Fusion Tax Document

Fusion Tax- {Overview,Setup,Advance Tax Configuration
&
Business Tax Scenarios }
A Payables Perspective
Krishna Mohan Joshi
Senior Principal Technical Support Engineer
Copyright © 2018, Oracle and/or its affiliates. All rights reserved. | Fusion Tax 2
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The following is intended to outline our general product direction. It is intended for
information purposes only, and may not be incorporated into any contract. It is not a
commitment to deliver any material, code, or functionality, and should not be relied upon
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Objectives
• Understand the Setup and
Overview of Fusion Tax
• Learn What’s New in Fusion Tax
• Understand the Advance Tax

Configuration in Fusion Tax
• Understand Different Business

Scenarios for Tax Implementation
Program Agenda
• Overview of Fusion Tax
• Regime to Rate
• Advance Tax Configuration
• What’s New?
• Business Tax Scenarios
• Troubleshooting Tips
• Q&A
Program Agenda
• Regime to Rate
• What’s New?
• Q&A
Fusion Tax :- Overview
• Complete global tax solution
• Seeded/Rapid Setup data for many countries
• Provides infrastructure to simulate tax setup, transactions lines and
respective tax calculation results
• Enables users to create and maintain a variety of tax rules, which can
handle very simple to very complex tax requirements
• Offers powerful and flexible tax reporting solution
4P’s
Party
Process Fusion Product

Tax
Place
5P’s
Party Product Place Process Purpose

• Party Fiscal Classifications • Product Fiscal Classifications • Place of Supply • Transaction Classifications • Intended Use for goods
such as: and services
• Inventory based • Party Locations
• Non-inventory based • Tax Jurisdictions • Transaction Business
Category
• Transaction Fiscal
Classification
• Document Types
• User Defined
Classifications
Program Agenda
• Regime to Rate
• What’s New?
• Q&A
Regime to Rate
Business
Unit Tax
Accounts
Tax Tax Tax Tax Recovery

Tax
Regime Jurisdiction Status Rate Rate
Flow
Optional Flow
Note: The above data examples were introduced just to illustrate the business flow and do not represent the complete tax setup for the country
Regime to Rate
Tax Regime: is the set of tax rules and setup that
determines the treatment of one or more taxes
administered by a tax authority. Business
For example: Excise Tax Regime in India includes Unit Tax
rules for Excise Tax, and Additional Excise Tax. Accounts
VAT Regime in Argentina includes rules for
Standard VAT, Additional VAT, and Perception VAT.

Tax
Flow
Optional Flow
Other
• USA: Sales & Use Tax
• Canada: GST, PST
• Australia: GST
• Japan: VAT
• Brazil: ICMS, IPI, ISS…
• Argentina: VAT, TO Tax,..
Denmark:
VAT, Env Tax
UK: Germany:
VAT, Isle of Man VAT, ….
Netherlands: Poland:
VAT, Env Tax VAT, …
Belgium: Austria:
VAT, Env Tax VAT, …
France: Greece:
VAT, Env Tax, … VAT, …
Portugal: Italy:
VAT, Madeira, … VAT
Spain: Switzerland:
VAT, Canary Islands VAT, Lichtenstein
Manage Tax Regimes
Manage Tax Regimes
Regime to Rate
Business
Tax: tax is a distinct charge imposed through a Unit Tax
fiscal or tax authority. Every tax in Fusion Tax Accounts
is defined under a tax regime (e.g. IVA for Italy
and Spain or TVA for France)

Tax
Flow
Optional Flow
Manage Taxes
Manage Taxes
Manage Taxes
Manage Taxes
Regime to Rate
Tax Jurisdiction: a geographical area where a tax is levied by a specific tax
authority or a specific tax rate applies.
For example, Business
1.the tax jurisdiction for VAT in Germany is the Country of Germany Unit Tax
2.the tax jurisdiction for a San Jose City Tax is the City of San Jose Accounts
3.the tax jurisdiction for Provincial Goods and Services Tax (PST) in Canada is a
particular Province, such as Saskatchewan, Ontario or British Columbia.

Tax
Flow
Optional Flow
Manage Tax Jurisdictions
Regime to Rate
Tax Status: the taxable nature of a product / service in the Business
context of a transaction for a tax type. For example, taxable Unit Tax
standard rate, zero rated, exempt, partial exempt, non- Accounts
taxable, partial exempt, special rated, etc.

Tax
Flow
Optional Flow
Mange Tax Statuses
Regime to Rate
Business
Tax Rate: the rate specified for a tax Unit Tax
status in effect for a period of time; the Accounts
tax rate can be expressed as a
percentage or as a value per unit
quantity.

