step process to create a tax
rule using the expert rule. You can alternatively use the ‘Guided Rule Entry’
option to define tax rules.
For e.g. define applicability of tax only for ship to location as New York City
1. Go to responsibility 'Tax Managers'
2. Navigate to Advanced Setup Options > Tax Determining Factor Sets
3. Click on 'Create' button
4. Enter the following values
a. Tax Determining Factor Set: <Enter a code for your
Tax
Determining Factor Set>
b. Name: <Enter a name for your Tax Determining
Factor Set> 5. Set Usage: Tax Rules 6. Optionally Enter:
a. Regime Code: <Regime code where the rule will be applicable>
7. Scroll down to the 'Associate Tax Determining Factors' region.
8. Enter the following values
a. Determining Factor Class: <In our case it is
'Geography'>
b. Class Qualifier: <In our case it is 'Ship To'>

c. Determining Factor Name: <In our case it will
be 'City'>
9. Click on 'Apply' to save the 'Tax Determining Factor Set'
10. Navigate to Advanced Setup Options > Tax Condition Sets
11. Click on 'Create' button
12. Enter the following
a. Tax Condition Set: <Enter a code for 'Tax
Condition Set'>
b. Determining Factor Set: <Enter the value
from the LOV for the
'Tax Determining Factor Set' defined in step 4 above>
13. Click on 'Continue' button
14. We will see the 'Determining Factor Class', 'Class Qualifier' and
'Determining Factor Name' defaulted and greyed out
15. Enter the following values:
a. Operator: Not Equal To
b. Value/From Range: NEW YORK
16. Click on 'Finish' button.
17. Query the tax in the Tax Configuration > Tax Rules page
18. Click on Expert Rule Entry icon against the ‘Determine Tax Applicability’
rule.
19. Enter the following values:
a. Rule Code: <Enter a Rule Code>
b. Name: <Enter a Rule Code>
c. Effective From: <Enter the effective date for
this rule>
d. Determining Factor Set Code: <Choose the
'Determining Factor Set Code' defined in step 4 above from the
LOV> 20. Click on Next to complete Step 1 of 3 21. Enter the
following details:
a. Condition Set Code: <Select the 'Tax Condition Set' defined in
step 12 above from the LOV>
b. Result: <for our case the value is 'Not Applicable'>
22. Click on Next to complete Step 2 of 3
23. Enter the value of Rule Order and check the 'Enable' checkbox
24. Click on 'Finish' to create the rule.
Guided Rule
You can also use the Guided Rule entry to define the rules for each tax. This
step guides you through a step-by-step process to create a tax rule. You can
alternatively use the ‘Expert Rule Entry’ option to define tax rules.
For e.g. define applicability of tax only for ship to location as New York City
1. Query the tax in the Tax Configuration > Tax Rules page

2. Click on Guided Rule Entry icon against the ‘Determine Tax
Applicability’ rule.
3. Provide a name for the tax rule code and the effectivity.
4. You can choose to apply this rule for all transactions or only for
specific transactions.
Fiscal Classification allows you a way to classify equal to New York the tax is ‘Not Applicable’.
each part of your transaction and define tax
rules based on these classifications. E-business 11. Click on Next and choose Enable to apply this rule.
tax allows you classifications based on party,
product and nature of transaction.
5. Click on Enable and the

click on ‘Next’ button. Fiscal Classification
6. In the ‘Transactions’ tab As already defined ‘Key Concepts’ section, Fiscal Classification is a way that tax
enter the details for the authority classifies each part of a transaction. It is not necessary to define fiscal
location. In our case it classification to setup taxes in e-business tax. It only allows you to classify each
will be New York. part of a transaction so that you may create rules based on them for specific
tax requirements. We can model three types of fiscal classification in e-
7. Also choose the business tax.
operations. For e.g.
equal to/not equal to. In 1. Parties involved in the transaction - Party Fiscal Classification
our case choose not 2. Products involved in the transaction - Product Fiscal Classification
equal to. 3. Nature of the transaction - Transaction Fiscal Classification
8. Click on ‘Next’ button.

Party Fiscal Classification
9. Enter the condition set
The classification is used to categorize parties. For example a tax authority
code and the order of
could claim a reduced tax rate for transaction in which the goods are purchased
preference for this rule.
from a supplier establishment that have been classified as ‘Research and
10. Choose the result for the Development’ organization by the tax authority in order to promote research
rule and its operation. In activities.
our case the rule
Steps:
combined with operation
was: If Ship To not equal The below is an example of defining a rule for party fiscal classification for the
to New York. The result above mentioned example:
for this rule is that tax
1. Define Party Classification in TCA
will not be applicable in
a. Go to responsibility ‘Trading Community Manager’
such a case. So choose
b. Navigate to Trading Community > Administration >
the option ‘Not
Classifications
Applicable’. So the rule
c. Click on ‘Create Class Category’ button.
becomes: If Ship To not
d. Enter the following details
i. Class Category Name: <Enter a name for you
party classifications>
ii. Meaning: <Enter the name for meaning of your
party classification>

iii. Description: <Enter the description for your party
classification>
e. Click on ‘Apply and Create Class Codes’
f. Enter the value for Class Code, Meaning and Description
(Description is optional) by which you would like to define
your supplier establishment. For this example the
following needs to be entered to define a party
classification of type ‘Research and Development’:
i. Class Code: Research and Development
ii. Meaning: Research and Development
iii. Description: Research and Development
g. Click on ‘Apply’ button.
h. Click on Compile and this would submit concurrent
program to define your party classification in TCA. (This
step also returns the concurrent request id submitted for
definition to take effect).
i. Click on ‘OK’.
2. Create Fiscal Classification for the party in e-business tax

a. Go to responsibility ‘Tax Managers’
b. Navigate to Parties > Party Classification
c. Click on ‘Create’ button.
d. Party Classification: <Choose the ‘Party Classification’
defined in TCA during step 1 above>
e. Fiscal Classification Type Code: <Define a code for your
party fiscal classification code>
f. Name: <Define a name for your party fiscal classification
code>
g. Effective From: <Enter the effective date>
h. In the Tax regimes define all regimes to which this party
fiscal classification will be applicable. Enter the following
details for each regime:
i. Regime Code
ii. Effective From
i. Click on ‘Apply’ to save the party fiscal classification.

