Oracle R12 E-Business Tax: Impacts and Alternatives

NCOAUG Training Day February 25, 2011

Presenter Information

Dave Homiak, Vertex Inc.
Sr. Channel Manager, Oracle Solutions 11 years experience in the tax automation industry Managing the partnership with Oracle Communicating our solutions for Oracle clients

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Agenda

Session Objectives Vertex-Oracle Partnership Oracle Introduces E-Business Tax with R12 Capabilities and Limitations of EBTax 3rd Party Tax Integration (Vertex’s Role) Overview of Vertex O Series Integration for EBTax Success Stories EBTax Setups to Enable Vertex

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Objectives Upon completion of this session. you will be able to: Understand the concepts of E-Business Tax and Vertex O Series Understand the current Oracle R12 integration status Gain an understanding of how Vertex O Series is configured with E-Business Tax Learn through demonstration of O2C and P2P transactions where Vertex O Series calculates tax Understand Vertex O Series International tax capabilities for Oracle E-Business Suite R12 4 .

Oracle Partnership Oracle Platinum Partner Only tax solution provider to achieve this level Executive sponsorship from Oracle required Oracle Development Partner Jointly developing tax solutions since 1992 (SalesTax/PayrollTax) Direct access to Oracle Tax Development group Only vendor selected by Oracle to test R12 tax integrations Over 800 mutual clients Mutual customers – Vertex uses Oracle. Oracle uses Vertex 5 .

Introducing E-Business Tax for Oracle R12 .

E-Business Tax – Global Tax Management Now Oracle 11i Oracle R12 .

Oracle eBusiness Tax Centralized Global Tax Management Module for Oracle R12 Order to Cash and Procure to Pay Modules Ability to create simple and complex tax rules Expanded VAT functionality (Tax Content Library) Enhanced tax reporting functionality Best native tax engine among major ERP players .

Tax Determination Steps Regime Applicability Determine where the transaction is deemed to take place Determine Applicable Tax Regimes Determine Candidate Taxes Determine Place of Supply And Tax Registration Determine Applicable Taxes & Jurisdictions Determine Tax Status for each applicable Tax Vertex Registered? Tax Applicability Identify Status Tax Locations Identify Attributes Tax Rate Determine Tax Rate Evaluate Exemptions and Exceptions Taxable Basis Call O Series Determine Taxable Basis (normally line amount) Record O Series Tax Calculation Calculated Tax Calculate Tax (normally = line amount x rate) 9 .

eBTax – Framework for Building Tax Rules 10 .

eBTax – Compliance Limitations R12 customer and consultant feedback – eBTax does not provide: Tax rates Situs/Place of Supply rules (e.g. modified origin) Tier tax & max tax rules Product/services taxability rules Distinction between sales tax and use tax Returns or remittance capability 11 .

maintaining and testing rules can be time consuming Does not work with disparate systems – Oracle R12 only Does not provide master geography data for Address Validation .eBTax – Functional Limitations • • • Building.

what kind of support will we get from Oracle when we call them about changes? Will we be getting support from folks that know tax or will it be coming from the standard support group? Will Oracle be in a position to respond to up to the minute business needs for complying with ever changing tax laws? .Oracle eBusiness Tax – Considerations • • • • • Is my company prepared to maintain these rule changes that affect the simple tax rates? How many people will we need to track and manage changes? Once we implement R12 with eBTax.

Oracle Strategy for 3rd Party Tax Integrations .

5.8 and above Changes need IT involvement No Standard Tax Integration on the Procure to Pay side Oracle R12 introduced eBusiness Tax Module Oracle invested a great deal in the E-Business Tax module Centralized Tax Processing Provides a tax framework or skeleton Standard Tax Integration for P2P transactions Control shifts to Tax Dept rather than IT 15 .Oracle Sales Tax Integration Background Oracle 11i included standard US Sales Tax Integration Q Series embedded into 11.

eBTax Background and Basics Oracle selected Vertex as the only testing partner Vertex was heavily involved in the design and development phases of eBTax integration Consider Vertex a trusted partner and advisor for tax system design and development for over 15 years Recognize Vertex’s continued investment in research and development of tax systems Value Vertex’s shared commitment to mutual customers’ success 16 .

use and international tax rules included .eBTax Background and Basics Tax Options for R12 EBTax engine and Sales Tax Rate File ORAMAST file format – US content only Requires manual construction and maintenance of rules Vertex Q Series Leverages old 11i interface structure Limited functionality for Consumer Use Tax and VAT Vertex O Series Validated Integration using supported Oracle interface All sales.

