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Business Tax
This table provides a checklist of the mandatory and optional implementation steps in other applications for E-
Business Tax. Some optional implementation steps may be conditionally mandatory, depending on your
overall setup.
Note: You must have access to the system administrator responsibility to perform many of these tasks.
If you want to include the GL Tax Options window, you must assign a data access set to the GL: Data
Access Set profile option under the Tax Manager responsibility.
Tax Administrator. Update and assign this responsibility to users who will provide E-Business Tax
technical setup and support services. You can update this responsibility according to the duties of each
tax administrator user.
Oracle Tax Simulator. Assign this responsibility to users who test tax setups with the Oracle Tax
Simulator.
You can also set up new E-Business Tax menus and responsibilities according to your requirements.
The table in this section summarizes E-Business Tax profile option information:
The Default column displays either the default profile option value in italics, or No Default if none
exists.
The User Access column indicates whether you can view or update the profile option.
The System Administration: Site, Application, Responsibility, and User columns indicate at which
levels the system administrator can update these profile options.
eBTax Taxware: Tax Selection Jurisdiction and Tax View Only Update
If the tax rate associated with a tax has the Allow Ad Hoc Rate option enabled, then users can override the
calculated tax rate on the transaction line.
See: Setting Up Tax Rates, Oracle E-Business Tax User Guide for more information.
If the tax configuration has the related options enabled, then users can enter manual tax lines on the transaction
for the applicable tax.
If you set the eBTax: Allow Override of Customer Exemptions profile option to Yes, you must also complete
the related setups for tax exemptions.
E-Business Tax defaults the tax classification code to the transaction line according to the defaulting hierarchy
defined for the operating unit and application. See: Using Application Tax Options, Oracle E-Business Tax
User Guide for more information.
If the tax recovery rate associated with a tax has the Allow Ad Hoc Rate option enabled, then users can
override the calculated tax recovery rate on the transaction.
The meaning of ad hoc entry of tax recovery rates differs according to the source application for the
transaction:
Payables - The user can only select another previously defined recovery rate for the tax.
Procurement - The user can either select another previously defined recovery rate for the tax or enter
a new recovery rate.
See: Setting Up Tax Recovery Rates, Oracle E-Business Tax User Guide for more information.
Freight Charge - The freight Inventory item applies to external Receivables transactions.
Freight for Intercompany - The freight Inventory item applies to internal Receivables transactions
only.
You must also set the eBTax: Invoice Freight as Revenue profile option to Yes.
Note: You may also need to set the OE: Item Validation Organization profile option.
Set the eBTax: Invoice Freight as Revenue profile option to Yes, if you are required to tax freight amounts.
The freight amounts entered in the Order Management Ship Confirm window are then passed to Receivables
transactions as taxable line items.
If you set the eBTax: Invoice Freight as Revenue profile option to Yes, you must also set the eBTax: Inventory
Item for Freight profile option.
If you set the eBTax: Read/Write Access to GCO Data profile option to Yes, then the applicable users can set
up taxes and related configuration data for the global configuration owner. Legal entities and operating units
can then share the global configuration owner tax setups.
See: Configuration Options in Oracle E-Business Tax, Oracle E-Business Tax User Guide for more
information.
The Taxware API parameter that accepts this profile option value is JurLink.ServInd.
The Taxware API parameter that accepts this value is TaxSelParm of Taxfn_Tax010.
Tax only - Taxware calculates tax based on the ship-to address only.
Jurisdiction and Tax - Taxware calculates tax based on all jurisdiction information, including ship-to,
ship-from, point of order origin (POO), and point of order acceptance (POA).
See: Technical Reference, Oracle E-Business Tax: Vertex Q-Series and Taxware Sales/Use Tax System
Implementation Guide for information about the Nexpro functionality.
Set this profile option if you intend to use Vertex to calculate tax on transactions.
Note: E-Business Tax does not perform validation on updated or disabled lookups. If you want to disable,
update, or apply an end date to an E-Business Tax lookup type, please ensure that the applicable values are not
in use in the E-Business Tax setup.
ZX_INPUT_CLASSIFICATIONS and
ZX_OUTPUT_CLASSIFICATIONS
Use the ZX_INPUT_CLASSIFICATIONS and ZX_OUTPUT_CLASSIFICATIONS lookup types to create
tax classification codes for use in tax determination.
Release 11i tax codes and tax groups migrate to E-Business Tax as tax classification codes. Payables and
Purchasing tax codes migrate as tax classification codes under ZX_INPUT_CLASSIFICATIONS. Receivables
and Projects tax codes migrate as tax classification codes under ZX_OUTPUT_CLASSIFICATIONS. You can
set up additional tax classification codes for use with a migrated tax data model or as an additional determining
factor in tax determination.
ZX_WEB_EXP_TAX_CLASSIFICATIONS
Use the ZX_WEB_EXP_TAX_CLASSIFICATIONS lookup type to create tax classification codes for use in
tax determination for transactions originating from Internet Expenses.
ZX_EXEMPTION_REASON_CODE
Use the ZX_EXEMPTION_REASON_CODE lookup to create exemption reason lookup code for use in tax
exemptions. The exemption reason is a user-defined code that lets you monitor the use of customer or product
tax exemptions issued by the tax authority and applied to specific transactions.
When you set up a tax exemption, you can use the exemption reason to identify the reason for this exemption
or to monitor a customer's application for an exemption. At transaction time, E-Business Tax only considers
certain tax exemptions if the exemption reason and certificate number entered on the transaction line match the
exemption definition.
ZX_JEBE_VAT_TRANS_TYPE
Use the ZX_JEBE_VAT_TRANS_TYPE lookup type to create tax transaction types for use with tax rate
codes. You use transaction types when you set up a tax rate.
Tax rate transaction types represent local tax authority codes both for reporting purposes and for controlling
which rates appear on an invoice. See: Setting Up Tax Rates, Oracle E-Business Tax User Guide for more
information.
ZX_REGISTRATIONS_REASON
Use the ZX_REGISTRATIONS_REASON lookup type to create tax registration reason codes. You use
registration reason codes when you set up a tax registration to represent the reason for the tax registration.
The tax registration reason code is for tax reporting purposes only. See: Setting Up a Tax Registration, Oracle
E-Business Tax User Guide for more information.
ZX_REGISTRATIONS_TYPE
Use the ZX_REGISTRATIONS_TYPE lookup type to create tax registration type codes. You use tax
registration type codes when you set up a tax registration to organize your tax registrations into categories.
E-Business Tax provides these seeded tax registration types: CNPJ; CPF; CUIL; CUIT; DNI; NIT; OTHERS;
VAT. The tax registration types CPF, CNPJ, and OTHERS are used in tax registration number validation for
Brazil. All other seeded tax registration types, and the tax registration types that you define, are for tax
reporting purposes only.
See: Setting Up a Tax Registration, Oracle E-Business Tax User Guide for more information.
ZX_REGISTRATION_STATUS
Use the ZX_REGISTRATION_STATUS lookup type to create tax registration status codes. You use tax
registration status codes as determining factors in tax rules.
Lookup Code
Agent The company acts as a withholding agent for the tax authority for the applicable
Not Registered The company is not registered for the applicable tax.
See: Setting Up Tax Rules, Oracle E-Business Tax User Guide for more information.
ZX_TAX_TYPE_CATEGORY
Use the ZX_TAX_TYPE_CATEGORY lookup type to create tax types. You use tax types when you set up a
tax.
You can use tax types to classifies taxes for tax reporting purposes. See: Setting Up Taxes, Oracle E-Business
Tax User Guide for more information.
Lookup Code
Sales Direct taxes that are collected from the consumer by the supplier and paid to the tax
Taxes that are levied at a level lower than the country level, for example, state or provincial taxes.
Tax characteristics, such as the tax rate, vary at a lower level than the country level.
You must set up and maintain the TCA geography hierarchy before you can perform these tax-related setups:
Legal entities and establishments - Enter and maintain location information for first party legal
entities and the first party legal establishments. See: Setting Up Legal Entity for more information.
Tax zones - Set up tax zones to represent regions according to a tax requirement. Tax zones let you
group together regions otherwise separated by geographical or political boundaries where a tax
treatment is identical throughout these regions. See: Setting Up Tax Zones, Oracle E-Business Tax
User Guide for more information.
Tax regimes - Set up tax regimes for a country or tax zone. See: Setting Up Tax Regimes, Oracle E-
Business Tax User Guide for more information.
Taxes - Set up taxes and specify the geographical level where each tax applies, such as a city tax or a
county tax. See: Setting Up Taxes, Oracle E-Business Tax User Guide for more information.
Tax jurisdictions - Set up tax jurisdictions for a tax using geographies or tax zones. See: Setting Up
Tax Jurisdictions, Oracle E-Business Tax User Guide for more information.
Tax rules - Use the Geography determining factor class to set up determining factor sets that use
geographical locations in tax rules. Use the User Defined Geography determining factor class to set up
determining factor sets that use tax zones in tax rules. See: Setting Up Tax Determining Factor
Sets, Oracle E-Business Tax User Guide for more information.
Country structure - Set up and maintain the hierarchical structure of a country. The structure begins
with the largest geography type and ends with the smallest geography type. For example, the United
States structure is: State > County > City > Postal Code.
Geography types - TCA provides seeded geography types for certain countries. The geography types
are used to create the geographical hierarchy of a country. Perform these tasks for geography types:
o If necessary, set up new geography types in accordance with the structure of a country.
o Set up and maintain aliases for specific Geography elements. An alias is an alternative
name for a geography type. You can use aliases as a part of your address validation.
o Define the contents of a geography type within the context of a country structure, for
example, the states belonging to the United States or the provinces belonging to
Canada.
Address validations - Set up mappings and validations between country address formats and the TCA
geography hierarchy. TCA uses the definitions you provide to validate an address entry against the
geography hierarchy. You use address validation for taxes levied below the country level to verify that
it is a valid address for tax purposes.
For example, set up a list of Canadian provinces to verify each applicable address against a valid
province for the correct handling of Canadian PST.
Enable both the Geography Validation and Tax Validation options for each level for which you need
to create tax jurisdictions.
Related Topics
First party legal entity - The legal entities that represent your company.
First party legal establishments - The legal establishments that have or require tax registrations,
either implied or explicit, from one or more tax authorities.
Legal authorities - The legal authorities that represent the tax authorities in the tax regimes where
you do business.
When you set up a legal entity or establishment, you can also set up party tax profile details, including general
information, rounding rule, and tax registrations. See: Party Tax Profiles in Oracle E-Business Tax, Oracle E-
Business Tax User Guide for more information.
If you set up country default controls for the countries where you do business, then the applicable tax regime
and tax values default to the legal establishment tax registration record. See: Setting Up Country Default
Controls, Oracle E-Business Tax User Guide for more information.
Party tax profiles - Party tax profiles contain the information that relates to a party's transaction tax
activities, and identify the legal entity to the tax authorities. See: Setting Up a First Party Tax
Profile, Oracle E-Business Tax User Guide for more information.
Configuration options - Configuration options indicate the tax regimes to which the legal entity is
subject. For each tax regime/legal entity assignment, the configuration option also defines the way in
which the legal entity uses tax configuration data for the regime. See: Setting Up Configuration
Options, Oracle E-Business Tax User Guide for more information.
Configuration owner tax options - Configuration owner tax options let you set specific transaction
tax processing and control options for a combination of configuration owner and application event
class. See: Setting Up Configuration Owner Tax Options, Oracle E-Business Tax User Guide for more
information.
When you set up legal entities for your company, set the Transacting Entity option to Yes. See: Creating a
Legal Entity, Oracle Financials Implementation Guide for more information.
After you set up legal entities, set up the legal establishments that belong to the legal entity.
When you set up legal establishments, you can also perform these tax-related setups:
Party tax profiles - Set up a party tax profile for each legal establishment. You can set up certain
details of the party tax profile when you create the legal establishment. See: Setting Up a First Party
Tax Profile, Oracle E-Business Tax User Guide for more information.
Tax registrations - Set up tax registrations for each legal establishment. Depending on the applicable
tax requirements, you may need to set up more than tax registration for an establishment. You must
complete additional setup in E-Business Tax to set up a tax registration. See: Setting Up a Tax
Registration, Oracle E-Business Tax User Guide for more information.
Use the Associate Business Entities region to link a tax-related business entity to a legal establishment. See:
Creating Establishments, Oracle Financials Implementation Guide for more information.
Tax authority tax profile - Set up tax authority tax profiles for your collecting, reporting, and issuing
tax authorities. A collecting tax authority manages the administration of tax remittances. A reporting
tax authority receives and processes all company transaction tax reports. An issuing tax
authority issues tax registration numbers and tax exemption certificates. See: Setting Up a Tax
Authority Tax Profile, Oracle E-Business Tax User Guide for more information.
Basic tax configuration - The collecting and reporting tax authorities appear in the corresponding list
of values on these tax configuration setups:
o Tax regimes
o Taxes
o Tax jurisdictions
Tax registrations - Enter the tax authority responsible for issuing the legal establishment tax
registration number. Update the collecting and reporting tax authorities that default from the tax
jurisdiction record. See: Setting Up a Tax Registration, Oracle E-Business Tax User Guide for more
information.
Tax exemptions - Enter the tax authority that issues the tax exemption certificate. See: Setting Up
Tax Exemptions, Oracle E-Business Tax User Guide for more information.
When you set up a legal authority, set the Legislative Category to Transaction Tax. See: Creating and
Updating Legal Authorities, Oracle Financials Implementation Guide for more information.
Legal entities - Apply an end date to the related tax reporting types, party classifications, and
configuration options.
