Partner Boot Camp - Fusion

HCM Global HR
Define Legal Jurisdictions and
Legal Authorities for HCM

Instructor Guide

August 8, 2013
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CONTENTS
Lesson 1: Define Legal Jurisdictions and Legal Authorities for HCM
1
Lesson Objectives ................................................................................... 1
Legal Jurisdictions Overview...................................................................... 2
Legal Authorities Overview........................................................................ 3
Legislative Data Groups Overview .............................................................. 4
Legislative Data Groups............................................................................ 5
Instructor Note: Legislative Data Groups ..................................................... 7
Lesson Highlights .................................................................................... 8
Lesson Highlight Details ......................................................................... 9

i
 Lesson 1: Define Legal Jurisdictions and Legal Authorities for HCM

Lesson 1: Define Legal Jurisdictions and Legal

Authorities for HCM
Lesson Objectives
After completing this lesson, you should be able to:

 Define legal jurisdictions and legal authorities for HCM

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Lesson 1: Define Legal Jurisdictions and Legal Authorities for HCM

Legal Jurisdictions Overview

Jurisdiction is where a particular piece of legislation applies, perhaps group of countries,
country, state, county, or parish. French Labor Law, Singapore Transactions Tax Law,
and US Income Tax Laws are examples of particular legislation that apply to legal
entities operating in different countries' jurisdictions. You can create legal jurisdictions in
addition to the predefined ones.

Types of jurisdictions are:

 Identifying Jurisdiction
 Income Tax Jurisdiction
 Transaction Tax Jurisdiction

Identifying Jurisdiction

An identifying jurisdiction is the first jurisdiction you must register with to be allowed to
do business in a country. For each legal entity, select an identifying jurisdiction. If there
is more than one jurisdiction that a legal entity needs to register with to commence
business, select one as the identifying jurisdiction. Typically the identifying jurisdiction is
the one you use to uniquely identify your legal entity.

Income tax jurisdictions and transaction tax jurisdictions do not represent the same
jurisdiction. Although in some countries, the two jurisdictions are defined at the same
geopolitical level, such as a country, and share the same legal authority, they are two
distinct jurisdictions.

Income Tax Jurisdiction

Income tax jurisdictions impose taxes on your financial income generated by all your
entities within their jurisdiction. Create income tax jurisdictions to properly report and
remit income taxes to the legal authority.

Transaction Tax Jurisdiction

Tax jurisdictions and their respective rates are provided with transactions from the
suppliers, and require periodic maintenance. Create transaction tax jurisdictions through
Oracle Fusion Tax in a separate business flow, because of the specific needs and
complexities of various taxes. Use transaction tax jurisdiction for legal reporting of sales
tax and value added tax.

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 Lesson 1: Define Legal Jurisdictions and Legal Authorities for HCM

Legal Authorities Overview

A legal authority is a government or legal body that is charged with powers to make
laws, levy and collect fees and taxes, and remit financial appropriations for a given
jurisdiction. There are predefined legal authorities in the application, you can create
your own in addition.

 The Internal Revenue Service is responsible for collecting taxes and the
interpretation and enforcement of the Internal Revenue Code of the United
States.
 Legal authority information is printed on your tax reports to meet some countries’
requirements, such as India and Brazil.
 Legal authorities are defined in the Oracle Fusion Legal Entity Configurator.
 Tax authorities are a subset of legal authorities and are defined using the same
setup flow.
 Legal authorities are not mandatory in Oracle Fusion Human Capital
Management (HCM), but are recommended and are generally referenced on
statutory reports.

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Lesson 1: Define Legal Jurisdictions and Legal Authorities for HCM

Legislative Data Groups Overview

Legislative data group:

 Is a country specific data partition within an enterprise.

 Supports the configuration of objects with a strong legislative context, such as
payroll, absence types, elements, rates of pay.
 Does not span enterprises

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 Lesson 1: Define Legal Jurisdictions and Legal Authorities for HCM

Legislative Data Groups

Legislative data groups are a means of partitioning payroll and related data. At least one
legislative data group is required for each country where the enterprise operates. Each
legislative data group is associated with one or more payroll statutory units.

Note: For payroll purposes, it is recommended to have one legislative data group for
each country, since you define elements, formulas, and payroll definitions for a
legislative data group. If you have multiple legislative data groups for a country, you will
need to define the information again for each legislative data group.

Oracle Fusion Payroll is organized by legislative data groups.

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Lesson 1: Define Legal Jurisdictions and Legal Authorities for HCM

 Each legislative data group marks a legislation in which payroll is processed, and
is associated with a legislative code, currency and its own costing allocation key
flexfield structure.

Note: You assign the costing allocation key flexfield when you create a legislative data
group, though you can use the same costing key flexfield across different legislative
data groups. It is recommended that you assign a costing key flexfield when you create
a legislative data group, even if you are not using Financials, since you cannot edit the
flexfield value once the legislative data group is created.

 A legislative data group is a boundary that can share the same setup and still
comply with the local laws.
 A legislative data group can span many jurisdictions as long as they are within
one country, and contain many legal entities that act as payroll statutory units.
 Each payroll statutory unit can belong to only one legislative data group.

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 Lesson 1: Define Legal Jurisdictions and Legal Authorities for HCM

Instructor Note: Legislative Data Groups

Students may question this statement “At least one legislative data group is required for
each country where the enterprise operates“ This statement can be interpreted in
multiple ways:

A legislative data group is typically required only if you are implementing Payroll and a
separate LDG is required for each localization that Oracle provides. If you are not
implementing Payroll, you may choose to limit the number of legislative data groups.
For example, If you are implementing Talent and Compensation only, you need not
create a legislative data group for each country.

Some example scenarios:

 Company A, an EBS company that implemented Compensation only: Since EBS

model has hard partitions they created 32 legislative data groups to match their
partitions. This resulted in high maintenance for them; for example, they had to
reenter their jobs information 32 times, which could have been avoided.
 Company B, a Peoplesoft company that implemented Compensation and Talent:
They decided to implement legislative data group by regions to suit their
requirements.
 Company C, a Peoplesoft company that implemented Compensation only: They
just created one legislative data group.

All the above scenarios are correct. The difference is the amount of work required to
maintain the created legislative data groups.

You can add a legislative data group at any point in time. So, if in the future you decide
to implement Payroll, you can still add the required legislative data groups.

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Lesson 1: Define Legal Jurisdictions and Legal Authorities for HCM

Lesson Highlights
You should have learned how to:

 Define legal jurisdictions, legal authorities, and legislative data groups for
HCM

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 Lesson 1: Define Legal Jurisdictions and Legal Authorities for HCM

Lesson Highlight Details

Legal Jurisdictions and Legal Authorities

Jurisdiction is where a particular piece of legislation applies, perhaps group of countries,

country, state, county, or parish. French Labor Law, Singapore Transactions Tax Law,
and US Income Tax Laws are examples of particular legislation that apply to legal
entities operating in different countries' jurisdictions. You can create legal jurisdictions in
addition to the predefined ones.

A legal authority is a government or legal body that is charged with powers to make
laws, levy and collect fees and taxes, and remit financial appropriations for a given
jurisdiction. There are predefined legal authorities in the application, you can create
your own in addition.

Legislative Data Groups

Legislative data group:

 Is a country specific data partition within an enterprise.

 Supports the configuration of objects with a strong legislative context, such as
payroll, absence types, elements, rates of pay.
 Does not span enterprises.

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