Tax
Flow
Optional Flow
Manage Tax Rates and Tax Recovery Rates
Regime to Rate
Recovery Rate: the rate of Input Tax that is allowedBusiness
to be
recovered or offset against Output Tax. Unit Tax
e.g. Business who only produce Vatable goods andAccounts
service can
recover 100% on most purchases. However, Businesses (e.g.
Financial Institutions) who produce VAT Exempt goods and
service have 0% recoverability.

Tax
Flow
Optional Flow
Business Unit Tax Accounts: Defines
Regime to Rate the tax accounts that can be used

for Tax Rates and Recovery Rate
accounting (for use by SLA).
Business
Unit Tax
Accounts

Tax
Flow
Optional Flow
Program Agenda
• Regime to Rate
• What’s New?
• Q&A
Advance Tax Configuration
• Manage Party Tax Profiles
• Manage Configuration Owner Tax Options
• Application Tax Options
• Manage Tax Rules
• Manage Tax Determining Factor / Condition Sets
• Fiscal Classifications (Transaction,Party,Product )
• Manage Tax Registrations
• Manage Tax Formulas
• Manage Simulator Transactions
• Manage Tax Profile Options
• Manage Tax Zone Types
Advance Tax Configuration-Manage Party Tax Profiles
• Party Tax Profile is used to maintain party tax related attributes
such as:
• Enable Tax for the Party
• Set for Tax Inclusiveness
• Allow offset taxes etc.
• Examples
• Party Profile for Legal Entity / Business Units
• Party Profile for Suppliers and Sites
• Party Profile for Customers and Sites
Advance Tax Configuration-Manage Configuration
Owner Tax Options
Advance Tax Configuration-Manage Configuration
Owner Tax Options
Advance Tax Configuration-Application Tax Options
Expense Report template, Invoice

header, Payables Financial Options,
Reference Document
Advance Tax Configuration-Manage Tax Rules
Product Receivables Projects

Management
Procurement Payables
4P’s/5P’s
Tax
Determining Values
Factors
Place of Applicability Status

Tax Taxable Tax Recovery
Supply & &
Regimes Basis Calculation Rate
Registration Rates
Advance Tax Configuration-Manage Tax Determining
Factor Sets
 Determining factors can be used in

Determining
 Tax Rules
Factor
 Taxable Basis Formula Class
 Tax Regime Determination
Determining
 Determining factors are grouped or classified by Determining Factor Classes. Factors
 Class Qualifier are used in some cases to clarify exactly which determining factor
should be used Class
Qualifiers
Factor Sets
Party • Legal Party Fiscal Process • Document
• Transaction Fiscal D F C
Classification
• Registration
Classification e a l
• Transaction Generic
• Party Fiscal Classification t c a
Classification • Accounting e t s
• Transaction Input Event
• Transaction Input r o s
Factor *
Factor * m r e
i s
Product • Product - Inventory Place n
Linked i
• Product - Non-
Inventory Linked • Geography n
• Transaction Input • User Defined
Geography g
Factor (Intended
Use, Product
Override)*
Factor Sets
Class Qualifiers
Class Qualifiers add additional information to clarify the Determining Factor. For
Example, a class qualifier determines which parties registration details to look up
for the determining factor Registration Status.
Party • Legal Party Fiscal

Classification Class Qualifiers:
• Registration • Ship From Party
• Party Fiscal • Ship To Party
Classification • Bill From Party
• Transaction Input • etc.
Factor
Factor Sets
Advance Tax Configuration-Manage Tax Condition Sets
Advance Tax Configuration-
Fiscal Classifications-Transaction,Party,Product
A fiscal classification is a way that a tax authority classifies each part of a
transaction:
– Parties and party sites involved in the transaction.
Ex:- If goods purchased from NGO then tax not applicable
– Products involved in the transaction.
Ex :- If we purchase books then tax 1% applicable
– Nature of the transaction
Ex :- If a export transaction then tax exempt.
Fiscal classifications are used to set up tax rules
Manage Tax Registrations
Manage Tax Formulas
Manage Tax Formulas
Manage Tax Formulas
Manage Simulator Transactions
• What Can You Use The Tax Simulator For?
• Flexibility to test new and/or changed tax rules
• View applied tax rules & the processed result for each rule type
• View individual & summarized tax lines generated
• Quickly enter transactions with fewer validations to perform what-if
scenarios on tax calculation
• What The Tax Simulator Does Not Do
• Simulate tax recovery processing
• Test actions performed on transactions/transaction lines like
Cancel , Reverse lines
• Verify user control settings
• Show tax accounting
Manage Simulator Transactions
Manage Tax Profile Options
Manage Tax Profile Options
Manage Tax Zone Types
Manage Tax Zone Types
Program Agenda
• Regime to Rate
• What’s New?
• Q&A
What’s New?
• Direct/Indirect Defaults at Taxes