Legal establishments - Apply an end date to the related tax reporting types, party classifications, and
tax registrations.
Assign users to responsibilities associated with the operating units for the applicable applications.
Assign user to an E-Business Tax responsibility. See: Setting Up Tax Users for more information.
Assign operating units to the applicable primary ledgers. See: Setting Up Accounts and Accounting
Information.
You must set up and maintain operating units before you can perform these tax-related setups:
Party tax profiles - Set up a tax profile for each operating unit. The tax profile indicates that the
operating unit either uses the tax configuration of the legal entity for transactions involving the legal
entity and tax regime, or acts as a configuration owner for the applicable tax regime. See: Setting Up
an Operating Unit Tax Profile, Oracle E-Business Tax User Guide for more information.
Tax configuration options - Set up configuration options for applicable operating units when you set
up a tax regime or a party tax profile. The configuration option associates the operating unit with tax
regimes either to share the tax setup of the global configuration owner or to act as a configuration
owner and maintain a separate tax setup. See: Configuration Options in Oracle E-Business
Tax, Oracle E-Business Tax User Guide for more information.
Tax accounts - You can set up tax accounts for a single operating unit, or you can share tax accounts
across multiple operating units. The accounting segments associated with the selected operating units
are available for tax account purposes. The calculated tax amounts post to the operating unit accounts
that you define. See: Setting Up Tax Accounts, Oracle E-Business Tax User Guide for more
information.
Configuration owner tax options - Set up configuration owner tax options for a combination of
operating unit configuration owner and application event class. The configuration owner tax option
settings let you modify the manner in which tax data is configured. See: Setting Up Configuration
Owner Tax Options, Oracle E-Business Tax User Guide.
You can set up operating units using Oracle Human Resources, Oracle Inventory, or Oracle General Ledger.
The setup of operating units requires a number of prerequisite setups. The number and kind of prerequisite
setups depends upon your organization and your tax implementation.
Related Topics
Review and complete these accounting setup tasks according to your requirements:
Ledgers - Set up the chart of accounts, accounting calendar and currency for the primary ledger of
your legal entities and, if applicable, any secondary ledgers.
Legal entity balancing segments - Define balancing segment values for the legal entities involved in
tax transactions.
Accounting setup - Create an accounting setup for each legal entity with the ledger or ledgers that
you created, and assign the applicable operating units to the primary ledger.
Complete the accounting setup - Complete the details of the accounting setups.
Related Topics
You must set up and maintain TCA classifications before you can perform these tax-related setups:
Party fiscal classifications - Set up party fiscal classifications for your customers and customer sites
and suppliers and supplier sites. Party fiscal classifications let you classify the customer/customer site
or supplier/supplier site according to categories you define for tax-related purposes. See: Setting Up
Party Fiscal Classifications, Oracle E-Business Tax User Guide for more information.
Party tax profiles - Assign party fiscal classifications to third party tax profiles to use in tax
determination for invoices associated with the party. See: Setting Up a Third Party Tax
Profile, Oracle E-Business Tax User Guide for more information.
Tax rules - Use the Party Fiscal Classification determining factor class to set up determining factor
sets for use in tax rules. The Party Fiscal Classification determining factor class uses the party fiscal
classification type defined for a TCA classification to identify the parties involved in a transaction.
See: Setting Up Tax Determining Factor Sets, Oracle E-Business Tax User Guide for more
information.
Use TCA administration to set up and maintain classifications for use in party fiscal classifications:
Class category - Set up a class category to represent the party fiscal classification type. These rules
apply to enabling class category options for use with fiscal classifications:
o Allow Multiple Parent Codes - You cannot enable this option. E-Business Tax does
not allow the class codes in a hierarchy to have multiple parents.
o Allow Parent Code Assignment - You can enable this option. E-Business Tax lets you
use the parent code to represent a class code within the hierarchy.
o Allow Multiple Class Code Assignments - You can enable this option. E-Business
Tax lets you assign more than one class code to the same entity within the hierarchy.
Class codes - Set up class codes under the class category to represent the detailed classifications that
belong to this class category. When you set up a party fiscal classification using a TCA class category,
the related class codes by default become party fiscal classification codes.
You can either use existing Inventory category sets or set up new Inventory category sets for use with product
fiscal classifications. After you set up Inventory item categories and associate them with product fiscal
classifications, the corresponding product fiscal classification code defaults to the transaction line for any item
that belongs to the inventory category set. See: Setting Up Product Fiscal Classifications, Oracle E-Business
Tax User Guide for more information.
You can also specify a default Inventory category set for a given country. The Inventory category associated
with the item for this default category set defaults to the transaction line. See: Setting Up Country Default
Controls, Oracle E-Business Tax User Guide for more information.
To model Inventory item categories for product fiscal classifications, you create categories and category sets
and associate product fiscal classification types to the Inventory item category set.
This is a sample representation of numeric codes for the Brazilian CNAE and NCM product fiscal
classification:
Structure Category
Canadian Goods and Services Tax (GST) and Harmonized Sales Tax (HST)
These examples are intended to demonstrate typical setups, option settings, and interdependencies
for each tax regime. They are not intended to provide an example of best practices in all cases. The
actual details of your own tax configuration setup will depend on your company's specific internal
and legal tax requirements.
Reduced rate of 5% for certain goods and services, such as domestic fuel and energy saving materials.
Zero rate.
Some goods and services are exempt from VAT. In addition, there is a zero rate for United Kingdom
companies that supply goods and services to VAT-registered customers in other European Union
Member States, provided the company meets the appropriate conditions.
The example in this section is based on the Customs and Excise Management Act 1979.
Setup Features
This tax setup example is for a first party registered in the United Kingdom and dealing with
domestic, intra-EU and extra-EU transactions. Setup features include:
There are five possible tax statuses for VAT: standard, reduced, exempt, zero, and Intra-European
Union zero. The Intra-European Union zero status came into effect in 2000. There is a separate tax
status record for each tax status. All records have the same tax regime code, configuration owner, and
tax, as well as the same default controls.
Although you do not need to report exempt transactions, this example illustrates the creation of a
specific Exempt tax status (with associated zero rate) to allow simple identification for reporting or
audit purposes. The separate Intra-European Union zero status also allows for easy identification and
reporting.
A company of this kind can normally recover 100%, with standard exceptions where 0% recovery is
permitted.
The setup uses tax rules rather than tax exceptions to define exempt and reduced rate goods.
The setup uses tax rules rather than tax exemptions to define exempt customers, such as diplomatic
and military customers.
The exchange rate type is User, to take into account the different options available to the company for
expressing foreign currency transactions.
See: Setting Up Oracle Inventory for information about creating Inventory item categories for product
fiscal classifications.
Intended Use
Legal A
Field
City Southend-on-Sea
Status Active
Primary Address Yes
Tax Au
Field
Tax Zones
The tax zone type European Economic Regions contains a tax zone record for each country in the
European Union. The setup values are the same for each country, except for the Geography Name
field.
Field
Belgium
...
United Kingdom
Main Information
Name GB VAT
Controls
Defaults
Tax Setup
Field Value
Main Information
Tax GB VAT
Controls
Main Information
Standard Status
Reduced Status
Exempt Status
Zero Status
Field
Tax
Geography Type
Geography Name
Precedence Level
Effective From
In some instances you may also need to set up a partial rate. A company's actual rate for partial
recovery will depend on the combination of its taxable and exempt statuses, as agreed upon with
HM Revenue and Customs.
Field Value
Main Information
Standard Rate
Zero Rate
Field Value
Main Information
Rate Period 1
Default Recovery Rate Code GB VAT STANDARD REC RATE Allow Overrid
Rate Period 2
Percentage Rate 17.5 Default Effec
Default Recovery Rate Code GB VAT STANDARD REC RATE Allow Overrid
Main Information
Field Value
First Party Legal Establishment
Tax Registration
Tax GB VAT E
Source Explicit
GB VAT PRODUCT
GB VAT RE
Rule Type
GB VAT REG
Geography Ship To
GB VAT Plac
Geography Ship To
GB VAT A
Geography Ship To
Geography Bill To
GB VAT
Geography Ship To
GB VAT Rec
The tax condition set GB INTRA EU GOODS PURCHASE uses the tax determining factor set GB
VAT PLACE OF SUPPLY in the Determine Place of Supply rule. The tax condition set GB GOODS
PURCHASE REVERSE CHARGE uses the tax determining factor set GB VAT REGISTRATION in
the Determine Tax Registration rule.
GB INTRA EU GO
GB GOODS PURCHAS
The tax condition set GB INTRA EU AND DOMESTIC SERVICES uses the tax determining factor
set GB VAT PLACE OF SUPPLY in the Determine Place of Supply rule.
GB INTRA EU AND DO
The tax condition set GB DOMESTIC GOODS BILL FROM NON REG uses the tax determining
factor set GB VAT APPLICABILITY in the Determine Tax Applicability rule.
GB DOMESTIC GOODS
The tax condition set GB DOMESTIC SERVICES BILL FROM NON REG uses the tax determining
factor set GB VAT APPLICABILITY in the Determine Tax Applicability rule.
GB DOMESTIC SERVICE
The tax condition set GB INTRA EU GOODS SALE ZERO RATE uses the tax determining factor set
GB VAT STATUS in the Determine Tax Status rule.
GB INTRA EU GOOD
The tax condition set GB GOODS REDUCED RATE uses the tax determining factor set GB VAT
STATUS in the Determine Tax Status rule.
GB GOODS RE
Determining Factor Class Class Qualifier D
The tax condition set GB SERVICES REDUCED RATE uses the tax determining factor set GB VAT
STATUS in the Determine Tax Status rule.
GB SERVICES R
The tax condition set GB GOODS ZERO RATE uses the tax determining factor set GB VAT
STATUS in the Determine Tax Status rule.
GB GOODS
The tax condition set GB SERVICES ZERO RATE uses the tax determining factor set GB VAT
STATUS in the Determine Tax Status rule.
GB SERVICES
The tax condition set GB EXPORT GOODS OUTSIDE EU uses the tax determining factor set GB
VAT STATUS in the Determine Tax Status rule.
GB EXPORT GOO
The tax condition set GB GOODS EXEMPT RATE uses the tax determining factor set GB VAT
STATUS in the Determine Tax Status rule.
GB GOODS E
The tax condition set GB SERVICES EXEMPT RATE uses the tax determining factor set GB VAT
STATUS in the Determine Tax Status rule.
GB SERVICES
The tax condition set GB PURCHASE LINKED TO EXEMPT SALE ZERO REC uses the tax
determining factor set GB VAT RECOVERY RATE in the Determine Recovery Rate rule.
GB PURCHASE LINKED TO
The tax condition set GB PRODUCT ZERO RECOVERY uses the tax determining factor set GB
VAT RECOVERY RATE in the Determine Recovery Rate rule.
GB PRODUCT ZE
For each tax condition used in a tax rule, the rule result applies when its corresponding tax condition
is evaluated as true.
Determine Pla
Determine Ta
GB DOMESTIC SERVICES BI
Determine
Determine Re
Tax Rule Code Effective From
A federal and provincial blended tax called Harmonized Sales Tax (HST) is levied in the three
participating provinces of Newfoundland and Labrador, Nova Scotia, and New Brunswick. The HST
operates as a single rate of 14%, of which six percent (6%) represents the federal component and
eight percent (8%) the provincial component.
The recovery of tax is made through a rebate and/or an Input Tax Credit (ITC), depending on
whether the purchases are intended for commercial or non-profit activities. Some goods and
services are exempt from GST and HST, such as health and educational services.
Taxable goods and services are subject to one of the following statuses:
Zero-rated
Exempt
Tax status is generally determined by product. For the consumer, there is no difference between
zero-rated and exempt goods and services: the consumer either pays tax or not. Although GST and
HST are not charged on zero-rated goods and services, the tax registrant can claim input tax credits
to recover the GST or HST paid or owed on purchases and the expenses incurred to provide them.
The example in this section is based on the changes to GST and HST rates effective July 1, 2006.
Examples
This section provides four examples of Canadian tax setup:
Ontario Example 1 - GST and PST are typically applicable on most goods and services. In this
example, a tax is not applicable on a transaction. Since you will typically set the tax applicability of a
tax to Applicable, you will need to define a tax rule to identify when a transaction is not applicable.
Ontario Example 2 - The taxable basis for tax calculation is typically (selling price) * (tax rate). In
this example, the taxable basis is reduced in Ontario for the purchase of portable homes to be used for
construction purposes.
Quebec Example 1 - In Quebec, PST is calculated based on the selling price plus GST.
Quebec Example 2 - In Quebec, PST is applied on most goods and services. For transactions relating
to resale, you can fully recovery the PST.
Prerequisites
Before you can set up the E-Business Tax tax configuration for these examples, you may need to
complete one or more of these tasks:
Set up legal authorities for Canada Revenue Agency, Ontario Ministry of Finance, and the Ministere
du Revenu du Quebec.
CA GST HST, that contains the CA GST tax (it will also include CA HST, which is not included in
these examples).
CA PST that contains the CA PST tax. The tax regime uses cross-regime compounding for provinces
such as Quebec, where GST is compounded with PST.
The CA GST HST regime has a compounding precedence of 1; the CA PST regime has a
compounding precedence of 2.
Field Value
Main Information
Defaults
Tax Precision 2
Field Value
Main Information
Name CA PST
Regime Level Country
Controls
Defaults
Tax Precision 2
You also need to create party tax profiles for each of the three taxing authorities: Canada Revenue
Agency for the GST across Canada, Ontario Ministry of Finance for the Ontario PST, and Ministere
du Revenu du Quebec for the Quebec PST. You need to set up each of these tax authorities in the
Legal Entity Manager as a legal authority for transaction tax. The tax authorities are all both
collecting and reporting tax authorities.
