Learnings of an Oracle Apps Consultant

Monday, August 11, 2008
Oracle E-Business Tax: Regime to Rate Flow in Oracle R12
In Oracle Release12, there has been some very significant changes, one among them being how we define tax. E-Business Tax is now a single point where we define our taxes for all the sub-ledger modules. In this article I will try to do a sample Tax setup using the Regime to Rate Flow of Oracle EBusiness Tax in the Tax Manager responsibility. Creating a Tax Regime In Oracle E-Business Tax, a Tax Regime is the system of regulations for the determination and administration of one or more taxes. 1. Navigate to the Create Tax Regime: • Navigation: Tax Configuration àTax Regimes • Click the Button “Create” 1. Enter a new tax regime based on the following information: • Tax Regime Code: TESTREGIME1 • Name: Test Regime1 • Regime Level: Country • Country Name: United States • Parent Regime Code: Blank • Effective From: 01-JAN-1950 • Effective To: Leave Blank

Click on Button “Finish” 4. You will get the message “The tax regime was successfully created” Creating a Tax 1. Enter tax regime configuration options:  Party Name: Vision Operations (Note: Select the Operating Unit owning Tax Content party type)  Configuration for Taxes and Rules: Common Configuration with Party Overrides  Configuration for Product Exceptions: Party-Specific Configuration  Effective From: 01-JAN-1950  Effective To: Leave blank 3. Click on icon “Regime to Rate Flow” .• Used to group Regimes: Unchecked 1. Click on Button “Continue” 2. Expand the Controls and Defaults region • Allow Tax Recovery: Checked • Allow Override and Entry of Inclusive Tax Lines: Unchecked • Allow Tax Exemptions: Checked • Allow Tax Exceptions: Checked • Tax Currency: USD • Minimum Accountable Unit: 0. Click on button “Go” 4.01 • Rounding Rule: Nearest • Tax Precision: 2 (default) 1. Search for the Tax Regime you created above using the filter criteria of Country as “United States” and Tax Regime Code as “TESTREGIME1” 3. Navigate: Tax Configuration à Tax Regimes 2.

2Create a new Tax as per information mentioned below:  Tax Regime Code: TESTREGIME1 (defaults)  Configuration Owner: Global Configuration Owner  Tax Source: Create a new tax (defaults)  Tax: TESTTAX1  Tax Name: Test Tax1  Tax Type: SALES  Effective From: 01-JAN-1950 (defaults)  Effective To: Leave blank .5. Click on button “Create Tax” 1.

Enter the details as per information mentioned below  Allow Override and Entry of Inclusive Tax Lines: Unchecked  Allow Tax Rounding Override: Unchecked  Allow Override for Calculated Tax Lines: Checked  Allow Entry of Manual Tax Lines: Checked  Use Legal Registration Number: Unchecked  Allow Duplicate Tax Registration Numbers: Unchecked  Allow Multiple Jurisdictions: Unchecked  Tax Accounts Creation Method: Create Tax Accounts (defaults)  Allow Tax Exceptions: Checked (defaults)  Allow Tax Exemptions: Checked (defaults)  Tax Exemptions Creation Method: Create Tax Exemptions (defaults)  Allow Tax Recovery: Unchecked . Click on “Show Controls and Defaults” 3. Geography Type: STATE  Parent Geography Type: COUNTRY  Parent Geography Name: United States  Tax Currency: USD (defaults)  Minimum Accountable Unit: 0.01 (defaults)  Rounding Rule: Nearest (defaults)  Tax Precision: 2 (defaults)  Exchange Rate Type: Blank 2.

You will get the message “The Tax has been successfully created” 3. Click on “Expand All” 4. Click on icon “Create Tax Status” 5. Enter the following:  Tax Status Code: TESTSTATUS1  Name: Test Tax Status1  Click on Button “Apply”  Check as Default Tax Status: Checked  Default Status Effective From: 01-Jan-1950 . Return to Tax Regimes. Click on Button “Apply” 2.1.