Figure 9: Party Fiscal Classification
Figure 10: Party Fiscal Classification (Supplier Type)
3. Attach the Party Fiscal Classification to the party in PTP (Party Tax
Profile)
a. Go to responsibility ‘Tax Managers’
b. Navigate to Parties > Party Tax Profiles
c. Select the party type and party from the LOV and click on
‘Go’. In our case choose Party Type as ‘Third Party’ and
Party as the supplier that needs to be defined as a
‘Research and Development’ type organization.
d. Click on Update pencil icon.
e. Navigate to the ‘Classifications’ tab.

f. Click on button ‘Add Another Row’.
g. Choose the ‘Fiscal Classification Type Code’ defined step 2
above from the LOV.
h. Choose the ‘Fiscal Classification Code’ for the supplier
based on the available codes defined in TCA. In our
example the supplier ‘Fiscal Classification Code’ is
‘Research and Development’.
i. Click on ‘Apply’ to save the party tax profile.
4. Create a new tax status and tax rate. (Follow steps 3, 5 and optionally
6 in-case recovery is required in the section ‘TAX SETUP’ below)
5. Create an Expert / Guided Rule as shown in the ‘Tax Rules’ section
above. Please use the following specification to create the rule.
a. Tax Determining Factor Set
i. Determining Factor Class: Party Fiscal
Classification
ii. Class Qualifier: Ship From Party
iii. Determining Factor Name: <'Fiscal
Classification
Type Code' defined in step 3 above>
b. Tax Condition Sets
i. Operator: Equal To
ii. Value/From Range: <In our case 'Research
and
Development'>
c. Tax Status: <Defined in step 4>
d. Tax Rate: < Defined in step 4>
Therefore the rule becomes:
When Ship From Party has a Party Fiscal Classification Value of ‘Research and
Development’ then apply the tax rate defined in step 4 above.
Product Fiscal Classification
The classification is used to categorize a product. There are three types of

product classification available in e-business tax.
1. Inventory Based
2. Non-Inventory Based
3. Intended Use Classification
Inventory Based
This is used to classify categories defined in Oracle Inventory. This can only be
used if Oracle Inventory is in installed status. For example, all domestically
purchased items that are used as office supplies, will be sold at a lower rate.

Steps:
1. In Oracle Inventory define a category. For e.g. in our case we will
define a category called ‘Office Supplies’. (Please refer to the page 4-66
of Oracle Inventory User's Guide for steps to create an inventory
category)
2. Create a new category set and associate the category set with the
category created in step 1 above. In our example associate the
category defined in step 1 above to the Purchase Category Set (This is a
seeded category set available by default i.e. we will associate the
category ‘Office Supplies’ in the Purchasing Category Set. (Please refer
to the page 4-68 of Oracle Inventory User's Guide for steps to update
an inventory category to a category set)
3. Assign items to the category defined in step 1. For e.g. in our case we
will create an item ‘File 6x6’ which is a purchased item with the
category ‘Office Supplies’. (Please refer to the page 4-74 of Oracle
Inventory User's
Guide for Assigning Items to Categories and page 4-74 of Oracle
Inventory User's Guide for defining an item)
4. Define a ‘Product Fiscal Classification’ for the above category in
ebusiness tax.
a. Go to ‘Tax Managers’ responsibility.
b. Navigate to Products > Product Classifications
c. Click on ‘Create’ button to create a new ‘Product Fiscal
Classification’.
d. Inventory Category Set: <Choose the category set defined in
step
2 above>. In our example we need to choose Purchasing
(Purchasing Category Set) against which we have defined a
category ‘Office Supplies’.
e. Fiscal Classification Type Code: <Define a code for your
product fiscal classification >
f. Name: <Define a name for your product fiscal classification
code>
g. Effective From: <Enter the effective date>
h. In the Tax regimes define all regimes to which this product
fiscal classification will be applicable. Enter the following
details for each regime:
i. Regime Code
ii. Effective From
i. Click on ‘Apply’ to save the product fiscal classification.

Figure 11: Product Fiscal Classification (Inventory Based)
5. Create a new tax status and tax rate. (Follow steps 3, 5 and optionally 6
incase recovery is required in the section ‘TAX SETUP’ below)
e. Tax Determining Factor Set
i. Determining Factor Class: Product – Inventory
Linked ii. Determining Factor Name: <'Fiscal
Classification
Type Code' defined in step 4 above >
f. Tax Condition Sets
ii. Value/From Range: <In our case 'Office
Supplies'> (Please note the value of the
category segments are concatenated
without delimiters therefore query this
LOV with value of one of the segments
and use the category description to
choose the correct segment)
g. Tax Status: <Defined in step 5>
h. Tax Rate: < Defined in step 5>

7. Create a purchase order with category ‘Office Supplies’. The rate
should be one created in step 5 above.
Therefore the following rule will be applied:
If the category used in purchase order is ‘Office Supplies’ then apply the rate
used in step 5 above.
Non-Inventory Based
This is used to classify categories that are not defined in Oracle Inventory. The
advantage of such a classification is that, it can also be used if Oracle Inventory
is not in installed status. We will continue to use the above example we without
using Oracle inventory example, all purchased items that are used as stationary
materials for your office supplies, will be sold at a lower rate.
Steps:
1. Define a ‘Product Fiscal Classification’ for the non-inventory
category in e-business tax.
a. Go to ‘Tax Managers’ responsibility.
b. Navigate to Products > Product Classifications
c. Product Classification Source: From the drop down ensure to
choose Oracle E-Business Tax.
d. Click on ‘Go’ button.
e. This would retrieve the seeded fiscal classification type code:
PRODUCT_CATEGORY.
f. Click on the pencil icon below the ‘Update’ field of
PRODUCT_CATEGORY fiscal classification code, to update the
information in this category.
g. Click on ‘Create’ button to create a new category.
h. Enter the following details
i. Fiscal Classification Code: <Enter a code for the fiscal
classification which will be used as the category>. In our
example we will define it as ‘OFFICE_SUPPLIES’
ii. Name: <Enter a name for the fiscal classification
which will be used as the category>. In our example
we will
define it as ‘Office Supplies’
iii. Effective From: <Enter an effective date>
i. Click on ‘Apply’
j. You will now be able to view the ‘OFFICE_SUPPLIES’ under
‘PRODUCT_CATEGORY’. (If you are not able to view it. Click
the Next 5 arrow to check the entire list under
‘PRODUCT_CATEGORY’).