Field Value
First Party Legal Establishment
Tax Registrations
Canada Registration
Ontario Registration
Quebec Registration
Tax Regime Code CA PST
Tax Setup
Field Value
Main Information
Tax CA GST
Controls
Field Value
Main Information
Standard Status
Default Controls
This example shows the GST and PST tax jurisdictions for Ontario.
Tax
Geography Type
Geography Name
Precedence Level
Effective From
Tax
Geography Type
Geography Name
Precedence Level
Effective From
Field Value
Main Information
Standard Rate
Field Value
Main Information
Rate Period
Default Recovery Rate Code CA GST STD REC RATE Allow Override and E
Product Intended Use - Set up these Inventory-based product intended use fiscal classifications.
Since these are Inventory-based, you must first create Inventory category codes for these fiscal
classifications:
o Quebec Example 2 - Create an intended use fiscal classification for resale purposes.
Non-Inventory Based Product Fiscal Classification - For Ontario Example 2, create a non-
Inventory-based product fiscal classification for portable homes.
Field
Tax CA PST
For Quebec Example 1, create a tax formula to represent that PST is calculated upon the sale price
plus GST.
Field
Name CA Ta
Regime Code CA PS
Tax CA PS
Compounding Tax CA GS
Field
Country
Start Date
Code Type
Geography Type
Geography Names
Rule Type
If the values of this tax condition set are evaluated as true, then the result of the Determine Tax
Applicability rule is Not Applicable.
Geography Ship To
If the values of this tax condition set are evaluated as true, then the result of the Determine Taxable
Basis rule is the tax formula CA TB PST ON MOBILE HOME. This formula is used to determine the
taxable basis, which results in a 50% reduction in the taxable basis.
Geography Ship To
If the values of this tax condition set are evaluated as true, then the result of the Determine Taxable
Basis rule is the tax formula CA TB GST INCLUDED. This formula is used to determine the taxable
basis, which results in PST calculated on the sale price plus GST Note that this tax rule uses the
same tax determining factor set as in Ontario Example 2 for tax rule efficiency.
Geography Ship To
Geography Ship To
If the values of this tax condition set are evaluated as true, then the result of the Determine
Recovery Rate rule is the tax recovery rate CA PST STD REC RATE.
United States Sales and Use Tax
United States Sales and Use Tax is a tax levied on the end consumer, with the business serving as
the collection agent for the tax authority. Any company receiving goods within a state must either
pay sales tax on receipt or self-accrue a use tax, usually to the same value. The self-accrual scheme
ensures that the state receives income independent of the tax registration of the business.
The details of rates and regulations surrounding sales and use tax vary from state to state, and are a
matter of state and local law and court cases. Exemptions are normally available in each state,
including, but not limited to: resales, manufacturing, research and development, non-profit or exempt
organizations, and governmental organizations.
The nexus of taxation refers to the minimum level of commerce necessary to allow a tax authority to
impose a tax registration, tax filing, and/or tax collection responsibility. The type of activity required
to create nexus is defined by state or local statute, case law, and the due process and Commerce
Clause of the United States Constitution. Whether a business has established nexus in a tax
jurisdiction requires an assessment of all facts and circumstances of its activity within that
jurisdiction. You should seek the advice of a qualified tax professional to determine if your business
has established nexus (a registration and filing requirement) before you implement sales tax.
The situs of taxation describes which tax authority levies the tax. This is typically the ship-to state,
county, or city, although there are many local taxes that base situs on the ship-from location. Any tax
collected for a given tax authority must be reported back to that same authority.
Setup Features
This tax setup example is for a first party registered in California and dealing with city, county, state
transactions. Setup features include:
There are three taxes under the US Sales and Use tax regime, for city, county and state sales.
US Sales and Use tax is not recoverable, so the setup does not include recovery rates.
There are multiple tax jurisdictions at the city and county level.
Main Information
Controls
Defaults
Tax Precision 2
Field Value
Tax Registration
Source Explicit
Tax Setup
There are three taxes under the US SALES AND USE tax regime for city, county, and state sales.
The example below is for state sales. All setup values are the same for the three taxes.
Field Value
Main Information
Controls
Main Information
Standard Status
Reduced Status
Zero Status
Field
Tax
Geography Type
Geography Name
Precedence Level
Effective From
Field Value
Main Information
Rate Period
Tax Regime
1. The transaction date must fall within the active dates of the regime. The transaction to be taxed must
be created in an operating unit that is associated with the taxing regime.
2. This association can either be through the operating unit party tax profile or, if the operating unit is set
up to use the subscription of the legal entity, through the legal entity party tax profile.
Note: (N) Tax Managers > Parties > Party Tax Profile > Operating Unit Owning Tax Content. To use
the Legal Entity setup, verify that the check box is selected.
3. If the tax regime has content owned at the operating unit level and not the global configuration owner
level, the operating unit on the transaction must match the tax regime setup.
Tax
The tax must be available for transactions and be within a valid date range for the tax.
Tax Status
1. Tax status must be available for transactions and fall within a valid date range for the tax.
2. Tax status must be set as the default tax status or have a tax status rule defined to derive the tax status.
1. Dates on the transaction must fall within those on the rate and jurisdiction.
2. Tax rate must be defined as a child to the tax status derived in the prior section.
3. If the tax rate is associated to a jurisdiction, the place of supply specified in your tax rule setup must
match that of your transaction. For example, if the taxing jurisdiction is British Columbia, Canada and
your place of supply is ship-to, then the ship-to address must be in British Columbia.
4. If the tax rate is associated to a jurisdiction, make sure the place of supply specified in your tax rules,
for example, ship-to is valid. Check the invoice and find the address corresponding to your place of
supply and identify the geography segment in that address that you are using for your jurisdiction.
Make certain a rate exists for the exact jurisdiction. Also make sure all jurisdiction tax rates are set as
Default to automatically calculate based upon the place of supply (as opposed to explicit tax rules
dictating when the tax should apply).
Note: If you exclusively use jurisdiction based rates, taxes will not be applied if the place of supply is
null. For this reason you should use caution if you choose ship-from or ship-to as your place of supply
in receivables. If you do set these as the place of supply then all invoices must have a warehouse or
ship-to address depending upon your setup. If your address is associated to a geography that has not
been properly defined in TCA, then you may also see the following Receivables message: System
cannot determine geographical information for this location and cannot derive a tax jurisdiction.
5. If the tax rate is not restricted to a jurisdiction, then a tax rate must exist with the jurisdiction as null
and the tax rate must be set up as default.
Note: If taxing regulations do not require a jurisdiction, then you should not link one to the tax rate.
Use of a jurisdiction on a rate mandates that an address must exist on the transaction to be taxed and
therefore restricts several features such as automated tax calculation on GL journal entries and tax
calculations on Miscellaneous Receipts in AR where no address is recorded.
Tax Rules
1. When implementing E-Business Tax you must specify default rules before taxes can be enabled.
Ensure that the default for Determine Tax Applicability is set to Applicable or that you have a rule
defined and enabled that makes the tax applicable for your specific transaction.
2. Ensure that the tax status and tax rate defaults are valid or that you have rules defined to properly
derive these values.
4. If you have defined tax rules using guided rule entry or expert rule entry, ensure that the determining
factor is available in the module where you are attempting to calculate tax. Not all determining
factors, condition sets and values can be used in all modules.
Note: For more on tax determining factors including sample rules defined for each tax factor review
Note 1108463.1, How Tax Determining Factors Work in R12 E-Business Tax and the Oracle E-
Business Tax User Guide.
1. Configuration Owner Tax Options are set in the Tax Managers responsibility under the defaults and
controls tab. Query the operating unit (or legal entity) where you have associated your tax regime. If
this is defined (optional setup), then verify the Allow tax Applicability check box is checked. Also
ensure that you have the proper tax determination method selected.
Intercompany transactions presently do not pass a ship-to address. Ensure that your tax rules for
intercompany transactions are flexible enough to derive the proper tax rate without reliance on ship-
to.
Transaction
1. If your tax considers ship-from in receivables, specify a warehouse on your transaction line. The same
is true if you have advanced rules defined referencing product fiscal classifications.
2. If you are using an upgrades setup, direct rate rule or if you configured rules to reference the tax
classification code, you must have a tax classification code set on your invoice line. Defaulting of this
field can be controlled in the Tax Managers responsibility under Application Tax Options.
3. Ensure the address on your transaction and for your legal entity and operating unit are valid.
Additional Considerations
E-Business Tax has the flexibility to specify complex tax rules at many levels. Rules can consider
fiscal classifications set at the party or product level, transaction classifications codes, and many
additional factors.
Using and Troubleshooting the Financial Tax
Register
Getting Started and Critical First Steps
Important: Before you attempt to use this report it is important that you apply the latest Tax
Reporting Ledger (TRL) patches. Refer to the Troubleshooting section that follows and Note
737320.1, Troubleshooting eBusiness Tax Reporting Issues in release 12.
This report allows you to report on both Output (sales transactions) and Input (purchase
transactions) tax for specified parameters.
Important: This report can render nearly all information required by customers for their tax reporting,
but only if the proper parameters are entered. Be sure you read and understand the impact of tax
parameters when using this report.
The output created for this report is presented through the RXi tool. RXi allows you to select the
fields you wish to see, add summary columns, totals and breaks. Additionally, you can select the
output format (HTML, CSV, Text, and so on) when running these reports. In most cases this data is
used for data analysis as RXi (unlike most other reports which use XML Publisher) does not have
the formatting capabilities to embed graphics such as a company logo or otherwise customize the
presentation.
Data selected for viewing in this report uses the Tax Reporting Ledger or TRL engine to gather data.
This same engine is used across a wide number of other R12 E-Business Tax reports.
The financial tax register report was created to provide a comprehensive and flexible framework that
you can use to analyze and report on transactions based on tax activities in Release 12.
Oracle Receivables
Oracle Payables
Important: Run this report from the forms UI to avoid receiving the AR_SRS_LEDGER_FLEXFIELD
has an incorrect validation type (P) error, which occurs if it is run from the Web UI.
Attribute Set
The Financial Tax Register is an RXi report that contains two predefined attribute sets. You can
create additional custom attribute sets as needed by copying and editing them. The seeded attribute
sets are:
Default: The Default attribute set contains all of the available attributes from the extract view. You
can use this attribute set to create new attribute sets. There is no predefined layout. Running the report
at this level with an output format of CSV is not recommended because the standard Excel workbook
does not have enough columns. Choose HTML to see all fields.
TaxReg: The TAXREG attribute set can be used for Oracle Payables, Oracle Receivables, and Oracle
General Ledger, or all products. The report contains the attributes most commonly included in Tax
Registers. It does not include discount amounts for Oracle Receivables and Oracle General Ledger.
Note: The reporting level selected changes the attributes that appear. This means that distribution
level attributes will not be displayed if the report is submitted at the transaction level. Similarly, some
transaction level details are shown as null (blank) if the report is submitted at the distribution level.
Output Format
RXi reports provide flexibility in selecting the format for viewing your output. Four options exist:
CSV: Also known as comma separated this output format is typically used when importing data into a
spreadsheet such as Microsoft Excel. Data will be truncated by Excel if the number of columns exceed
the capacity of your spreadsheet. Refer to the section that follows on customizing output to modify the
fields extracted.
HTML: This option produces output in an HTML table and is best viewed through a browser. This is
the recommended choice when exporting the Default attribute set as the table has no limitations on the
number of columns.
TAB: A good alternative to CSV in cases where your content may include a comma, for example, as
in description or text fields.
TEXT: Includes basic text output. This output format can be difficult to view as it may result in large
white spaces being produced on the page.
Note: If you are not using Multi-Org Access Control, the report ignores the Reporting Level and
Reporting Context parameters
Reporting Level
Ledger: The most broad setting, this method selects all tax data for transactions within a ledger.
Legal Entity
Operating Unit
Reporting Context
This LOV will render a list that is contextual to the reporting level selected, for example, a list of
operating units appears if you select Operating Unit.
Note: The data displayed in this LOV is further restricted by your security settings and or operating
unit restrictions defined in System Administrator.
Company Name
This parameter is available only when the reporting context is set as Ledger and is populated by a
list of Legal Entities for a given Ledger
The Currency LOV is restricted to the ledger currency. The ledger is identified by the Set of Books
profile option, the ledger reporting context (if selected) or the ledger that is defined for a Legal Entity
or Operating Unit.
For more on the Currency LOV refer to the value set ZX_TRL_LE_CA_CURRENCY.
Register Type
Interim Tax Register: Limits the output to Receivables transactions that are posted to the interim tax
account. A tax is posted to the interim account when the settlement option for the tax rate is set to
Deferred and the receivables invoice has not yet been paid.
Non-Recoverable Tax: Displays taxes sourced in both Payables and Receivables where the tax is not
recoverable.
Tax Register: Displays recoverable taxes, excludes any tax that is deferred (posted to the Interim tax
account).
Summary Level
Transaction Level
Note: Not all attributes specified in your attribute set will be displayed at all summary levels.
Distribution accounts for example are not rendered on the output when the report is run at the
Transaction level nor are line-level attributes.
Transaction Parameters
Product Select the application to report on or select All to report on all applications.
ALL
Oracle General Ledger
Oracle Payables
Oracle Receivables
Note: You must also select the Payables or Receivables parameters or no data appears in your
report output.
Transaction Number: Enter a specific transaction number to report on. The list of values for this field
depends on the Include options that you enable.