” Create Tax Rates 1. You will get the message “The tax status was successfully created. Click on button “Apply” 7. Click on icon “Create Tax Rate”. Go back to the Regime to Rate Flow 2. Enter the Tax Rates based on information mentioned below:  Tax Regime Code: TESTREGIME1 (defaults)  Configuration Owner: Global Configuration Owner (defaults)  Tax: TESTTAX1 (defaults)  Tax Status Code: TESTSTATUS1 (defaults)  Tax Jurisdiction Code: Blank . 3.6. Click on “Expand All”.

Click on icon “Rate Details”. Enter the Tax Rate Details based on information mentioned below: • Tax Rate Name: Test Sales Tax Rate1 • Tax Rate Description: Test Sales Tax Rate1 • Set as Default Rate: Checked • Default Effective From: 01-JAN-1950 • Default Effective To: Leave blank • Allow Tax Exemptions: Checked (defaults) • Allow Tax Exceptions: Checked (defaults) • Internet Expenses Enabled : Checked 1. You will get the message “The Tax Rate has been successfully created. Click on the button “Apply” to return to the Create Tax Rate page. Navigate: tax Configuration à Tax Jurisdiction 2.” Creating Tax Jurisdiction 1. Click on button “Create”. Click on the button “Apply” to return to the Regime to Rate Flow page 3. 2. Tax Rate Code: TESTRATE1  Rate Type: Percentage (defaults)  Percentage Rate: 10  Effective From: 01-JAN-1950 (defaults)  Effective From: Leave blank 1. Enter the Tax Jurisdiction details based on information mentioned below:  Tax Jurisdiction Code: TESTJUR1  Tax Jurisdiction Name: Test Tax Jurisdiction1  Tax Regime Code: TESTREGIME1 .

Click on button “Tax Accounts”. Click on the button “Go”. Tax: TESTTAX1  Geography Type: STATE (pick from list!)  Effective From: 01-JAN-1950  Effective To: Leave Blank  Geography Name: CA  Precedence Level: 300 (defaults)  Collecting Tax Authority: Blank  Reporting Tax Authority: Blank  Set as default Tax Jurisdiction: Yes (defaults)  Default Effective From: 01-JAN-1950  Default Effective To: Leave blank 1. Search for the Taxes that we created just now using the following filter criteria:  Country Name: United States  Tax Regime Code: TESTREGIME1  Tax: TESTTAX1 3. Navigate: Tax Configuration à Taxes 2. 4. Enter the Tax Account details based on following information: • Operating Unit : Vision Operations . Then click on icon “Update”. Click on the button “Apply” to return to the Regime to Rate Flow page 2. Click on button “Create” 7. You will get the message “The tax jurisdiction was successfully created.” Creating Tax Accounts 1. Enter the Ledger as “Vision Operations (USA)” 6. 5.

Creating Tax Rules 1. Click on button “Go”. 2. 4. to return to the Taxes page. Set the following values corresponding to the Rule Types:  Determine Place of Supply: Ship To  Determine Tax Applicability: Applicable  Determine Tax Registration: Bill From Party  Determine Taxable Basis: STANDARD_TB  Calculate Tax Amounts: STANDARD_TC . Access the rule type by filtering on the following criteria:  Configuration Owner: Global Configuration Owner  Tax Regime Code: TESTREGIME1  Tax: TESTTAX1 3. You will get the message “The tax was successfully updated”. 4.• Tax Expense: 01-210-7710-0000-000 • Tax Recoverable/Liability: 01-000-2220-0000-000 1. Click the button “Apply”. Click on button “Apply” and return back to Tax Accounts page. to return to the Update Tax page. Then click on “Expand All”. 3. Navigate: Tax Configuration à Tax Rules 2. Click the button “Apply”.

Select the Tax created based on the following filter criteria:  Country Name: United States  Tax Regime Code: TESTREGIME1  Tax: TESTTAX1 3.Making Tax Available for Transactions 1. 4. Then click on icon “Update” on the “TESTTAX1” row. Check the box “Make Tax Available for Transactions” . Click on button “Go”. Navigate: Tax Configuration àTaxes 2.

Are you sure you want to enable this tax?” having options “Yes” and “No”. 2. Click on “Yes” 3. You will get the message “The tax was successfully updated.” Test your Tax Setup by creating an Invoice in Payables /Receivables or creating a Purchase Order. Click on button “Apply”.1. . You will get the message “This tax does not have an exchange rate type.

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