k. You may create sub categories by clicking on the ‘+’ icon under
‘Create Sub – Level’ heading. For example in our case we will
create a sub-category called ‘STATIONARIES’.
l. Enter the following details
i. Fiscal Classification Code: <Enter a code for the fiscal
classification which will be used as the sub-category>.
In our example we will define it as ‘STATIONARIES’
ii. Name: <Enter a name for the fiscal classification
which will be used as the sub-category>. In our
example we
will define it as ‘Stationeries’
iii. Effective From: <Enter an effective date>
m. Click on ‘Apply’
n. You will now be able to view the ‘STATIONARIES’ under
‘OFFICE_SUPPLIES’ category of ‘PRODUCT_CATEGORY’.
(If you are not able to view it. Click the Next 5 arrow to check
the entire list under ‘PRODUCT_CATEGORY’).
o. Click on ‘Apply’ to save the fiscal classification.
Figure 12: Product Fiscal Classification (Non-Inventory Based)
2. Create a new tax status and tax rate. (Follow steps 3, 5 and
optionally 6 incase recovery is required in the section ‘TAX
SETUP’ below)
3. Create an Expert / Guided Rule as shown in the ‘Tax Rules’
section above. Please use the following specification to create
the rule.

i. Determining Factor Class: Product – Non-Inventory
Linked ii. Determining Factor Name:
‘Product Category’
ii. Value/From Range: <In our case 'Office
Supplies/Stationeries'>
c. Tax Status: <Defined in step 5>
d. Tax Rate: < Defined in step 5>
4. Create a purchase order and save.
5. Click on the Actions > Manage Tax link from menu.
6. Click on ‘Additional Tax Information’ button.
7. Scroll to the ‘Product Classification’ field and choose the
product classification ‘Office Supplies/Stationeries’ from the
LOV.
8. Click on Apply and the new tax rate will be used based on the
rule created above.
If the ‘Product Classification’ field entered in additional tax information page

from the ‘Manage Tax’ link on the purchase order is ‘Office
Supplies/Stationeries ’ then apply the rate used in step 2 above.
Intended Use
This is used to classify transactions based on purpose for which a product

maybe used. There are two types of intended use.
1. Inventory Based
2. Non-Inventory Based
For upgraded instances intended use is always inventory based. For non-
upgrade customers this choice can be made only once.
Example of Intended Use can be recovery tax on alcohol is based on its use. If it
is used for ‘Industrial Manufacturing’, the recovery rate will be higher than
when it is used for direct ‘Retail Sale’. In this whitepaper we will discuss
example of inventory based ‘Intended Use’. The difference is that for inventory
based defaulting automatically occurs when we choose the inventory-based
items. While for noninventory based intended use, the Intended use must be
explicitly specified from the ‘Intended Use’ field seen from the ‘Additional Tax
Information’ page after navigating to the tax page though the ‘Manage Tax’

link. Also for non-inventory based intended use, the codes for ‘Intended Use’
must be created in e-business tax.
Steps:
1. In Oracle Inventory define categories for intended use. For e.g. in our
case we will define a category called ‘Industrial Use’ and ‘Retail Sales’.
(Please refer to the page 4-66 of Oracle Inventory User's Guide for
steps to create an inventory category)
2. Create a new category set and associate the category set with the
category created in step 1 above or use the default INTENDED_USE
category set. In our example associate the categories defined in step 1
above to the INTENDED_USE Category Set (This is a seeded category
set available by default i.e. we will associate the category ‘Industrial
Use’ and ‘Retail Sales’ in the INTENDED_USE Category Set. (Please refer
to the page 468 of Oracle Inventory User's Guide for steps to update an
inventory category to a category set)
Figure 13: Intended Use (Inventory Category)

3. Assign items to the categories defined in step 1. For e.g. in our case we
will create an item ‘Industrial Alcohol’ which is a purchased item with
the category ‘Industrial Use’. (Please refer to the page 4-74 of Oracle
Inventory User's Guide for Assigning Items to Categories and page 4-74
of Oracle Inventory User's Guide for defining an item)
Figure 14: Intended Use (Item Assignment)

4. Create a new recovery rate for your tax. (Follow step 6 in the section
‘TAX SETUP’ below)
i. Determining Factor Class: Transaction Input
Factor
ii. Determining Factor Name: Intended Use
ii. Value/From Range: <In our case ‘Industrial Use’>
(Please note the value of the category segments are
concatenated without delimiters therefore query this
LOV with value of one of the segments and use the
category description to choose the correct segment)
c. Tax Recovery Rate: < Defined in step 4>
6. Create a purchase order with category ‘Office Supplies’. The recovery
rate should be defaulted from the one created in step 4 above.
If the ‘Intended Use’ of the item in purchase order is ‘Industrial Use’ then apply
the recovery rate used in step 4 above.
Transaction Fiscal Classification
The classification is used to categorize transactions according to the

requirements of a tax authority. This is used when the nature of the transaction
itself determines the tax and the tax rate that applies. The ‘Transaction Fiscal
Classification’ must be entered manually from the ‘Additional Tax Information’
page (Purchase Orders >
Manage Tax > Click on ‘Additional Tax Information’ button). Three Types of
Transaction Fiscal Classification’ can be defined in e-business.
Transaction Business Category: To classify transactions based on the nature of
business. Seeded Transaction Business Categories
• Expense Report
• Purchase pre-payment transaction
• Purchase transaction
• Sales transaction
• Sales transaction adjustment
• Intercompany transaction
New categories can be created under the seeded categories.
Document Fiscal Classification: To classify based on the documents required /