Include Discounts
Transfer to GL: You can report on transactions transferred to General Ledger, transactions not
transferred, or all transactions.
ALL
Not Transferred
Transferred
Accounting Status
Accounted
Unaccounted
Tax Type Low/High: The range of tax types to include in the report. If you are reporting on a specific
tax regime or tax, then the report uses the tax types belonging to this tax regime or tax only.
Tax Regime Code: Select a tax regime to report on, or leave blank to report on all applicable tax
regimes
Tax: Select a tax to report on, or leave blank to report on all applicable taxes.
Tax Jurisdiction: Select a tax jurisdiction to report on, or leave blank to report on all applicable tax
regimes.
Tax Status Code: Select a tax status to report on, or leave blank to report on all applicable tax regimes.
Tax Code Low/High: The range of applicable tax rate codes to include in the report
Payables Parameters
Include Prepayments
Receivables Parameters
Standard Yes/No option. You must set to Yes to see on the report output.
Include Invoices
Include Applications
Include Adjustments
AR Exemption Status: If you are reporting on Receivables transactions, select a tax exemption status
to report on.
Matrix Reporting should be used to show a single line in the Tax Reporting Ledger for two or more
tax amounts. Matrix Reporting can be used to support countries with multiple taxes (for example,
Canada) or to provide a breakdown of input taxes, showing both recoverable and non-recoverable
tax amounts on the same report line.
If Matrix Reporting is enabled, the Tax Reporting Ledger groups either of the following into a single
line:
Up to Two Input Taxes, each with a split between Recoverable and Non-Recoverable amounts.
Set to Yes if your attribute set includes accounting segments. Setting to No may help performance
and is advised if you do not have accounting segments in your attribute set.
When a TRL report is submitted, the main wrapper program is called. This wrapper code can take
many forms including Java, PL*SQL procedures or traditional Oracle Reports (RDFs). When a
request is submitted, you must enter parameters. The wrapper code often derives additional
parameters and then makes a call to invoke the TRL code.
When the TRL code is called, parameters are passed to a set of stored procedures. These
procedures extract data from the base table used by the product or products specified in the
parameters. TRL code then populates this information into a standard set of reporting tables.
The TRL data extract draws tax transaction data from these sources:
Payables Prepayments
End users do not need to understand how the Financial Tax Register works. They will analyze the
data rendered and ensure that it meets their expectations. However, it is critical for a Tax
Administrator or System Administrator to understand this design to maintain the most current tax
patches and thoroughly test all TRL reports for your instance. See the Troubleshooting section that
follows for more details.
1. User logs on as Tax Managers and submits the report, specifying parameters including an Attribute
Set and output format (HTML, CSV, and so on).
2. A concurrent request is created along with a spawned request. The spawned request name will be
RX:Only Financial tax Register. This spawned request represents the call to the TRL engine to seed
the reporting tables. This request produces no output. If however you are asked for a debug log, it is
this request id that should be used as the target for the query to extract logs as this is where all of the
data selection occurs. See Note 417238.1 for details on how to capture a debug log.
3. After the spawned request is completed, the RXi publisher is invoked. This publisher identifies the
attribute set entered when the report was submitted and uses the definition of the attribute set to select
and summarize the fields to be displayed. The data appears in the output format as specified.
Customizing a report is a task that typically requires a developer or someone skilled in Oracle XML
publisher. Because the Financial Tax Register uses the RXi engine, any user with the proper
permissions can modify the fields displayed, add summary columns and otherwise adjust the output
of this report.
While RXi is not able to generate the attractive end-user reports that XML publisher can create,
many financial analysts and tax managers prefer this format for the flexibility and ability to export
data into spreadsheet (CSV output).
This is accomplished by creating a new Attribute Set to be used by the RXi engine for publishing the
report output. This can be done following the instructions in the Oracle Financials RXi Reports
Administration Tool User Guide.
For information on setting up Financial Tax Register attribute set refer to Note 745943.1
Tax Reporting Ledger Column Descriptions in the Oracle E-Business Tax Reporting Guide for details
on each of the attributes available to include in the report and how they are used/displayed. Note again
that not all attributes are visible for all report types.
Note 973041.1, How To Configure The Financial Tax Register For Decimal Precision
Important: Do not select Financial Tax Register or RX-Only: Financial Tax Register as the report.
The Financial Tax Register spawns the RX-Only: Financial Tax Register Report. Selecting the
Financial Tax Register or RX-Only: Financial Tax Register results in the attribute sets from 11i being
updated instead of the R12 attribute set being displayed.
5. Remove the columns that you desire (limit the columns to match the number available in your version
of your spreadsheet solution if choosing CSV output).
6. Select Tools > Security and add the responsibilities permitted to access the attribute set.
7. Save.
Note: The attribute sets may only be visible from the forms based request submission.
To display tax amount like (XXX) instead of -XXX, you must define a format:
3. In the Report Name field enter RX-only: Financial Tax Register Report.
8. Select Currency Column. One more column is added that is Currency Column.
9. Navigate to any amount related field. For example, Taxable_amt in the Currency Column select.
Field not showing as available to pick: Not all tax related attributes are in the available attributes. For
example, one very significant field that is not available is Jurisdiction.
Field not showing up even though they are in the attribute set: The fields displayed are dependent
upon the level from which the report is submitted (distribution, transaction, line).
For example, in order for accounting information to appear you must submit the report as noted.
Submitting at any other level returns no data for the accounting fields.
Both the include_accounting_segments must be set to Yes and Summary level must be equal to
Transaction Distribution Level for accounting information to appear.
This report works by pulling data from the underlying tables used across GL, AP and AR. The steps
used to compile this data occur in the TRL source code. Verify you have the latest patches available.
Note 737320.1 (section 4) contains the latest patches released for this code. The note also includes
comprehensive troubleshooting steps for Release 12 Tax reports including the Financial Tax
Register.
Check to see if the data missing or incorrect on your report is also wrong in the underlying view
ZX_REP_EXTRACT_V: The view upon which attributes sets are defined. When submitting this
report with FND:Debug set to Yes, data is retained in the base tables summarized by this view. You
can query this view to see if data exists. If it does not exist you can then look to see if your
parameters are properly set. If parameters are properly set then the problem is almost certainly in
the TRL engine and database packages. If you find that the data appears correct in the view but
invalid in the display, check to see if your attribute set has proper grouping and other settings. Also,
test with one of the seeded attribute sets.
Cause: Check the level at which the report was run. When submitted at the transaction level, line
level details do not appear. Similarly, when run at the transaction level, distribution level details are
not shown.
Symptom: No Output when run for Reporting Set of Books
Cause: Set the profile option GL Ledger Name at the responsibility level.
1. Ensure you have gather scheme statistics running on a regular basis and that it includes the product
short name ZX.
2. Ensure that tax debug logging is not turned on. See Note 417238.1, if you are unsure of how this is
checked.
3. Ensure you have the latest TRL code patches applied from Note 737320.1.
4. Schedule the request Purge Logs and Closed System Alerts to run regularly. This will clear out the
debug log tables and reduce the size of the tables read by the report.
o ZX_REP_CONTEXT_T
o ZX_REP_TRX_DETAIL_T
o ZX_REP_TRX_JX_EXT_T
o ZX_REP_ACTG_EXT_T
These tables store data only when debug is enabled. They can grow large over time and periodically
purging them ensures that the size of the table does not interfere with the execution of individual
reports. Data in these tables is stored by concurrent request ID and is not used for any purpose except
to generate output for individual request submissions.
2. Transactions can be passed into the interface tables with a pre-calculated tax line.
Note: Oracle Applications that calculate tax typically generate an estimated tax in their respective
user interfaces (such as Order Management) but do not pass this tax line to AR. Taxes are
recalculated at the time of invoicing as this is the point where the tax liability is incurred.
Code Description
zxapdefvalpkgb.pls Used by the tax engine to derive tax attributes such as regime, status, rate and tax
AREBTUTB.pls Generic AR/EBTax integration package used by AutoInvoice, APIs and AR forms.
AREBTAIB.pls AutoInvoice specific package used to pass data from AR to EBTax for AutoInvoice proces
Use the following query to find your versions of the preceding files:
select text
from all_source
'ZX_PRODUCT_INTEGRATION_PKG', 'ZX_VALIDATE_API_PKG')
The first step in debugging tax calculations in AutoInvoice is always to validate that the taxes work
as expected in the Transaction Workbench form in AR. If they fail to work in the workbench form it is
easier and faster to diagnose the issue using the manual entry form.
Tip: When troubleshooting integration issues from OM you should be sure to attempt the replication
in AR by entering a transaction that includes an inventory item and warehouse.
If the problem cannot be replicated in the transactions form, advanced troubleshooting is required.
Just as with manual tax lines, this will involve the creation of a debug log. Follow the instructions
from Note 1079666.1 to create the required logs. Typically both the AutoInvoice debug log and the
tax (fnd) debug logs are required to troubleshoot these issues.
Note: Tax Debug logs are not the same as AutoInvoice debug logs. AutoInvoice will often return the
following message in the log file when E-Business tax fails: ERROR from eBusiness Tax - return
code = 2 is a generic error handling message that is returned by the E-Business Tax code to AR
AutoInvoice whenever an error happens during tax calculation. In order to troubleshoot this error a
tax debug log is required. The tax debug log shows why the error occurred.
Once created and exported to a text file or spreadsheet the log can be searched for error strings.
These can often be used in conjunction with the concurrent request log file and exception report to
keyword search and find known issues and fixes.
Note 745340.1, AutoInvoice Fails With Message "This Tax Rate Is Not Active"
Note 786000.1, Credit Memo's fail with "System Cannot find tax Rate"
Intercompany Taxes
Release 12 includes the Advanced Global Intercompany Invoice feature. This provides a
responsibility that is used to generate intercompany invoices. Once generated in AGIS, a workflow
background process is run to create the invoice in the AutoInvoice interface tables. AutoInvoice is
then run to generate the invoice in Oracle Receivables.
In order to keep the taxes in sync between AR and AP, the workflow process that populates the AP
interface table does not start until the AR invoices are complete. Once completed a business event
triggers the relevant transactional data to be passed to the AP interface tables including some of the
tax attributes from the AR record. Although some of these tax attributes stored on the AR transaction
are referenced by the workflow when the AP invoice is generated, the AP tax setup must be
complete in order for taxes to be in sync.
Note: Although the attributes are shared, AP code is separate from AR. If you find that the AR and
AP invoices are not in sync at the completion of the processing, then you should contact the AP
support team to evaluate your tax setup and rules.
The problem is typically that the tax rules have been defined to use the ship-to address but make no
allowance for bill-to to be used if a ship-to is not supplied. Since internal sales orders are not created
in AR with a ship-to address the tax rule fails to find a place of supply and taxes do not calculate.
Create a customization to copy the ship-to address to the ra_customer_trx_lines_all after it is sent
from inventory but prior to running AutoInvoice.
ERROR: from eBusiness Tax - return code = 2 Current system time is 08-SEP-2008
12:57:59
Please review the plsql debug log for additional details. Current system time
is 08-SEP-2008 12:57:59
...
arp_etax_util.calculate_tax_int()+
Error Message
The system cannot determine the default tax rate for tax and tax status . Please contact your tax manager either to s
tax status and date <Date> or to define appropriate rate determination rules.
Invalid tax exempt flag In release 12.0, when interfacing an order or RMA from OM to AR with the tax
(TAX_EXEMPT_FLAG) handling set to O for Override, the record is being rejected by AutoInvoice impor
with the message in the log file shown below: Invalid tax exempt flag
(TAX_EXEMPT_FLAG). If the system option Allow Exemptions = No then valid
values are S or R, otherwise the valid values are S, R or E (O). This issue was
caused by OM allowing the tax handling to be set to Override. The value O was
obsoleted in Release 12.
ORA-28115: policy with check The user was attempting to enter a tax line by clicking on the Tax The solution
option violation FRM- button from the exceptions form. This is not the proper way to add distribution li
40508:ORACLE error: unable tax lines to AutoInvoice. Manual tax lines can be added, however 731149.1 Th
to insert record the Tax button is provided only to show calculated taxes on records legacy applic
processed by the interface and not to add tax lines. be performed
calculate an
re-calculate
For more information, refer to Note 751126.1, Troubleshooting AutoInvoice Tax Issues with R12 E-
Business Tax (EBTax).
Important: The message number and message code are used in the code to generate the message
in a form or report. These are listed to assist with debugging.
426011 The system cannot determine the default tax rate Based on the info
ZX_DEFAULT_RATE_NOT_FOUND for tax &TAX and tax status &TAX_STATUS provided for the tr
Please contact your tax manager either to specify system could not
a default tax rate code for this tax status and date rate for the applic
&DATE or to define appropriate rate determination because either sy
rules. find any default ta
applicable tax and
tax rate determina
not be successful
426012 The system could not determine the applicable Based on the info
ZX_RATE_NOT_FOUND Tax Rate for Tax &TAX and Tax Status provided for the tr
&TAX_STATUS Please contact your Tax system did not fin
Administrator to ensure that either a default Tax defined for an app
Rate Code that is effective on &DATE is specified tax status in the c
for this Tax Status or the appropriate Rate determination dat
Determination Rules are defined. calculated withou
426013 The system could not determine the applicable Based on the info
ZX_STATUS_NOT_FOUND Tax Status for Tax &TAX. Please contact your provided for the tr
Tax Administrator to ensure that either a default system did not fin
Tax Status is specified for this Tax or the defined for an app
appropriate Status Determination Rules are the context of the
defined. determination dat
be calculated with
status.