• Tax Thresholds
• Tax Point Basis
• Setting Tax for Reporting Purpose Only
Program Agenda
• Regime to Rate
• What’s New?
• Q&A
Business Tax Scenarios
• Tax Classification/Rate Code based

• Self Assessed Tax/ Reverse Charge
• Offset Taxes
• Account Based Tax
• Inclusive Taxes
• Party Fiscal Classification Based Taxes
• Location Based Taxes
• Tax Compounding
• Import / Export Scenario
Program Agenda
• Regime to Rate
• What’s New?
• Q&A
Troubleshooting Tips
• Check whether Business Unit / Legal Entity is attached/subscribed to the
Tax Regime.
• Check whether there exists a Default Tax Status, Default Tax Rate and
Default Tax Jurisdiction for the tax to be calculated.
(This is because the default can be removed even after the Tax is enabled
but at least one Tax status, rate and Jurisdiction to be default in absence
of which the Tax calculation errors out.)
• Check whether Allow Tax Applicability is enabled in the Party Tax
Profile(Supplier/Customer)
• Check whether Allow Tax Applicability is enabled in the Configuration
owner Tax options of the LE or BU attached to the Tax Regime.
• Check the Default Rules and see that if the Applicability Rule is Not
applicable by default, the applicability rule is evaluated (i.e. all the
conditions in the rule are satisfied).
• Check the Regime Determination set in the Configuration owner Tax
Options(Based on the subscription of LE or BU attached to the Regime). If
it is STCC, then ensure that Direct Tax Rate rule is defined.
• Ensure that the place of supply(eg: ship from, ship to etc.,) falls within
the Tax Jurisdiction defined.
• Check whether the Tax is enabled for transactions.
• For a Quantity based Tax the Taxable basis formula to be STANDARD_QTY
and not STANDARD_TB.
• In the Party Tax Profile of the Business Unit used in the transaction if the
Use the subscription of Legal Entity is enabled then the LE should be
subscribed to the Regime. Tax is not calculated if the BU is subscribed to
the Regime
• Ensure that the Tax Regime, Tax, status, rate, Jurisdiction are not end
dated as on the transaction date
• In TCA, Enable both the Geography Validation and Tax Validation options
for each level for which you need to create tax jurisdictions
• Check you have associated one Recovery Rate Rule in the “Rule Code of
Recovery Rate” field at Tax Rate Level for Recovery Rules evaluation
• Check “Allow Offset Taxes” is enabled in the Party Tax Profile(supplier site
if the offset tax basis is supplier site in configuration owner tax options)
for the Offset Taxes.
• Tax Accounts(Expense, Recoverable/ Liability and Interim) to be defined
in the Tax rate to avoid errors during validation of AP Invoice.
• Simulator to be used before processing the transactions in AP or AR. This
will reveal the set up issues in tax if any.
• The Simulator shows the Tax Rules that are getting evaluated which
cannot be viewed on a Payables or AR Invoice.
• If Nothing works then get the AFLog and Aplist for the Transaction
Summary
 Oveview Of Regime to Rate
 What’s new in Fusion Tax
 Business Tax Scenarios
 Troubleshooting Tips
Top Articles and Community Links
THANK YOU

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Fusion Tax- {Overview,Setup,Advance Tax Configuration

• Learn What’s New in Fusion Tax

• Understand the Advance Tax

• Understand Different Business

Process Fusion Product

Party Product Place Process Purpose

Tax Tax Tax Tax Recovery

Tax Tax Tax Tax Recovery

Tax Tax Tax Tax Recovery

Tax Tax Tax Tax Recovery

Tax Tax Tax Tax Recovery

Tax Tax Tax Tax Recovery

Tax Tax Tax Tax Recovery

Regime to Rate the tax accounts that can be used

Tax Tax Tax Tax Recovery

Expense Report template, Invoice

Product Receivables Projects

Place of Applicability Status

 Determining factors can be used in

Party • Legal Party Fiscal

Fiscal classifications are used to set up tax rules

• Direct/Indirect Defaults at Taxes

• Tax Classification/Rate Code based

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