the type of documents used for the transaction. For e.g. Export Sales

User Defined Fiscal Classification: Used for defining transaction based on any
other classifications from transaction other then the above mentioned. For e.g.
a sample sale may invite a lower tax. So users can define a user defined fiscal
classification of type ‘Sample Sales’ and create rules to define tax rates for such
a transaction.
. Tax information provided through the interface classification and recovery rate. Tax information provided through the interface
will be considered as an override and not
will be considered as an override and not defaulting information. Therefore it
defaulting information. If tax details are not
specified in the interface, then ebusiness tax will
should fulfill all the criteria for overriding a tax as mentioned in above under the
determine the appropriate tax classification and
heading ‘Modifying Tax Information’ (Overriding Tax). A new field TAX_NAME is
recovery rate. introduced in release 12. Tax classification can be provided for overriding the
tax line information. TAX_CODE_ID field is supported on the data import for
backward compatibility. If TAX_CODE_ID field based on the old AP tax codes is
specified, then the tax classification will be derived and passed on to ebusiness
tax.
PDOI
Tax classification can be provided in the PO_LINES_INTERFACE for overriding the

tax line information using the TAX_NAME. If the PO lines interface
(PO_LINES_INTERFACE) does not specify any tax details, then ebusiness tax will
determine the appropriate tax classification and recovery rate. TAXABLE_FLAG
will be used as an item attribute for item creation in Oracle Inventory to update
the taxability of the item. However, taxable flag on the PO document
transaction table, which will be derived based on the existence of tax lines on
the shipment and will not be affected by the TAXABLE_FLAG provided in the
interface.
Tax During AutoCreate

During AutoCreate the tax will be redefaulted on the purchase order based on
the tax determining attributes of the purchase order. Tax overridden on the
During AutoCreate the tax will be redefaulted on requisition will no longer be passed to the purchase order, unlike the
the purchase order based on the tax determining functionality prior to release 12. Tax will not be part of shipment grouping
attributes of the purchase order. Tax overridden criteria so it is possible to have requisition lines with different tax values being
on the requisition will no longer be passed to the
grouped into a single PO shipment. Tax will be recalculated on the PO document
purchase order, as was the functionality prior to
release 12.
created through autocreate.
Tax in Interface
Requisition Import
Quantity Based Tax
If the requisition lines interface One of the features of e-business tax for purchasing is the capability to define
(PO_REQUISITIONS_INTERFACE_A tax on the basis of quantity instead of the Line amount. In order to define tax
LL) does not specify any tax based on quantity we can follow the steps mentioned in the ‘TAX SETUP’
details, then ebusiness tax will section below. Please follow the below mentioned changes in the
determine the appropriate tax

1. Tax Rate: (Step 5 in ‘TAX SETUP’ section):
In tax rate
a) Rate Type: Quantity
define the
b) UOM: <Unit of Measure for the purchase>
following
c) Quantity Rate: <Rate of tax per quantity>
Figure 15: Quantity Based Tax (Tax Rate)
2. Tax Rule: In tax rules of for the tax, use the following as default value (Step 7 in ‘TAX SETUP’
section):
a) Determine Taxable Basis: STANDARD_QUANTITY

Figure 16: Quantity Based Tax (Tax Rules)
TAX SETUP
Following are the brief setup steps for defaulting basic tax in purchasing. Based
on the business requirement the setups can be complex involving multiple tax
rules. These steps can be used for performing quick tests for using tax in
purchasing.
1. Set up Tax Regime (Responsibility: Tax Managers, Navigation:
Tax
Configuration > Tax Regime)
a. Regime Level - A Tax Regime is usually defined for a country
b. Controls and defaults – Following options can be checked.
Instead of replicating choices for different OUs, define which
regimes need to support recovery / Exemptions / Exceptions /
Overrides
i. Allow Tax Recovery
ii. Allow Tax Exemptions
iii. Allow Tax Exceptions
c. Click on ‘Next’ to choose the subscriptions for the regime.
d. Party Subscription Options
i. Define the parties (legal Entity / operating unit) that
subscribe to this tax.
ii. Configuration for Taxes and Rules: Choose if the
regime will be available as ‘Common Configuration’
i.e. Tax setups will be available for tax across legal
entities / operating units (use ‘Global Configuration

Owner’ as the Configuration Owner in the rest of the
setups) or you may use ‘Party Specific’ that only
allows tax setups to be used for the specific legal
Entity / operating unit or you
may use ‘Common Configuration with Party Overrides’
which will allow you to define portion of the tax setups to
be overridden and available only for your specific legal
Entity / operating unit. iii. Configurations for Product
Exceptions: Choose if the product exceptions can be
‘Common Configuration’ to allow the regime to use
product exceptions across all the legal entities / operating
units units (use ‘Global
Configuration Owner’ as the Configuration Owner
when setting up product exceptions) or choose ‘Party-
Specific Configuration’ to configure party specific
product exceptions.
e. Click on ‘Finish’ to save the tax regime.
2. Set up Tax (Responsibility:

Tax Managers, Navigation: Tax Configuration >
Taxes)
a. Configuration Owner: <Based on the tax regime setup for
‘Configuration for Taxes and Rules’ in Step 1>
b. Geography Type: Based on the applicability of the tax to a
geography
c. Parent Geography Type: Based on the geography of the tax
regime.
d. Tax Type: Based on the type of tax for e.g. VAT, Sales etc.
e. Applied Amount Handling: Recalculated is set by default. Set
to Prorated for tax to arrive at an amount calculated
previously.
f. Controls: Check the options required for your tax. For e.g. the
following can be checked for overriding tax rounding/tax line
and entry of manual tax line.
i. Allow Tax Rounding Override
ii. Allow Override for Calculated Tax Lines
iii. Allow Entry of Manual Tax Lines
g. Tax Exceptions/Exemptions Controls: Check the following
options to allow Tax Exceptions and Tax Exemptions.
i. Allow Tax Exceptions
ii. Allow Tax Exemptions
h. Tax Recovery Controls: Recovery rate is not mandatory
and is totally optional. Once the allow recovery rate tab is
checked for a tax then it will not be live till recovery rate
is defined. Check the following options to allow tax
recovery and override.

i. Allow Tax Recovery
ii. Allow Tax Recovery Rate Override
i. Defaults: Set the following options/defaults.
i. Allow Tax Rate Rules: Checked
ii. Default Recovery Settlement: Immediate
j. Save the Tax details by clicking on ‘Apply’
3. Setup Tax Status (Responsibility: Tax Managers, Navigation: Tax

Configuration > Tax Status)
b. Set as Default Tax Status: Checked (For defaulting it as the tax
status)
c. Default Controls: Following options are available. Choose the
options required for your tax.
i. Allow Tax Exemptions
ii. Allow Tax Exceptions
iii. Allow Tax Rate Override
d. Tax Rate Defaults: Set the following option.
i. Default Recovery Settlement: Immediate
e. Save the Tax Status details by clicking on ‘Apply’
4. Setup Tax Jurisdiction Code (Responsibility:

Tax Managers, Navigation: Tax
Configuration > Tax Jurisdiction)
a. Geography Type: Based on the applicability of the tax to a
geography
b. Parent Geography Type: Based on the geography of the tax
regime.
c. Parent Geography Name: Name of the parent geography. For
e.g. if the parent geography type was country, the geography
name could be United States, UK, India etc (based on your
tax).
d. Geography Name: Name of the jurisdiction geography. For e.g.
if the geography type was country, the geography name could
be United States, UK, India etc (based on your tax).
e. Effective From: <specify the effective date>
f. Default Tax Jurisdiction Settings: Set the following options /
defaults
i. Set as default Tax Jurisdiction: Checked
ii. Default Effective From: <specify the effective date>
* There should be at least one default jurisdiction.
5. Setup Tax Rate (Responsibility: Tax Managers, Navigation: Tax

Configuration > Tax Rate)
b. Rate Type: Percentage (For calculating the tax rate based on
percentage)
c. Percentage Rate: <Set the rate for the tax>
d. Rate Details: Click on the icon under the ‘Rate Details’ and set
the following.
i. Set as Default Rate: Checked
ii. Default Effective From: <Date effective>
e. Tax Accounts: Click on the icon under the ‘Tax Accounts’ and
set the following.
i. Ledger: Primary Ledger Name
ii. Click on ‘Create’
iii. Operating Unit: <Enter the value of Operating Unit> iv.
Tax Recoverable/Liability: <Enter the code
combination for this account>
v. Click on ‘Apply’ vi.
Click on ‘Apply’
*Tax accounts can to be defined at the tax and rate level. If
defined at both the places then rate level takes precedence.
f. Save the Tax Rate details by clicking on ‘Apply’
*There can be multiple taxes under a regime, multiple statuses

under a tax and multiple tax rates under a status.
6. Setup Tax Recovery Rate* (Responsibility: Tax Managers, Navigation: Tax

Configuration > Tax Recovery Rate)
b. Recovery Rate Periods: Set up the following values
i. Percentage Recovery Rate: <Recovery
Rate%>
ii. Effective From: <specify the effective
date>
iii. Set as Default Rate: Yes
iv. Default Effective From: <specify the
effective date> *Recovery rate is not mandatory and is
totally optional. Once the allow recovery rate tab is
checked for a tax then it will not be live till recovery rate is
defined. Recovery rate can to be defined at the tax and
rate level. If defined at both the places then rate level
takes precedence.

7. Setup Tax Rules (Responsibility: Tax Managers, Navigation: Tax
Configuration > Tax Recovery Rules)
a. Query the tax for the Configuration Owner (Based on the tax
regime setup for ‘Configuration for Taxes and Rules’ in Step 1)
b. Setup the following default rule types
i. Determine Place of Supply: Ship To
ii. Determine Tax Applicability: Applicable
iii. Determine Tax Registration: Ship From Party iv.
Determine Taxable Basis: STANDARD_TB v. Calculate
Tax Amounts: STANDARD_TC
8. Update Tax to make it available for transactions

a. Query the Tax
b. Update the following option:
i. Make Tax Available for Transactions: Checked
ii. Default Primary Recovery Rate*: <Choose the setup in
step 6 from the LOV>
c. Apply the changes.
9. Setup Configuration Owner Tax Options (Responsibility:

Tax Managers,
Navigation: Defaults and Controls > Configuration Owner Tax Options)
a. Set up the following for enabling tax on Purchase Orders
i. Configuration Owner: <As defined in the tax regime>
ii. Entity Name: Purchase Order
iii. Application Name: Purchasing iv. Effective From: <specify the effective
date>
v. Event Class: Purchase Order and Agreement
vi. Enabled: Checked
10. Setup Application Tax Options* (Responsibility:

Tax Managers, Navigation:
Defaults and Controls > Application Tax Options)
i. Application Tax Options: <Operating Unit>
ii. Operating Unit: Vision <Operating Unit>
iii. Application Name: Purchasing iv. Defaulting
Order 1: <Choose from the drop down list> v. Defaulting
Order 2: <Choose from the drop down list> vi. Defaulting
Order 3: <Choose from the drop down list> vii. Defaulting
Order 4: <Choose from the drop down list> viii. Defaulting
Order 5: <Choose from the drop down list>
*Defining ‘Application Owner Tax Options’ is optional
11. Setup Tax on Source:

Depending on the source from where tax needs to be
defaulted, please define the setups as mentioned in the section for

‘Application Tax Options - Tax Hierarchy’. (i.e. Supplier, Supplier Site,
Item, Ship-To Location or Payables Financial Options). For e.g. for
supplier, following setups are required.
a. In the tax page navigate to Parties > Party Tax Profiles.
b. Choose ‘Party Type’ as “Third Party” and query the Supplier in
the ‘Party Name’ for whom you like to define the tax.
c. Click on update icon (Pencil icon).
d. In the Main Tab check on ‘Allow Tax Applicability’.
e. Check ‘Set for Self Assessment / Reverse Charge’ if this is a
selfassessed tax.
f. Navigate to Tax Registrations tab and click on ‘Create’ button
and add the tax regimes/taxes applicable to the supplier.
12. Create a Purchase Order with a supplier

defined in step 11 above and save
the purchase order. Click on Actions > Manage Tax to navigate to the
tax details page.
You could also view a demonstration of the tax setups for purchasing
though the viewlets attached with this white paper.
UPGRADE CONSIDERATIONS
Following are some of the important impacts upon upgrade. Since the upgrade
path for release 12 is only though 11i, we will only be considering this release in
our considerations for upgrade. Also, this article would discuss only impacts on
purchasing perspective.
1. In release 11i, tax was maintained separately for payables, receivables
etc. The tax used in purchasing was stored in payables and tax calculation
API’s from payables were called for determining tax amount. The tax was
operating unit based. In release 12 a centralized repository will be used
to store taxes from across applications. The tax setup will be upgraded as
partyspecific configuration owners, with the operating unit owning the
tax setup. This means that the tax regimes for migrated taxes will
subscribe to party with ‘Operating Unit Owning the Tax Setup’ i.e. the
operating unit will still continue to own the tax.
2. Each tax code, including the tax codes within a tax group, migrates to
EBusiness Tax as a tax classification code. Payables and Purchasing tax
codes migrate as input tax classification codes. Each tax code will be
migrated with each tax code having its regime to rate flow. The tax group
will also be migrated as a tax classification, but will not have an
associated regime to rate flow in e-business tax. To group all related
taxes classifications under its related tax group, a direct rate
determination rule is created during migration that will be based on the
tax classification code that has the same name as tax group code. If tax