426014 The system cannot determine the tax for this Based on the info
ZX_COMPND_TAX_NOT_FOUND transaction because the compounding tax &TAX provided for the tr
for formula code &FORMULA_CODE is not system determine
applicable. Please contact your tax manager. tax. It has a asso
formula for derivin
basis, which in tu
dependency on o
compounding. Ho
dependent tax is
(no defaults or no
transaction date.
426015 The system cannot determine the offset tax rate Based on the tran
ZX_OFFSET_RATE_NOT_FOUND for tax regime &TAX_REGIME, tax &TAX, tax information, the s
status &TAX_STATUS and tax rate code determined that a
&TAX_RATE_CODE. Please contact your tax is applicable for c
manager. regime, tax, statu
code. However, th
not determine the
tax rate for a give
date.
426016 The system could not determine a valid Recovery Based on transac
ZX_REC_RATE_CODE_NOT_FOUND Rate Code for the Tax Regime ®IME_NAME, the system found
Content Owner &CONTENT_OWNER, Tax applicable tax is r
&TAX_NAME and Recovery Type However for a co
&RECOVERY_TYPE. Please contact your Tax configuration own
Administrator to ensure that a valid default and recovery type
Recovery Rate Code is defined for this Regime, not be calculated
Content Owner, Tax and Recovery Type. tax the tax does n
default recovery r
associated with it
426017 The system could not determine a valid Recovery Based on the tran
ZX_REC_RATE_NOT_FOUND Rate for the Tax Regime ®IME_NAME, information, the ta
Content Owner &CONTENT_OWNER, Tax could not be proc
&TAX_NAME, Recovery Type system is unable
&RECOVER_TYPE and Recovery Rate Code recovery rate in th
&RECOVERY_RATE_CODE. Please contact your tax regime, config
Tax Administrator to ensure that a valid Recovery tax, recovery type
Rate is defined for this Regime, Content Owner, transaction date.
Tax, Recovery Type and Recovery Rate Code.
426018 The system cannot find tax regime information for Based on the tran
ZX_TAX_REGIME_INFO_NOT_FOUND tax regime &TAX_REGIME. Please contact your information, the a
tax manager. could not be proc
system could not
valid regime for th
date.
426019 The system cannot find tax status information for Based on the tran
ZX_TAX_STATUS_INFO_NOT_FOUND tax regime &TAX_REGIME, tax &TAX_CODE and information, the a
tax status &TAX_STATUS. Please contact your could not be proc
tax manager. system could not
valid tax status on
date.
426020 The system cannot find tax rate information for Based on the tran
ZX_TAX_RATE_INFO_NOT_FOUND Tax regime: &TAX_REGIME, Tax: &TAX_CODE, information, the a
Tax status: &TAX_STATUS , Tax rate code: could not be proc
&TAX_RATE_CODE and Tax Jurisdiction code: system could not
&TAX_JURISDICTION_CODE. Please contact valid tax rate for t
your tax manager. date.
426021 The system cannot find tax information for tax Based on the tran
ZX_TAX_INFO_NOT_FOUND regime &TAX_REGIME and tax &TAX. Please information, the a
contact your tax manager. could not be proc
system could not
valid tax for the tr
426022 This Tax Regime Code is not valid on the The tax regime us
ZX_REGIME_NOT_EFFECTIVE transaction date. imported tax line
the given transac
effective regimes
considered for pro
426023 This Tax Rate is not valid for the transaction date. The tax rate spec
ZX_TAX_RATE_NOT_EFFECTIVE imported tax line
context of the tran
426024 This Tax Status Code is not valid for the The tax status sp
ZX_TAX_STATUS_NOT_EFFECTIVE transaction date. imported tax line
the given transac
426025 This Tax is not valid for the transaction date. The tax specified
ZX_TAX_NOT_EFFECTIVE tax line is not vali
transaction date.
effective then the
line will not be pro
426026 This tax status code does not exist. The tax status pro
ZX_TAX_STATUS_NOT_EXIST imported tax line
for a combination
owner, regime an
valid status the im
cannot be proces
426028 This Tax Regime Code does not exist. The tax regime sp
ZX_REGIME_NOT_EXIST imported tax line
The provided reg
for it to get proces
426029 This Tax Rate does not exist. The tax rate spec
ZX_TAX_RATE_NOT_EXIST imported tax line
The provided tax
existing to get pro
426030 The Place of Supply Type for the Tax &TAX was The location infor
ZX_POS_MISSING_ON_TRX determined as &POS_TYPE. Please enter a associated with th
&POS_TYPE on the transaction. supply type for th
is not provided on
Unless the releva
supply type is pro
applicable tax can
calculated.
426031 This Tax is not enabled for processing. The tax indicated
ZX_TAX_NOT_LIVE tax line is not turn
processing. Unles
live, it will not be
processing.
426032 The system cannot prorate this tax amount Based on the info
ZX_HDR_CTRL_TOTAL_TAX_MISMATC because the header level control tax amount is provided for the tr
H not equal to 0, but the total calculated tax amount system calculated
for this transaction is 0. Please contact your tax zero but the user
manager. adjustment amou
zero.
426033 The system cannot calculate the taxable basis for The system cann
ZX_IMP_TAX_RATE_AMT_MISMATCH the imported tax line because the tax rate is 0 but taxable basis for
the tax amount is not 0. Please change either the line because the
tax rate or the tax amount. is zero. However,
is not zero. Tax ra
amount should m
426034 An imported tax line cannot be allocated to the When a tax line is
ZX_IMPTAX_MULTIALLOC_TO_SAMELN same transaction line more than once. cannot be allocat
transaction line m
For example, one
line can be alloca
transaction line o
combination of re
should be unique
transaction line.
426010 The Tax Liability account has not been set up for Based on the tran
ZX_INVALID_LIAB_CCID either the tax rate or the account source tax rate information the sy
for the self assessed tax. Please enter it in the determined the se
Tax Recoverable/ Liability account field using the but distributions f
Tax Rate Accounts window. cannot be genera
recoverability/ liab
not been defined
level.
426035 The system cannot prorate this tax amount Based on the info
ZX_LN_CTRL_TOTAL_TAX_MISMATCH because the line level control tax amount is not provided for the tr
equal to 0, but the total calculated tax amount for system calculated
this transaction line is 0. Please contact your tax zero but the user
manager. adjustment amou
426036 The system cannot prorate the line level control The system cann
ZX_LN_CTRL_TOTAL_TAX_NOT_EXIST tax amount because there is no applicable tax for line level tax adju
this transaction line. Please contact your tax as there is no app
manager. found for this tran
system to pro rate
amount, there mu
tax.
426038 There is no subscription for this tax regime code The tax regime sp
ZX_REGIME_NOT_EFF_IN_SUBSCR for the given transaction date. imported tax line
valid subscription
unit or legal entity
transaction date.
426039 The UOM &UOM_RATE for quantity rate While defining tax
ZX_UOM_NOT_MATCH &RATE_CODE does not match the UOM specify the UOM.
&UOM_TRX on the transaction line. tax rate will be ca
the UOM mention
matches with the
in the transaction
transaction, the U
does not match w
associated with th
426008 ZX_INVALID_REC_CCID The Tax Recoverable/ Liability account has not The calculated ta
been setup for either the tax rate or the account accounted as the
source tax rate. Please enter it using the Tax Rate liability account h
Accounts window. setup for either th
account source ta
this account is sp
recoverability or l
accounted and in
can not be compl
426041 A Party Tax Profile does not exist for this Bill The bill from party
ZX_BILFROM_PARTY_NOT_EXIST From Party. transaction does n
profile. tax related
to parties in the tra
in party tax profile.
profile, system is u
the tax calculation
party.
426042 A Party Tax Profile does not exist for this Bill The bill from party
ZX_BILLFROM_PARTYSITE_NOTEXIST From Party Site. transaction does n
profile. tax related
to party sites are s
tax profile. Without
system will not be
the tax calculation
party site.
426043 A Party Tax Profile does not exist for this Bill The bill to party sit
ZX_BILLTO_PARTY_SITE_NOT_EXIST To Party Site. transaction does n
profile. tax related
to party sites are s
profile. Without a p
system will not be
the tax calculation
party site.
426044 A Party Tax Profile does not exist for this Bill The bill to party pro
ZX_BILTO_PARTY_NOT_EXIST To Party. transaction does n
profile. tax related
to party to the tran
in party tax profile.
profile, system will
determine the tax c
parameters for tha
426045 Default values have not been defined for this The tax could not b
ZX_COUNTRY_DEFFAULTS_NOT_EXIST country. the specific countr
defaults have not b
Oracle E-Business
defaults can be us
country related tax
426046 Please enter the currency code and precision. The currency code
ZX_CURRENCY_INFO_REQD details not specifie
level. Tax precision
maximum number
used to calculate t
426047 This Fiscal Classification Code is not valid for The fiscal classific
ZX_DOC_FC_CODE_NOT_EFFECTIVE this DOCUMENT_SUBTYPE Fiscal on the imported tra
Classification Type Code for the transaction valid for the releva
date. type fiscal classific
transaction date. W
document fiscal cla
the rule based on t
subtype will not be
426048 This Fiscal Classification Code is not defined The fiscal classific
ZX_DOC_FC_CODE_NOT_EXIST for this DOCUMENT_SUBTYPE Fiscal on the imported tra
Classification Type Code. defined for the rele
sub-type fiscal clas
426049 This Fiscal Classification Code is not valid for The fiscal classific
ZX_DOC_FC_COUNTRY_INCONSIS this DOCUMENT_SUBTYPE Fiscal on the imported tra
Classification Type Code for the specified valid for the docum
country. specified country.
426050 This party fiscal classification code is not The party fiscal cla
ZX_FC_CODE_PARAM_NOT_EXIST associated with a party Classification Code. provided on the im
not defined for any
classification.
426051 This fiscal classification type code is not The fiscal classific
ZX_FC_INV_CAT_NOT_EXIST associated with an inventory category set. provided on the im
does not have an i
set associated with
426052 This Fiscal Classification Code is not defined The intended use f
ZX_INTENDED_USE_CODE_NOT_EXIST for this INTENDED_USE Fiscal Classification code provided on t
Type Code. line is not defined
use fiscal classifica
426053 This fiscal classification code is not valid for The fiscal classific
ZX_INTENDED_USE_COUNTRY_INCON this intended use fiscal classification type code in the transaction i
for the specified country. intended use fisca
code for the specif
426054 This Fiscal Classification Code is not valid for The fiscal classific
ZX_INTENDED_USE_NOT_EFFECTIVE this INTENDED_USE Fiscal Classification on the imported tra
Type Code on the transaction date. intended use class
for the transaction
426009 The Tax Expense account has not been set up The user has not d
ZX_INVALID_NREC_CCID for either the tax rate or the account source tax expense account f
rate. Please enter it using the Tax Rate tax rate.
Accounts window.
426055 This Tax Jurisdiction Code not valid for the The tax Jurisdictio
ZX_JUR_CODE_NOT_EFFECTIVE transaction date. provided on the im
effective for the tra
426056 This Tax Jurisdiction Code is not valid. The tax jurisdiction
ZX_JUR_CODE_NOT_EXIST the imported tax lin
for the transaction
426058 A Party Tax Profile does not exist for this Party. The party tax profi
ZX_PARTY_NOT_EXISTS the party provided
tax related informa
parties in the trans
party tax profile. U
exists system will n
determine the tax c
parameters for tha
426059 A party tax profile does not exist for this party. Party tax profile do
ZX_PTP_ID_NOT_EXIST party provided in th
426060 This Fiscal classification Code is not valid for The fiscal classific
ZX_PRODUCT_CATEG_COUNTRY_INCON this PRODUCT_CATEGORY Fiscal in the imported line
Classification Type Code for the specified product category ty
Country. specified country.
426061 This fiscal classification code is not valid for The fiscal classific
ZX_PRODUCT_CATEG_NOT_EFFECTIVE this product category fiscal classification type on the imported tra
code for the transaction date. valid for this produ
classification type
transaction date.
426062 This Fiscal Classification Code is not defined The fiscal classific
ZX_PRODUCT_CATEG_NOT_EXIST for this PRODUCT_CATEGORY Fiscal on the imported ta
Classification Type Code. for the specific pro
code.
426063 This product type code does not exist. The product type c
ZX_PRODUCT_TYPE_CODE_NOT_EXIST the imported trans
exist on the transa
426065 This Product Type Code is not valid for the The product type c
ZX_PRODUCT_TYPE_NOT_EFFECTIVE transaction date. the imported trans
valid for the transa
426067 The system has determined that the Rate Type The rate type dete
ZX_RATE_FORMULA_MISMATCH &RATE_TYPE is applicable for Tax &TAX on system for the app
this transaction. However, this Rate Type is not transaction is not c
compatible with the Taxable Basis Type relevant taxable ba
&TAXABLE_BASIS_TYPE for Formula Code applicable tax form
&FORMULA_CODE. Please contact your Tax
Administrator.
426068 A Party Tax Profile does not exist for this Ship The ship from part
ZX_SHIP_FROM_PARTY_NOT_EXIST From Party. transaction does n
profile. Tax related
to parties in the tra
in party tax profile.
profile, system is u
the tax calculation
party.
426069 A Party Tax Profile does not exist for this Ship Ship to party provi
ZX_SHIP_TO_PARTY_NOT_EXIST To Party. transaction does n
profile. tax related
to parties in the tra
in party tax profile.
profile, system is u
the tax calculation
party.