Oracle eBTax – Partner Integration Overview eBusiness Suite/eB Tax Transaction Data Transaction Data Tax Services Request Manager Services Content Repository Tax Content Services Tax Determination Services Partner Tax Content Interface Tax Administration Services Partner Tax Services Interface Record Repository Vertex O Series 18 .

eBTax 3rd Party Integration Impact on Vertex Completely different integration structure compared to 11i 3rd party tax integration to Procure to Pay Modules Integration Timeline Integration design and development began in 2006 O2C integration completed in 2008 P2P integration completed in 2009 VAT extension completed in 2010 Validations achieved in 2010 .

eBTax and Vertex O Series – Client Benefits Following the Oracle development standards leveraging the eBTax framework means: The integration is supported by Oracle’s Support Center Synchronization of versions when applying new RUPs 20 .

Modules and Financial Events Transactions Impact on Tax Procure to Pay (P2P) • • • • Accounts Payable Purchasing Expense Report Projects Oracle Payables Invoice Payables Credit/Debit Memo Purchase Order Purchase Transaction Quote Purchase Requisition Purchase Prepayment Order to Cash (O2C) • • • • Order Management Receivables Service Contracts Quote Sales Transaction Quote Receivables Invoice Sales Credit/Debit Memo Sales Adjustment 21 .

Integration Availability • • • US Order to Cash Available since 2008 – 20 clients US Procure to Pay Available since 2009 – 14 clients International VAT Input and Output Available since 2010 – 5 clients Brazil. India and China – available 2011 22 .

0 and 6.0 for R12 Order to Cash Modules Procure to Pay Modules 23 .Oracle Validation • Oracle has validated O Series 5.

Oracle R12 O Series Clients 24 .

EBTax Setup for Vertex O Series .

EBTax Required Setups Creating Tax Regime Registering Vertex as the Service Provider Linking Vertex to EBTax Setups Tax Tax Status Tax Jurisdiction Tax Rates Tax Rules 26 .

Tax Determination Steps Regime Applicability Determine where the transaction is deemed to take place Determine Applicable Tax Regimes Determine Candidate Taxes Determine Place of Supply And Tax Registration Determine Applicable Taxes & Jurisdictions Determine Tax Status for each applicable Tax Vertex Registered? Tax Applicability Identify Status Tax Locations Identify Attributes Tax Rate Determine Tax Rate Evaluate Exemptions and Exceptions Taxable Basis Call O Series Determine Taxable Basis (normally line amount) Record O Series Tax Calculation Calculated Tax Calculate Tax (normally = line amount x rate) 27 .

Tax Determination Steps – Using Vertex O Series Regime Applicability • Determine where the transaction is deemed to take place • Determine Applicable Tax Regimes Vertex Registered? • Determines if the Applicable Tax Regime is Subscribed to Vertex • Determines relevant locations (Bill_to. etc) Identify Locations Identify Attributes Call O Series • Call is made to O Series to Calculate Tax Record O Series Record O Series Calculated Tax Calculated Tax • Tax and attributes set by O Series are recorded on the transaction 28 . Ship_to. etc) • Identifies Tax Exemptions sourced in Oracle • Identifies other Tax Attributes (product category.

Service Subscription Designation 29 .

Service Provider Confirmation 30 .

Tax Regime Creation 31 .

Tax Regime – Tax Levels Covered 32 .

Tax Regime Code – Possible Taxes 33 .

Tax Status Creation 34 .

Vertex and Oracle R12 EBTax: Summary .

Questions/Answers .

Oracle Solutions 610-651-5361 dave.com 37 . Vertex Inc. Sr.homiak@vertexinc. Channel Manager.Presenter Contact Information Dave Homiak.

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