codes are not part of any tax groups then there will be no Direct Rate
Determination rule. You may define additional rules to determine taxes
to be defaulted on a transaction.
3. A new Regime Determination Template Standard Tax Classification Code
(STCC) will be created during migration using determining factor of Tax
Classification Code -which will indicate that the tax calculation would be
based on the old Release 11i approach. This will be available as ‘Regime
Determination Set’ on the configuration tax owner option for the
‘Operating Unit Owning Tax Content’. When the template is STCC, a
shortcut approach is used to calculate taxes based on the passed Tax
Classification Code. This is a special Regime Determination Template
which does not use Location based Determining Factors. All other
Regime Determination Templates must use location based determining
factors.
4. Direct Rate Determination Rules for the defaulted tax classification code
would determine the applicability of one or more taxes on a taxable line.
5. For Location based taxes, location values will be upgraded into the
Trading Community Architecture (TCA) Geography model as legislative
geography elements such as STATE, COUNTY, CITY and POSTAL CODES as
well as TAX ZONES to cover ZIP code ranges or groups of ZIP ranges with
the same GEO code. The upgrade will automatically create Tax
Jurisdictions for each Tax Zone within the context of a Regime and Tax.
For each of these Tax Jurisdictions, the upgrade will create a Tax
Jurisdiction Rate with a percentage rate associated with the relevant tax
Regime, Tax, Tax Status (STANDARD) and Tax Jurisdiction.
6. Supplier and supplier sites migrate to Trading Community Architecture
(TCA) as TCA parties and party sites. For these parties, E-Business Tax
includes the tax classification code field as part of the supplier or supplier
site party tax profile.
7. Release 11i Purchasing and Payables defaulting hierarchy are upgraded
to
Application Tax Options for each OU separately for Purchasing and
Payables respectively. Both these hierarchies will be independent of the
other unlike 11i tax hierarchy where payables based hierarchy could be
used in purchasing.
8. The current recovery rates will be upgraded as "primary" recovery rates
with the Release 11i Accounting based recovery rules upgraded as
Recovery Rate Rules.
9. Tax Registrations defined at HR locations or HR Organization levels in
Release 11i are upgraded as Tax Registrations at Party Tax Profile for
Legal Establishments. Additional Release 12 functionality is available to
define multiple registrations for the same party and different regimes,

taxes or jurisdictions, as well as the ability in Release 12 to define
registration status that can be used in rules.
For more detailed impact please refer to the Oracle Applications Upgrade
Guide: Release 11i to Release 12 and Oracle Financials and Oracle
Procurement Functional Upgrade Guide: Release 11i to Release 12.
DATA FLOW
Following is the mechanism of calls to the ebusiness tax to calculate tax.
1. Purchasing will populate tax-determining attributes to global temporary
tables.
2. It will then call ebusiness tax API's to calculate tax.
3. Once the tax lines are calculated, appropriate tables in ebusiness tax is
populated with tax details and the purchasing tables are updated to indicate
taxable line.
4. The data from the global temporary tables will be deleted.
Following are the main ebusiness tax tables that will contain the setup
information that will help support in troubleshooting ebusiness tax
information.
a. Tax Regimes: ZX_REGIMES_B

b. Taxes: ZX_TAXES_B
c. Tax Status: ZX_STATUS_B
d. Tax Rates: ZX_RATES_B
e. Tax Jurisdictions: ZX_JURISDICTIONS_B
f. Tax Rules: ZX_RULES_B
To get a dump of the eTax setups, you can use the following set of queries.
Please provide the tax regime code when prompted. If the issue is limited to a
tax then provide the tax name when prompted else please leave it blank.
SELECT *
FROM zx_regimes_b
WHERE tax_regime_code = '&tax_regime_code';
SELECT *
FROM zx_taxes_b
WHERE DECODE('&tax_name',null,'xxx',tax) = nvl('&tax_name','xxx')
AND tax_regime_code = '&tax_regime_code';

SELECT *
FROM zx_status_b
WHERE tax = '&tax_name'
SELECT *
FROM zx_rates_b
SELECT *
FROM zx_jurisdictions_b
WHERE DECODE('&tax_name',null,'xxx',tax) = nvl('&tax_name','xxx')
SELECT *
FROM zx_rules_b
Following are the main ebusiness tax tables that will contain the transaction
information that will have the tax details after tax is calculated.
a. ZX_LINES: This table will have the tax lines for associated with
PO/Release schedules.
TRX_ID: Transaction ID. This is linked to the
PO_HEADERS_ALL.PO_HEADER_ID
TRX_LINE_ID: Transaction Line ID. This is linked to the
PO_LINE_LOCATIONS_ALL.LINE_LOCATION_ID
b. ZX_REC_NREC_DIST: This table will have the tax distributions for

associated with PO/Release distributions.
TRX_LINE_DIST_ID: Transaction Line Distribution ID. This is linked to the
PO_DISTRIBUTIONS_ALL.PO_DISTRIBUTION_ID
RECOVERABLE_FLAG: Recoverable Flag. If the distribution is recoverable then

the flag will be set to Y and there will be values in the
RECOVERY_TYPE_CODE and RECOVERY_RATE_CODE.
c. PO_REQ_DISTRIBUTIONS_ALL: This table will have the tax distributions

for associated with Requisition distribution.
RECOVERABLE_TAX: Recoverable tax amount
NONRECOVERABLE_TAX: Non Recoverable tax amount
d. ZX_LINES_DET_FACTORS: This table holds all the information of the tax

line transaction for both the requisitions as well as the purchase
orders/releases.
PO_REQUISITION_HEADERS_ALL.REQUISITION_HEADER_ID /
PO_REQUISITION_LINES_ALL.REQUISITION_LINE_ID /
TROUBLESHOOTING
Tax Simulator
Simulator is a powerful user interface too that can be used to simulate Tax
Calculation based on what-if scenarios. It gives flexibility to test new and/or
changed tax rules. Tax Simulator helps on audit trail with respect to which Tax
Rules were satisfied in calculating a particular tax. You can start using the
Oracle
Tax Simulator by attaching this responsibility to your user. Navigate to the
Oracle
Tax Simulator and enter the Header and Line information as appropriate. Click
on ‘Tax Lines’ to display the tax lines for your tax. For detailed steps please
review the tax simulator viewlet attached to metalink Document ID (Note) for
this whitepaper.
Useful Tips:
1. Ship from Ship to and Bill From Bill to LOVs change depending upon the
application selected. Ship To/Bill To information is required for calculation
of location-based tax.
2. First Party locations need to be associated with the legal establishment for
the tax simulator to calculate tax.
Troubleshooting Tips