426070 A Party Tax Profile does not exist for this Ship The tax could not b
ZX_SHIPFROM_PARTYSITE_NOTEXIST From Party Site. ship from party site
transaction does n
profile. tax related
to parties in the tra
in the party tax pro
tax profile, system
determine the tax c
parameters for tha
426071 A Party Tax Profile does not exist for this Ship The ship to party s
ZX_SHIPTO_PARTY_SITE_NOT_EXIST To Party Site. transaction does n
profile. tax related
to party sites are s
tax profile. Without
system is unable to
calculation parame
426072 The sum of the Percentage Recovery Rates for For a combination
ZX_SUM_REC_RATE_OVER the applicable Recovery Types the percentage tot
&RECOVERY_TYPE_1 and recovery types (1 a
&RECOVERY_TYPE_2 for the Tax Regime than 100. For a pa
®IME_NAME and Tax &TAX_NAME is associated recove
greater than 100. than 100.
426073 This Tax Rate Percentage is invalid. The tax rate perce
ZX_TAX_RATE_PERCENTAGE_INVALID the imported trans
valid.
426077 This Fiscal Classification Code is not valid for The user defined f
ZX_USER_DEF_COUNTRY_INCONSIS this USER_DEFINED Fiscal Classification provided on the im
Type Code for the specified Country. line is not associat
specified in the tra
426078 This Fiscal Classification Code is not valid for The user defined f
ZX_USER_DEF_FC_CODE_NOT_EFFECT this USER_DEFINED Fiscal Classification provided on the im
Type Code for the transaction date. line is not effective
date.
426079 This Fiscal Classification Code is not defined The user defined f
ZX_USER_DEF_FC_CODE_NOT_EXIST for this USER_DEFINED Fiscal Classification code provided on t
Type Code. transaction line is n
user defined fiscal
code.
426080 You cannot delete this tax line either because The selected tax li
ZX_CHILD_FROZEN associated distributions were posted to the deleted as it has a
general ledger or the corresponding transaction accounted and pos
line is paid. Please contact your tax manager. Ledger or the corre
transaction line ha
426084 The tax inclusive handling of the imported tax The tax inclusive h
ZX_TAX_INCL_FLAG_MISMATCH line does not match the tax inclusive handling imported tax line is
of the tax. inclusive handling
Oracle E-Business
426085 Tax lines with the same Tax Regime and Tax The same combina
ZX_TAX_MULTIALLOC_TO_SAMELN cannot be allocated to the same transaction tax cannot be alloc
line more than once. once to single imp
line, such as one t
cannot have more
from same regime
426086 This Tax Rate Code is either Recovery Rate or The code provided
ZX_TAX_RECOV_OR_OFFSET an Offset Rate tax line is either a
or an offset tax rat
actual tax rate cod
processed.
Note: Refer to Note 744185.1, eBusiness Tax Release 12 Error Messages: Causes and Actions.
1. (N) E-Business Tax > Defaults and Controls > Tax Reporting Types > Create.
3. Select tax reporting type in the Reporting Type Purpose drop down.
5. Enable the Reporting Type Use for Tax Rate. Any other reporting type use should not be selected for
Intra EU Transaction Type.
7. Regime and tax are not mandatory parameters. If entered, reporting codes are specific to that regime
and tax.
8. Enter appropriate tax reporting codes according to user requirements. These codes are available as
selection parameters for filtering transactions in the ESL report.
Reporting Codes for Triangulation transactions may not be required for all EU countries.
Follow codification requirements of each country while defining the reporting codes and description.
3. Select legal justification message type in the Reporting Type Purpose drop down.
4. The Date Type Should Be Text and Define List of Reporting Codes check boxes are automatically
selected.
5. Regime and tax are not mandatory parameters. If entered, reporting codes are specific to that regime
and tax.
6. Reporting Type Use is automatically enabled only for Tax Rate. No other reporting type use should be
selected.
Note: Legal Justification Text (maximum 240 characters) is printed on the invoice as per the
template created in BPA.
Associate Intra EU Transaction Type and Legal Justification Reporting Codes to Tax Rate
Code
2. Enter the appropriate regime, configuration owner, tax and status information.
3. Specify tax rate code and percentage rate as zero (existing/upgraded tax rate code can also be
updated).
4. (N) Rate Details > Tax Reporting Codes > Specify the Tax Reporting Type Code and Reporting
Codes created for Intra EU Transaction Type in the preceding example (UK-INTRA-EU-SERVICES).
5. (N) Rate Details > Legal Justification Message Reporting Codes > Specify the Legal Justification
Reporting Type Code and Reporting Codes created in preceding example ((UK-INTRA-EU-
SERVICES).
6. Only one effective legal justification reporting type can be associated to a tax rate.
Set Up in E-Business Tax for Payables
Buyer of services (in Germany) must create a reverse charge on the Payables invoice line for such
Intra EU services. This can be achieved by calculating the offset tax associated to the applicable
German tax or by configuring the self assessed tax setup for German Tax.
1. Configure Regime to Rate flow for the applicable tax in supplier (Germany) country (existing/updated
Regime to Rate can also be used).
2. Specify the Tax Rate percent (19% or the applicable Tax Rate).
4. For the offset tax rate code specify the tax rate percent equal to negative of the actual tax rate (-19% or
the applicable tax rate).
5. When the applicable tax is calculated, the associated offset tax is automatically calculated.
6. Alternatively, instead of offset tax, the self-assessed tax can be configured to create a reverse charge
on the Payables invoice line.
(N) Bill Presentment Architecture > Template Management > Create a new template that contains
the following content (existing/upgrade template can also be modified):
E-Business Tax provides a single point solution for managing your transaction-
based tax requirements. E-Business Tax uniformly delivers tax services to all E-
Business Suite business flows through one application interface. As a global
system architecture, E-Business Tax is configurable and scalable for adding and
maintaining country-specific tax content.
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Pre-Requisites
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If this is checked, then the OU is set to use the subscription from Legal Entity.
The regime is then subscribed (in a later step) to the First Party Legal Entity
rather than the Operating Unit Owning Tax Content.
This is a one time setup and the value cannot be toggled. So enable this only
after you determine you want to use this setup.
In our case its Checked and therefore we need to set our Tax Regime up
against First Party Legal Entity and NOT against the Operating Unit
Steps
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If ‘Use Subscription of the Legal Entity’ was unchecked then Party Type would
have been “Operating Unit Owning Tax Content”
Also select ‘Configuration for Taxes and Rules’ as “Common Configuration” &
Effective date.Then click Finish button.
Step 2: Create Tax
Enter the details as shown in below screenshot and then click on Show
Controls and Defaults
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2. Enter the following information under Show Controls and Defaults section :
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Note: Enter Tax Regime created in step 1 & Tax created in step2
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Then click on Rate Details button and scroll down to other details
section.Enable “Set as Default Rate” and set the Effective From date.
3. Click apply so it comes to Create Tax Rate page and then click Apply button
again.
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3. Search for our OU’s Ledger and click Create button.
4. Enter the Operating Unit and Tax Expense & Tax Recoverable/Liability
account
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5. Click Apply button so it will come to Tax Accounts page and click Apply
button again.Again once more click Apply button.
2.Click the pencil icon in the Set Default column to change any of the defaults
defined.Update the defaults as follows:
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Step 8: Make Tax Available for Transaction
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Note:It might throw warning “This tax does not have an exchange rate type.
Are you sure you want to enable this tax?”,click Yes button for this since we
know we didn’t enter an exchange rate type.
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Testing
1. Create an invoice with Ship-To location at line level containing an United
States location.Save the invoice after entering the distribution details and click
on Calculate Tax Button.Now you can see the Tax line created at Line Level.
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Case Study – 1
Business Requirement: Calculation of USE TAX in AP Invoices based on Ship To Location Zip
code and Balancing Segment of Chart of Accounts.
The requirement of client was as follows:
Use tax was calculated in an AP Invoice based on the combination of the balancing segment in
the chart of accounts and the zip code of a ship to location.
In 11i different sales tax codes were setup for each combination of balancing segment and ship
to location. An offset tax code was attached to each of the sales tax code.
For an invoice where use tax was applicable the user would enter the sales tax code (which has
been attached to an offset tax code) and validate the invoice. This would generate two tax lines
one each for sales tax and offset tax.
After the upgrade to Oracle R12; Use tax can be applied on an invoice in two ways:
1. Similar to 11i make sales tax and offset tax codes to generate the use tax lines in the AP
invoice.
1. Use feature of Self Assessed tax (newly introduced in R12) for accounting of use tax
lines. Concept of Self Assessed tax is explained later in the document.
In this case study we have used option 2 as the base.
Detailed setups performed
1. DEFINE TAX REGIME
Responsibility & Navigation:
Tax Managers – Tax Configuration – Tax Regime – Create
Define one tax regime for country United States as shown below:
2. DEFINE TAXES
Define one tax called US USE TAX under the tax regime created for United States
Responsibility & Navigation:
Tax Managers – Tax Configuration – Taxes – Create
Click on Apply to save the changes
3. DEFINE TAX STATUSES
Define one tax status for the tax regime and tax setup in the previous steps.
Responsibility & Navigation:
Tax Managers – Tax Configuration – Tax Statuses – Create
Click on Tax Accounts to enter the Expense and liability account details
Enter the Tax Expense Account. If this is left blank the expense account for ITEM line will be
used.
The Tax Recoverable/Liability is the Use tax Liability Account to be used.
6. DEFINE TAX RULES
Oracle provides a seeded set of Tax Rules which can be used by the user for tax calculation.
For any transaction made the tax determination process uses these tax rules to decide the
taxes which will apply and the amount of tax which has to be applied for a transaction.
Prerequisites for setting up the Tax Rules:
Step1:
To decide whether use tax applied on any transaction within Payables module a tax
classification code called USE TAX APPLICABLE will be made. A tax classification code is
similar to a tax rate code with a tax rate of 0%.
Responsibility & Navigation:
Tax Managers – Tax Configuration – Tax Rates – Create
Step2:
Create Geography Hierarchy:
The various zipcodes which will be used in the tax rules have to be setup in the geography
hierarchy in the trading community architecture.
Responsibility & Navigation:
Trading Community Manager à Administration à Geography Hierarchy
Query for country United States in the below screenshot
Enter the different cities for the county and click on View Details to enter the zip code for each
city.
Enter the zip codes which will be used for tax calculation with the code type as “Tax Geography
Code”. Click on Apply after creating/updating any changes
Step3: Create Tax Determining Factor Sets
Responsibility & Navigation:
Tax Managers – Advanced Setup Options – Tax Determining Factor Sets – Create
The tax condition set is made from the tax determining factor set. In the above screenshot we
have made a tax condition set for balancing segment CIP and postal code 62201 using the
determining factor set made in the above set.
TAX RULE SETUP
Responsibility & Navigation:
Tax Managers – Tax Configuration – Tax Rules
The following tax rules will be setup for use tax calculation:
1. Determine Tax Applicability: Since the tax US_USE applies only for use tax we make
this tax applicable only if the tax classification code in the invoice for an ITEM line is “USE TAX
APPLICABLE”
2. Determine Tax Rate – This rule will derive the use tax rate for the invoices using the
determining factor set and condition set. While making the tax rule we enter the determining
factor set and the condition set made in the previous steps as shown in below screenshot.
For each condition set there will be a different tax rate which will be applied.
Example:
As shown in above screenshot there are 4 condition sets:
1. COND_CIP_62201 – This means that the balancing segment is CIP and ship to postal
code is 62201. If the invoice satisfies these two conditions and the tax classification code is
USE TAX APPLICABLE the tax rate used will be USE_CIP_62201.
1. COND_AMC_63103 – This means that the balancing segment is AMC and ship to postal
code is 63103. If the invoice satisfies these two conditions and the tax classification code is
USE TAX APPLICABLE the tax rate used will be USE_AMC_63103.
For all the other rules the default values have been used.
7. CONCEPT OF SELF ASSESSED TAX
A self-assessed tax is a tax calculated and remitted for a transaction, where tax was not levied
by the supplier but is deemed as due (and therefore needs to be paid by the purchaser).
In such cases the purchaser is responsible for calculating and remitting the tax. Self-
assessment is also known as reverse charge or use tax in certain tax regimes.
When self-assessment applies to a tax line, E-Business Tax creates the recoverable and/or
non-recoverable distributions, and Payables creates an additional accounting distribution to
record the liability for the self-assessment.
You can set the self-assessment option:
• At the tax profile level to default to the tax registrations that you create for this party.
• At the tax registration level.
• On an individual tax line.
E-Business Tax applies self-assessment to Payables invoices received by the first party
according to the tax registration setting of the Set for Self Assessment/Reverse Charge option.
The specific tax registration record that E-Business Tax uses is derived either from Determine
Tax Registration rules or from the default tax registration.
We have setup the self assessed tax feature at the Tax Registration level.
Navigation: Tax Managers – Home – External Dependencies – Create First Party : Legal Entity
and Establishments
Query the Legal Entity -View Details – Establishments Tab – Query Establishment (which is the
OU here) – Registrations – Create Tax Registration
Since we are using the self assessed tax feature only for use tax invoices we set up this option
for the tax US_USE only. Other taxes will not have this flag checked.
Case Study – 2
Business Requirement: Calculation of SALES TAX in AP for Invoices made from source ERS
based on Supplier site pin code
The requirement of client was as follows:
There were many invoices created in AP using the ERS source i.e create the PO and Receipt in
Purchasing module and then run the “Pay on Receipt” program to generate the invoice in
interface tables with source as ERS.
The standard Payables Open Interface Import program will then import these invoices into base
oracle.
Sales tax applies on some of these ERS transactions based on the zip code of supplier site.
For instance: An ERS invoice with a supplier site A having zip code 63301 has a tax rate of 10%
to be applied where as supplier site B having zip code 62284 has a tax rate of 6% to be applied.
Since the ERS invoice which is inserted into the interface table consists of only ITEM line we
needed to insert one more TAX line with the correct amount. Additionally the total invoice
amount also has to be corrected to include the tax amount.
Detailed setups performed for the same.
1. DEFINE TAX REGIME
Responsibility & Navigation:
Tax Managers – Tax Configuration – Tax Regime – Create
Define one tax regime for country United States as shown below:
Enter the Tax Expense Account. If this is left blank the expense account for ITEM line will be
used.
The Tax Recoverable/Liability is the Use tax Liability Account to be used. Since this is a sales
tax rate we enter the default account of 000 for the same.
6. DEFINE TAX RULES
Oracle provides a seeded set of Tax Rules which can be used by the user for tax calculation.
For any transaction made the tax determination process uses these tax rules to decide the
taxes which will apply and the amount of tax which has to be applied for a transaction.
Prerequisites for setting up the Tax Rules:
Step1:
To decide whether use tax applied on any transaction within Payables module a tax
classification code called SALES TAX APPLICABLE will be made. A tax classification code is
similar to a tax rate code with a tax rate of 0%.
Responsibility & Navigation:
Tax Managers – Tax Configuration – Tax Rates – Create
The tax condition set is made from the tax determining factor set. In the above screenshot we
have made a tax condition set for postal code 61548 and tax classification code SALES TAX
APPLICABLE using the determining factor set made in the above set.
TAX RULE SETUP
Responsibility & Navigation:
Tax Managers – Tax Configuration – Tax Rules
The following tax rules will be setup for use tax calculation:
3. Determine Tax Applicability: Since the tax US_SALES applies only for ERS Sales Tax
we make this tax applicable only if the tax classification code in the invoice for an ITEM line is
“SALES TAX APPLICABLE”
4. Determine Tax Rate – This rule will derive the sales tax rate for the invoices using the
determining factor set and condition set. While making the tax rule we enter the determining
factor set and the condition set made in the previous steps as shown in below screenshot.
For each condition set there will be a different tax rate which will be applied.
Example:
As shown in above screenshot there are 4 condition sets:
1. COND_SALES_63119 – This means that if the ship from postal code is 63119 and the
tax classification code in the invoice is SALES TAX APPLICABLE then the tax rate used will be
SALES_63119.
1. COND_SALES_61548 – This means that if the ship from postal code is 61548 and the
tax classification code in the invoice is SALES TAX APPLICABLE then the tax rate used will be
SALES_61548.
For all the other rules the default values have been used.
7. INVOICE CREATION AND SALES TAX CALCULATION FOR ERS INVOICE.
Generate the ERS invoice in the invoice interface tables using the program Pay on Receipt
program.
Update the following values for the ERS invoice in the interface table:
TAX CLASSIFICATION CODE – SALES TAX APPLICABLE
CALCULATE TAX AMOUNT DURING IMPORT – Set the flag to Y
ADD TAX TO INVOICE AMOUNT – Set the flag to Y
The calculate tax amount flag and add tax to invoice amount is set to Y so that the Payables
Open Interface Import program would trigger tax rules and calculate the tax amount and also
add the tax amount to the invoice amount. Hence the invoice will be imported with the tax line
and correct invoice amount.
Following is the update script for the same:
UPDATE apps.ap_invoices_interface
SET add_tax_to_inv_amt_flag = ‘Y’
AND calc_tax_during_import_flag = ‘Y’
WHERE source = ‘ERS’
UPDATE apps.ap_invoice_lines_interface
SET tax_classification_code = ‘SALES TAX APPLICABLE’
WHERE invoice_id IN (SELECT invoice_id
FROM apps.ap_invoices_interface
WHERE SOURCE = ‘ERS’)
Snapshots of ERS invoices in the interface table.
Invoice header in the interface table before it was processed.
After importing this invoice; the tax line has got generated based on the tax rule for Supplier
site. The invoice amount has also changed from 1000 to 1073.50
E-Business Tax to set up and maintain your transaction tax requirements in all geographic locations
where you do business. You can set up tax configurations to include the rules, default values, and
other information necessary for each separate tax requirement. At transaction time, E-Business Tax
uses your tax configuration to determine the taxes that apply to each transaction and to calculate the
tax amounts.
The tasks involved in setting up a tax requirement in E-Business Tax fall into three general
categories:
1. Setting up transaction taxes.
2. Completing all of the setups and settings related to the processing of taxes on transactions.
3. Setting up tax rules and defaults to manage tax processing.
A sales and use tax in the United States includes rules for state, county, and city sales and
use taxes.
An excise tax regime in India includes rules for excise tax and additional excise tax.
A VAT tax regime in Argentina includes rules for standard VAT, additional VAT, and
perception VAT.
Example in UG, in Argentina there is a tax similar to European VAT called Impuesto al Valor
Agregado (IVA). There is another tax called Impuesto al Valor Agregado Adicional, levied on
unregistered customers. These two charges are together commonly referred to as IVA. However, in
your tax configuration you define these charges as two
different taxes under the one tax regime called, for example, IVA-Argentina. This configuration
specifies that a company may charge two taxes--IVA and IVA Adicional--but these two charges are
levied by the same tax authority and the company receives only one tax registration for both taxes.
In the example above, you define the IVA-Argentina tax regime to contain the taxes IVA and IVA
Adicional. You can then define the tax registrations that your company, customers, and suppliers
have for this tax regime, instead of defining tax registrations for the individual taxes.
Thus, although UK VAT, French TVA, and Argentine IVA are all value added taxes, you define each
as a separate tax regime with one or more taxes under each regime for the applicable country.
Tax
“A distinct charge imposed through a fiscal or tax authority”
Examples of a tax include VAT for the United Kingdom and TVA for France.
Tax Jurisdiction
“A geographical area where a tax is levied by a specific tax authority or where a specific tax rate
applies”
A tax jurisdiction is limited by a geographical boundary that encloses a contiguous political or
administrative area, most commonly the borders of a country. For example, the countries of UK,
France and Argentina serve as the respective tax jurisdictions for their VAT tax regimes and related
taxes.
Often this contiguous political or administrative area falls within a country, such as a state, province,
city or a county tax jurisdiction; examples include US state sales tax and Canadian Provincial Sales
Tax (PST). In countries where you define tax jurisdictions at a level lower than the country level , you
typically need to define tax registrations for your company or your third parties at the level of tax
jurisdictions. You can define a tax registration, for example, either to capture a tax registration
number or to specify nexus for a supplier in a particular tax jurisdiction.
Examples of tax jurisdictions include:
Tax Status
“The taxable nature of a product or service in the context of a transaction for a tax type”
Examples of a tax status include taxable standard rate, zero rated, exempt, and non-taxable. A tax
status is similar to the concept of the tax type definition used within Payables and receivables in
releases prior to Release12.
Tax Rate
“The rate specified for a tax status in effect for a period of time. You can express the tax rate as a
percentage or as a value per unit quantity”
An example of a tax rate is 7.5% for a state sales and use tax.
Defining Recovery Types and Recovery Rates
In some tax regimes, a tax that is paid by a registered establishment can claim back all or part of
taxes due from the tax authority. In E-Business Tax this is called tax recovery. There are usually
many regulations surrounding the details of tax recovery. Typically only a portion of the tax amount
paid is recoverable, and tax authorities designate the
tax recovery rates that indicate the extent of recovery for a specific tax.
In Canada, two types of recovery possible on Goods and Services Tax (GST). Certain types of
establishment can claim both an Input Tax Credit and a Tax Rebate. Both of these types of recovery
will have one or more recovery rates applicable under different transaction conditions. E-Business
Tax defines these two recovery types as primary and secondary recovery types. For the primary
recovery type (and, in rare cases, the secondary recovery type), you can define one or more
recovery rate codes with values between 0% to 100%. Like a tax rate code, the recovery rate code
can have different rates for different effective periods
Operating Unit Tax Accounts
The tax accounts that the system uses to post the tax amounts derived from your transactions.
The tax accounts you define serve as default accounting information for taxes, tax rates, tax
jurisdictions, and tax recovery rates.
Processing Taxes on Transactions
After you set up the basic tax configuration for the taxes that your company's legal entities and
operating units are subject to, you must decide how to automate the processing of taxes on your
transactions.
The tax determination process derives the taxes that apply to a transaction and the tax amounts
charged on the transaction by evaluating the factors of the transaction according to the rules that
you define. These taxability factors are:
Party - The parties of the transaction. This can include:
First party legal entities.
Ship from/ship to parties; bill from/bill to parties.
Tax registrations and registration statuses of each party.
Type or classification of a party.
Product - The products transacted. This can include:
Designation of physical goods or services.
Type or classification of a product.
Place - The places involved in the transaction, including the ship from and ship to locations, and the
bill from and bill to locations.
Process - The kind of transaction that takes place. This can include:
Procure to Pay transactions, such as purchases, prepayments, and requisitions.
Order to Cash transactions, such as sales, credit memos, and debit memos.
Type of sale or purchase: retail goods, manufactured goods, intellectual property, resales.
Use these factors to develop your tax determination process and translate your operational
procedures into tax rules.
Before starting the setups in e business TAX, one needs to check if the following setups are
complete or not
Set up tax regimes for the taxes in each country and geographic region where you do business and
where a separate tax applies. A tax regime associates a common set of default information,
regulations, fiscal classifications, and registrations to one or more taxes with the same tax
requirement.
The tax regime provides these functions:
Tax regime. Tax regime level defines a tax that applies to a country or tax zone. For
example, the tax regime United States Sales and Use Tax refers to the country United
States.
Tax. Tax level defines a tax and the geographic level for the tax, such as a City tax or a
County tax.
Tax jurisdiction. Tax jurisdiction level defines a geographic entity and the tax and tax
jurisdiction rates, if any, that belong to this entity. For example, a US County Sales Tax
jurisdiction for San Francisco county refers to the county San Francisco as a child of the
state California as a child of the country United States.
Check the Allow Cross Regime Compounding box and enter the compounding precedence, if
taxes in this regime are involved in any compounding operation with taxes in another regime of the
same configuration owner. The compounding precedence indicates the order in which to consider
the taxes in each regime.
You must set this option in each of the participating tax regimes if any of these cases apply:
• a tax in this regime impacts the taxable base of a tax in another regime.
• a tax in another regime impacts the taxable base of a tax in this regime.
• a tax in this regime impacts the taxable base of a tax in another regime on the same transaction
line.
Note: You must ensure that you set this option correctly for each tax regime. You cannot update this
setting after you save the tax regime record.
You must also complete these setup steps for cross-regime compounding:
• Define the compounding precedence for the taxes in this regime according to the cross-regime
compounding requirements.
• Set up a taxable basis tax formula or tax calculation tax formula for each tax involved in the
compounding.
• Set up a Taxable Basis tax rule or Calculate Tax tax rule for each tax regime and tax, and assign
the tax formulas to these rules.
1. Geography structure of the country
Navigate to
At transaction time E-Business Tax derives the jurisdiction or jurisdictions that apply to a
transaction line based on the place of supply. The place of supply is the location where a
transaction is determined to take place for a specific tax. E-Business Tax either uses a default
place of supply or derives a place of supply based on tax rules.
You also use tax jurisdictions to define jurisdiction-based tax rates. A tax jurisdiction tax rate is a
rate that is distinct to a specific geographic region for a specific tax. For example, the tax defined
as California city sales tax can have different rates for each city tax jurisdiction.
You must set up at least one tax jurisdiction for a tax before you can make the tax available on
transactions. A tax can apply to multiple jurisdictions, such as California county sales tax to all
counties or Canadian Goods and Services Tax to many provinces. If you enable multiple
jurisdictions for the tax, you can create multiple tax jurisdictions at once based on the geographic
hierarchy defined for the tax. You can only do this if the tax uses the TCA master geography.
The tax within a jurisdiction can have different rates for the parent and child geographies. For
example, a city sales tax rate can override a county rate for the same tax. In this case, you can set
up an override geography type for the city and apply a precedence level to the city and county
tax jurisdictions, to indicate which jurisdiction takes precedence.
In addition, in some cities a different city rate applies to the incorporated area of the city, called
the inner city. In these cases you can set up an inner city tax jurisdiction with its own rate for the
applicable customers and Receivables tax. Inner city tax jurisdictions are often based on postal
code groupings.
Set up the tax statuses that you need for each tax that you create for a combination of tax regime,
tax, and configuration owner.
A tax status is the taxable nature of a product in the context of a transaction and a pecific tax on the
transaction. You define a tax status to group one or more tax rates hat are of the same or similar
nature.
For example, one tax can have separate tax statuses for standard, zero, exemption, and educed
rates. A zero rate tax status may have multiple zero rates associated with it in rder to handle
different reporting requirements for zero rate usage, such as Intra EU,zero-rated products, or zero-
rated exports.
You define a tax status under a tax and a configuration owner, and define all applicable ax rates and
their effective periods under the tax status. The tax status controls the efaulting of values to its tax
rates.
1) Set as default Tax status: Each tax status must have at least one default. Tax Rules
must be written to set alternate values as required.
2) Allow Tax Exemptions: With a rule based approach to setting tax exemptions,
exempt transactions will be linked to an exempt tax status and rate. Setting the
"Yes" value to this configuration option will also allow a user to define a tax
exemption on a transaction or directly in the party tax profile to record the exempt
reason code. This is however not required nor enforced. Because the exemptions
are primarily tracked by way of tax status/rates we suggest that you use Caution
when reporting if you intend to use the tax exemption fields on the seeded reports.