1. Determine the configuration owner subscription - Party tax profile of
Operating Unit. Check whether the OU has subscribed to LE setups.
Depending upon the set up above check whether the configuration owner
has subscribed to the regime. Check the configuration option e.g. party
specific configurations.
2. For the configuration owner (OU or LE) as determined above check the
Configuration Owner Tax Option for the event class. Check the Regime
Determination Set. For location-based taxes it should be Determine
Applicable Regime. Check the Tax Applicability flag.
3. Check the Party Tax Profile of the Third Party (supplier) and third party site
(supplier site). Check for the Tax Applicability flag at main tab and at
registration tab
4. Regime to Rate Flow: Depending upon the regime subscription option e.g.
party specific, common configuration or common with party override,
check following tax set ups. Check that every set up entity is effective for
the transaction date. Check that one status is default and every status has a
default
rate. In case of jurisdiction specific rates, check that every jurisdiction has a
default rate.
5. Tax Rules: Check the default place of supply or the rule for the tax. There
should be at least one valid jurisdiction for the place of supply determined.
Check whether the tax is by default Applicable. If not then at least one rule
must be satisfied.
Tax Log and File Versions
If there is an error while calculation please use the Note 417238.1 to obtain the
tax debug log. Below are the information that will be sufficient for Oracle
Support to progress the service request for any ebusiness tax calculation issues.
1. Set the following profile options on at user level for the user saving the
purchase order.
FND: Debug Log Enabled = 'Y'
FND: Debug Log Level = 'Statement'
FND: Debug Log Module = %
2. Now change the responsibility to purchasing and open the Purchase

Order/Requisition Form where this issue is happening and enter the details.
3. Obtain the AUDSID for your login. For obtaining this, perform the following
from just before opening Purchase Order / Requisition form. Go to Help-
>About Oracle Applications, you will find the AUDSID field. (* Sometime

AUDSID is not available for a few customers Please ignore this step in such a
case)
4. Obtain the max log sequence using the following query.
SQL> select max(log_sequence)
from fnd_log_messages;
5. Just before saving the PO/Requisition, turn trace on by:

Help > Diagnostics > Trace > Trace with Binds
6. Save the purchase order / requisition and then stop immediately afterwards
by.
Help > Diagnostics > Trace > No Trace
8. You will get a message showing the location of the trace file.
9. Please retrieve trace with tkprof. Run the trace file through tkprof as
follows:
tkprof <filename>.trc <filename>.out explain=<found
username/password>
example: tkprof file1234.trc file1234.out explain=<apps/apps>
10. Please get the debug log using the following query.
SQL> select * from fnd_log_messages
where log_sequence > <output from
step1> and (module like 'ZX%' or module
like 'zx%) and audsid = <audsid from step 3
above> order by log_sequence;
* If the AUDSID is not available please use the following query to retrieve the
tax log.
SQL> select * from fnd_log_messages
where log_sequence > <output from
step1> and (module like 'ZX%' or module
like 'zx%)
and user_id = (SELECT user_id FROM fnd_user where user_name =
‘&Username’) order
by log_sequence;
11. Provide the output of ‘Diagnostics: Appscheck’ concurrent program.

Navigate to Purchasing/Purchasing Super User/System Administrator
Responsibility.

Click on View > Request and Click on Submit a New Request
Click on OK for option Single Request
Choose the concurrent program Diagnostics: Apps Check
Select the following parameters
Application1= Ebusiness Tax
Application2 = Purchasing
Submit the Request and upload the output of the program for validating the file
version information.
APPENDIX
References
Note 406376.1 Oracle E-Business Tax Release 12 Known Issues
Note 417238.1 How to obtain tax debug logfile when using application version 12 or
higher
Note 398841.1 FAQ: Purchasing Integration With E-Business Tax
Note 415698.1 Oracle E-Business Tax key benefits, some new features and resource
material
Note 437693.1 R12 Unexpected Error Occurred During Tax Calculation
Note 456310.1 R12 Oracle E-Business Tax Configuration
Note 458218.1 Defaulted Tax Rate From E-Business Tax Cannot Be Overriden
Note 458320.1 E-Business Tax Calculation Issues After Entering The Next Line/ Deleting
Shipments/ Adding New Shipments in Purchase Order
Note 458218.1 Defaulted Tax Rate From E-Business Tax Cannot Be Overriden
Note 461844.1 E-Business Tax Calculation Error Occurs. Tax Log Shows 'Error Unable To
Get The HQ_ESTB_PARTY_TAX_PROF_ID For Legal_Entity xx'

Note 397158.1 Oracle E-Business Tax Documentation Resources, Release 12
1. Oracle E-Business Tax Implementation Guide
2. Oracle E-Business Tax User Guide
3. Oracle Financials and Oracle Procurement Functional Upgrade
Guide: Release 11i to Release 12
4. Oracle Applications Upgrade Guide: Release 11i to Release 12
(zipped)
Oracle Internal References

Note 419415.1 What to do with E-Business tax and Legal Entity SRs?
Tax Determination Attributes

Requisitions
=======
Header
----------
Requisition Type
Transaction Currency
Tax Header (Navigation: Tools > Manage Tax)

----------------
Taxation Country
Document Sub-type
Line
-------
Item
Unit of Measure
Quantity
Unit Price
Amount Need-
by Date
Tax Classification
Ship-to Organization
Ship-to Location
Supplier
Supplier Site

Additional Tax Attributes (Navigation: Tools > Manage Tax > Additional Tax Information)
--------------------------------- Business
Category
Intended Use
User-defined Fiscal Classification
Product Category
Assessable Value
Distribution
--------------- Quantity
Amount Charge
Account
Tax Recovery Rate
Project
Task
Award
Expenditure Type
Expenditure Organization
Expenditure Date
--------------------------------
Intended Use
POs/Releases
=========
Header
-----------
PO Document Type
Transaction Currency
Rate Type
Rate Date
Rate
FOB
Supplier
Supplier Site
Bill-to Location
Provisional Tax Determination Date (for Consumption Advice Orders)
Tax Header (Navigation: Tools > Manage Tax)

----------------
Taxation Country
Document Sub-type

Line
------
Item
Unit of Measure
Unit Price
Shipment
-------------
Quantity
Amount Need-
by Date
Tax Classification
Ship-to Organization
Ship-to Location
Source Document (for Scheduled Releases of Planned PO)
Source Shipment (for Scheduled Releases of Planned PO)
-------------------------------- Business
Category
Intended Use
User-defined Fiscal Classification
Product Category
Assessable Value
Distribution
----------------
Quantity
Amount
Account CCID
Tax Recovery Rate
Project
Task
Award
Expenditure Type
Expenditure Organization
Expenditure Date
Source Distribution (for Scheduled Releases of Planned PO)
--------------------------------
Intended Use (defaults from shipment level)

Acknowledgement
I wish to record my sincere appreciation towards:
My team mates Ajith, Mani, Muhittin, Selvan and Subhashini for all their help and feedback in completing this
document. Also Anand Naik and Vasvi Kedia from Product Management, Ranjith Palani and Rajalingam
Ramaswamy of Product Development Team, and Clarina Allen and Janet Flores from Procurement Support team
for reviewing this whitepaper. Thanks to Anand Naik for providing guidance at various situations. A Special
thankyou to Andrea Balasuriya from Product Release Readiness Team for constantly providing help from every
direction. I am very grateful to Chandu Tadanki for his constant encouragement and support.

E-business Tax – A Purchasing Perspective
October 2007
Author: Varkey Joseph
Oracle Corporation
World Headquarters
500 Oracle Parkway Redwood
Shores, CA 94065 U.S.A.
Worldwide Inquiries:
Phone: +1.650.506.7000 Fax:
+1.650.506.7200 oracle.com
Copyright © 2007, Oracle. All rights reserved.

This document is provided for information purposes only and the contents hereof are
subject to change without notice.
This document is not warranted to be error-free, nor subject to any other warranties or
conditions, whether expressed orally or implied in law, including implied warranties and
conditions of merchantability or fitness for a particular purpose. We specifically disclaim any
liability with respect to this document and no contractual obligations are formed either
directly or indirectly by this document. This document may not be reproduced or transmitted
in any form or by any means, electronic or mechanical, for any purpose, without our prior
written permission. Oracle, JD Edwards, PeopleSoft, and Siebel are registered trademarks of
Oracle Corporation and/or its affiliates. Other names may be trademarks of their respective
owners.

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E-business Tax – A Purchasing

E-business Tax – A b. Determine Tax

Purchasing c. Manage Tax

E-business Tax – A Purchasing Perspective Page 3

E-business Tax – A Purchasing Perspective Page 4

E-business Tax – A Purchasing Perspective Page 5

Tax: A classification of a charge imposed by a government through a fiscal or

E-business Tax – A Purchasing Perspective Page 6

Tax Jurisdiction: A geographic area where a tax is levied by a specific tax

Fiscal Classifications : Provides for the definition of tax fiscal classifications. A

Party Fiscal Classifications: A classification used by a tax authority to categorize

Product Fiscal Classifications: A classification used by a tax authority to

User defined Fiscal Classifications: A user defined Transaction Fiscal

E-business Tax – A Purchasing Perspective Page 7

Fiscal Classifications: Transaction Business Category: A business classification

E-business Tax – A Purchasing Perspective Page 8

Figure 2: Configuration Tax Owner Option

Party Tax Profile

E-business Tax – A Purchasing Perspective Page 9

E-business Tax – A Purchasing Perspective Page 10

Purchase documents call the eTax services for

E-business Tax – A Purchasing Perspective Page 11

An error occurred during Tax Calculation. Please correct

E-business Tax – A Purchasing Perspective Page 12

Displaying Tax Information

E-business Tax – A Purchasing Perspective Page 13

Modifying Tax Information

Override behaviour will be governed e-business tax as described in Note

E-business Tax – A Purchasing Perspective Page 14

E-business Tax – A Purchasing Perspective Page 15

Figure 7: Application Tax Options

E-business Tax – A Purchasing Perspective Page 16

E-business Tax – A Purchasing Perspective Page 17

E-business Tax – A Purchasing Perspective Page 18

E-business Tax – A Purchasing Perspective Page 19

5. Click on Enable and the

8. Click on ‘Next’ button.

E-business Tax – A Purchasing Perspective Page 20

2. Create Fiscal Classification for the party in e-business tax

E-business Tax – A Purchasing Perspective Page 21

Figure 10: Party Fiscal Classification (Supplier Type)

E-business Tax – A Purchasing Perspective Page 22

Therefore the rule becomes:

Product Fiscal Classification

The classification is used to categorize a product. There are three types of

E-business Tax – A Purchasing Perspective Page 23

E-business Tax – A Purchasing Perspective Page 24

E-business Tax – A Purchasing Perspective Page 25

Therefore the following rule will be applied:

E-business Tax – A Purchasing Perspective Page 26

Figure 12: Product Fiscal Classification (Non-Inventory Based)

E-business Tax – A Purchasing Perspective Page 27

Therefore the following rule will be applied:

If the ‘Product Classification’ field entered in additional tax information page

This is used to classify transactions based on purpose for which a product

E-business Tax – A Purchasing Perspective Page 28

Figure 13: Intended Use (Inventory Category)

E-business Tax – A Purchasing Perspective Page 29

Figure 14: Intended Use (Item Assignment)

E-business Tax – A Purchasing Perspective Page 30

Therefore the following rule will be applied:

The classification is used to categorize transactions according to the

Document Fiscal Classification: To classify based on the documents required /