Setups Tax Rates:
Set up tax rates for your tax statuses and tax jurisdictions. For tax statuses, set up a tax rate
record for each applicable tax rate that a tax status identifies. For tax jurisdictions, set up tax rate
records to identify the tax rate variations for a specific tax within different tax jurisdictions. For
example, a city sales tax for a state or province may contain separate city tax jurisdictions, each
with a specific rate for the same tax.
You can also define tax recovery rates to claim full or partial recovery of taxes paid. You can
define tax jurisdiction and tax status rates as a percentage or as a value per unit of measure. For
example, a city may charge sales tax at a rate of 8% on most goods, but may levy a duty tax with
a special rate of $0.55 per US gallon on fuel. Values per unit of
measure are in the tax currency defined for the tax.
You define tax rate codes and rate detail information per rate period. Rate periods account for
changes in tax rates over time. A tax rate code can also identify a corresponding General Ledger
taxable journal entry.
Recoverable tax is a tax that allows full or partial recovery of taxes paid on purchases, either as a
recoverable payment or as an offset against taxes owed. Also known as "Input Tax Credits" this tax
is normally recovered because it was paid on an item that will be used in creating another item sold
to an end user.
There are usually many regulations surrounding the details of tax recovery. Typically only a portion
of the tax amount paid is recoverable, and tax authorities designate the tax recovery rates that
indicate the extent of recovery for a specific tax. As with all tax setup, consult your tax department or
a tax professional to determine how you should configure your system.
Some Examples:
1. 100% Recovery Tax: Most VAT-type taxes allow for full recovery of taxes paid on goods and
services that relate to taxable business supplies.
2. Partial Recovery Tax: In cases where an organization purchases both taxable and exempt
supplies, the tax authority can designate a partial recovery rate to reflect the combination of taxable
and exempt statuses.
Use tax zones to group existing geographical regions that share the same tax requirement. You
can use tax zones with tax regimes, to identify tax requirements for a special geographic area and
to create parent tax regimes that represent a related grouping of geographic regions for tax
reporting purposes. You can also use tax zones
with tax rules, to create tax rules that refer to a specific geographic location.
The use of tax zones is optional and depends on your overall tax setup planning. For example, if
a separate economic community exists in part of a country only, you can either set up a tax zone
and corresponding tax regime for the applicable geographic area, or set up a country tax regime
and use applicability rules to exclude the parts of the country where the tax requirement does not
apply.
The tax zone setup makes use of the Trading Community Architecture (TCA) master reference
geography hierarchy. The master reference geography hierarchy identifies the hierarchical
structure of a country, such as Country: State: County: City: Postal Code in the United States,
and identifies which levels are mandatory for the tax zone. A tax zone
type references a specific part of a master reference geography hierarchy. You create tax zones
within a tax zone type to uniquely identify tax requirements within the area defined by the tax
zone type.
You can update the information in a tax zone at any time. You can also update the geographic
information in a tax zone type, as long as the tax zone type does not contain tax zones. If you
apply an end date to a geographic entity in TCA, then this removes all tax zones and tax zone
types associated with the entity.
1. All legal entities, legal establishments, and operating units in your organization that have a
transaction tax requirement.
2. Your customers and suppliers and their locations.
3. Tax authorities that administer tax rules and regulations.
A tax profile is the body of information that relates to a party's transaction tax activities. A tax profile
can include tax registration, tax exemptions, configuration options, main and default information,
party fiscal classifications, tax reporting codes, and account tax details.
The tax registration contains information related to a party's transaction tax obligation with a tax
authority for a tax jurisdiction where it conducts business. The tax registration is part of the tax profile
of a first party legal establishment and a third party and third party site.
A tax exemption defines, for a customer or a customer and product, a discount or replacement
percentage that reduces the applicable tax. The configuration options identify the tax regimes
associated with a first party and the configuration owner and service provider settings associated
with each tax regime.
The configuration options are part of the tax profile of configuration owners, that is, first party
legal entities and operating units owning tax content.
The main and default information identify characteristics of and default values for the transactions
associated with a party.
The party fiscal classifications optionally assigned to a party are used as determining factors in tax
rules.
The tax reporting codes optionally assigned to a party capture tax information from party
transactions for both internal and tax authority reporting requirements.
The account tax details maintain Release 11i migrated tax information for customer and supplier
accounts.
Setting Up Parties for Self-Assessment
You can let a first party self-assess the taxes calculated on the Payables invoices it receives. A self-
assessed tax is a tax calculated and remitted for a transaction, where tax was not levied by the
supplier but is deemed as due (and therefore needs to be paid by the purchaser). In such cases the
purchaser is responsible for calculating and remitting
the tax. Self-assessment is also known as reverse charge or use tax in certain tax regimes.
When self-assessment applies to a tax line, E-Business Tax creates the recoverable and/or non-
recoverable distributions, and Payables creates an additional accounting distribution to record the
liability for the self-assessment.
You can set the self-assessment option:
At the tax profile level to default to the tax registrations that you create for this party.
At the tax registration level.
On an individual tax line.
E-Business Tax applies self-assessment to Payables invoices received by the first party according to
the tax registration setting of the Set for Self Assessment/Reverse Charge option. The specific tax
registration record that E-Business Tax uses is derived either from Determine Tax Registration rules
or from the default tax registration.
Under normal circumstances, the Determine Tax Registration rules or default tax registration will
derive the Bill From party as the place of supply for purchase transactions where the supplier is
responsible for calculating the transaction tax and collecting it from the customer. In the case of Self
Assessment, Reverse Charge, or, in the United States, Use tax, customers are responsible for self-
assessing the tax.
Customers will therefore self-assess under their own tax registration, and the Determine Tax
Registration rules or default tax registration will derive instead the Bill To party registration. In this
case, you expect to see the Set for Self Assessment/Reverse Charge option set on the applicable
first party establishment registration record.
Set up tax profiles for your first party legal entities and legal establishments. First party legal
entities identify your organization to the relevant legal authorities, for example, a national or
international headquarters. First party legal establishments identify each office, service center,
warehouse and any other location within the organization that has a tax requirement.
When you create a legal entity, the system automatically creates a legal entity establishment. You
can create additional legal establishments according to your needs. For each legal establishment
there are one or more tax registrations, depending upon the tax requirements of the applicable tax
authority.
To set up a party tax profile for a first party legal entity or first party legal establishment navigate to
the Create Tax Profile page.
1. Party main information values default to all tax registrations and invoices
belonging to this party. You can update these values at the tax registration level and, if authorized, at
the invoice line level.
Note: The values set at the tax registration level override the values set at the party tax profile level.
2.1 Check the Set for Self Assessment/Reverse Charge box to automatically self-assess taxes on
purchases.
2.2 If applicable, enter a tax classification code to use as a determining factor in tax rules for this
party or party site.
2.3 Set the rounding level and rounding rule for this party.
2.4 If this party intends to send or receive invoices with invoice line amounts inclusive of tax, check
the Set Invoice Values as Tax Inclusive box.
This option overrides the tax inclusive handling setting at the tax level, but not at the tax rate level.
O2C
P2P
Projects
Fusion Cloud Financials
Document approval and Assign Roles
FA
Q&A
9.What is Natural Account in Chart of account and What Is the Purpose of this
?
Answers :
Natural Account is one of the Important segments of the accounting Flexfield.
No char of Account or Accounting KFF can design without using the Natural
Account Type. We have to enable one of the Chart of accounts (KFF)
segments to Natural Account”.
Natural Account Segment Type represent the Type of accounts Values in the
Natural Account Segments (Like Asset, Expense, Liability, Revenue,
Ownership). Only one natural account segment can be defined in a chart of
accounts.
10.What is Pay Alone in AP Invoice?
Answers :
Pay alone is something related to Invoice Payment. This is the Flag we set for
AP Invoice, It Means this invoice will be paid alone. For example, Supplier A
has 3 Invoices, but for 1 Invoice we have enabled the Pay Alone Flag Then
When we will run the Payment Batch then System will create one Check for
two invoices and Separate one Check for Pay Alone Invoice. This Is the
Working of Pay Alone.
Step3:- Enter the email address as below for test email notifications.
22.How Rapid Implementation works in Oracle cloud
As I said , In Rapid Implementation , Oracle cloud has given Excel templates
for different types of Oracle application business objects. So we need to
prepare the data as per our business Requirment in these Excel sheets.
Then An xml file can be generated once the user has filled out the required
information on the spreadsheet.
The user can manually upload the generated xml file to the server from Oracle
Scheduler. Then the upload process will create that business object in oracle
application based on the information on the spreadsheet.
Rapid Implementation helps to upload the Very Basic information about
business objects in oracle cloud application. If user wants to add more detail,
then the user may go through the original path to make changes or provide
more details to that business object in application.
Step3:-
Step5:- Navigate to the 'Manage Remit-to Address' page and define the Remit
to Address.
In the Receipt from Criteria section, click the Create icon to open the Create
Receipt from Criteria window. Use this window to assign the remit-to address
you just created to customer bill-to sites in specified locations
Step6:-
Navigate to the Manage Statement Cycles page.
In the Search Results section, click the Add .In the Name field, enter a name
for this statement cycle.
In the Interval field, select the interval that determines how often to generate
statements: weekly, monthly, quarterly
In the Cycle Dates section, click the Add icon.
In the Business Unit field, select the business unit that will use this statement
cycle.
Step4:- Now We need to go to customer Master and need to do the setup for
each customer for which we want to send customer Statements.
go to Customer Site and then click on the Profiles Tab
Step8: -
Need to enable statement in Customer Site Profile level to enable customer
Statements in Oracle Fusion.
27. How to see all the reports running history in Oracle Cloud
Step 1:- Login to Oracle Fusion and go to Menu Navigator as below and Click
on Reports and Analysis option.
Step2:-
Click on the Browse Catalog Option as highlighted below
Step3:- Click on the Home Tab as highlighted below
Step4:- In the left side of the page under Browse/Manage , You will see these
options report jobs and Report Job History.
Click on the Bell Icon and Then Click on the More details.
Step2:- Click on the Bell Icon and Then Click on the More details.
Step3:-
Now you will see this below BPM worklist Tasks or Notifications.
Click on the Administrative Tasks Highlighted below.
In the Administrative tasks you can able to see all the Oracle Cloud
Notifications ever generated.
Step4:-
Now Put you Purchase Order or Expense report number as highlighted below
to see the Notification related to this.
Step5:-
Click on the Notifications Subject and this will open the Page of the
notification. Here you will have option in the ‘Action’ Button to Suspend, Retry,
Withdraw and Reassign the Workflow Notifications in Oracle Cloud
Step6:- Here you will have option in the ‘Action’ Button to Suspend, Retry,
Withdraw and Reassign the Workflow Notifications in Oracle Cloud
Step3:-
Now under Send Separate Remittance Advice do this below Configurations.
Set SRA format and delivery options as shown in the example below
If you wish to kick off SRA process automatically upon completion of
payments, check 'Automatically submit when payments are confirmed' flag.
Answer :
Step1:- We need to go to the Payables Invoices.
Go to Payables ==>Invoices
click on the Task Pane
Step2: In the Task Pane , Select the option 'Correct Invoices'.
Step3;- 'Correct Invoices' Will download the ADFDI template. In this
Template , We can search all the Error out records. We can correct it and then
re-process it.
34. What is xmlp server in Oracle Fusion BIP reports ?
Answer :
XMLP server is provided by the Oracle Fusion for the BIP reports. This is
totally integrated with the Oracle Fusion Application. XMLP server is
recommended by Oracle cloud to customize the standard reports. xmlp server
has many other benefits too but in this post , I will talk more about the xmlp
server feature we do mostly uses in the Oracle Cloud application.
FRS
the reporting capabilities in Fusion Financials Cloud. Let us look at the different
reporting available:
1.General Ledger Standard reports
2. Account Monitor
3. Account Inspector
4. Financial Reporting Studio (FRS)
5. OTBI (Oracle Transactional Business Intelligent)
6. Smart View (Covered in Part 1 – Please refer ‘Reporting in Fusion Financials
Cloud Part 1)
General Ledger Standard Reports –
Oracle General Ledger provides many seeded/pre-defined reports, which help the
organizations to perform their day-to-day operations & reconciled the GL balances
with Sub ledger applications. The reports cover Journal Entry Details, Trial Balances,
Sub ledger the General Ledger Reconciliation Reports, Chart of Account Reports etc.
The most widely used report is the Account Analysis Reports in different views that
brings the detailed transactions in one format for the given parameters.
One can run these reports from Scheduled Processes work area. These reports can be
extracted in multiple printable or analysable formats like HTML, CSV, PDF, Excel
etc.
Account Monitor –
This tool gives the users separate place (GL Dashboard) to monitor the key account
balances and activities on it. By creating the Account Groups, the user can setup the
Account Monitor with default monitoring options. We can configure the comparisons
(by time etc.); provide the thresholds, set up the tolerance limits and many more
options to view the balances at General Ledger Dashboard. Business users can create
multiple groups for the different accounts based on requirements. This can be changed
easily at any point of time. Users can also click on the displayed balances and drill
down at the detailed balances level to see the Journals and further to the source
information (Sub ledger transactions). Here, users can see the real-time balances. The
graphical representation of the balances can also be setup & seen on this page. The
system applies the colors based on whether the changes are Good or Bad for the
organization.
Account Inspector –
Account Inspector is the multi-dimensional analysis tool which helps to create the ad
hoc pivot analysis, chart-based details and drill down from account to detailed
transactions. You need to set up the report dimensions from Report & Analysis page
from GL role.
Detailed Balances:
GL Journal: