Use Only: R12 Oracle E-Business Tax Fundamentals

R12 Oracle E-Business Tax
Fundamentals
Vol 1 - Student Guide
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Edition 2.0
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Copyright © 2007, Oracle. All rights reserved.
This document contains proprietary information and is protected by copyright and other intellectual property laws. You may copy and
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Authors
Mary Kalway, Robert MacIssac
Technical Contributors and Reviewers
Ramasubramanian Balasundaram, Rajesh Bhatt, Nigel Chapman, Kevan Davies, Julianna

Dodick, Nirajita Mitra, Anand Naik, Pamela Rietz, Christine Rudd, Harsh Takle, Brijesh
Thakkar, Amit Vohra, Kathryn Wohnoutka
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This book was published using: oracletutor
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Table of Contents
Oracle E-Business Tax Overview ...................................................................................................................1-1

Oracle E-Business Tax Overview..................................................................................................................1-3
Objectives ......................................................................................................................................................1-4
Agenda...........................................................................................................................................................1-5
E-Business Tax – New Product .....................................................................................................................1-6
E-Business Tax – Benefits.............................................................................................................................1-8
E-Business Tax Solutions for Business Needs ..............................................................................................1-9
Integration Within Oracle E-Business Suite ..................................................................................................1-13
Agenda...........................................................................................................................................................1-16
E-Business Tax Architecture .........................................................................................................................1-17
E-Business Tax Home Page...........................................................................................................................1-19
Agenda...........................................................................................................................................................1-20
E-Business Tax Key Concepts – Tax Definition ...........................................................................................1-21
Key Concepts: Tax Authority........................................................................................................................1-23
Key Concepts: Tax Regime ...........................................................................................................................1-24
Key Concepts: Tax ........................................................................................................................................1-25
Key Concepts: Tax Jurisdiction.....................................................................................................................1-26
E-Business Tax Key Concepts – Configuration Components .......................................................................1-27
E-Business Tax Key Concepts – Tax Rules Engine ......................................................................................1-30
Tax Determination Management ...................................................................................................................1-33
Agenda...........................................................................................................................................................1-35
E-Business Tax Processing............................................................................................................................1-36
Receivables Transaction Example .................................................................................................................1-37
Guided Demonstration - Create a New Tax (Environmental) ...................................................................1-41
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Part 1: Oracle E-Business Tax Basic Tax Configuration.............................................................................2-1
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Summary........................................................................................................................................................1-51
Part 1: Oracle E-Business Tax Basic Tax Configuration...............................................................................2-3
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Objectives ......................................................................................................................................................2-4
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Agenda...........................................................................................................................................................2-5
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E-Business Tax Home Page – External Dependencies & Tax Configuration ...............................................2-7
E-Business Tax Configuration Flow – External Dependencies.....................................................................2-8
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E-Business Tax Configuration Flow – Tax Configuration ............................................................................2-9
Tax Users.......................................................................................................................................................2-10
Practice - Create a New User.....................................................................................................................2-11
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Solution - Create a New User ....................................................................................................................2-13
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Profile Option Values ....................................................................................................................................2-15
Legal Entity ...................................................................................................................................................2-17
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Lookup Codes................................................................................................................................................2-19
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Regime-to-Rate Flow for US Sales Tax ........................................................................................................2-21
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Regime-to-Rate Flow for UK VAT ...............................................................................................................2-23
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Agenda...........................................................................................................................................................2-25
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Tax Regimes ..................................................................................................................................................2-26
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Tax Regime Setup .........................................................................................................................................2-27
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Agenda...........................................................................................................................................................2-29
Taxes .............................................................................................................................................................2-30
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Tax Setup.......................................................................................................................................................2-31
Agenda...........................................................................................................................................................2-32
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Tax Statuses...................................................................................................................................................2-33
Tax Status Setup ............................................................................................................................................2-34
O Agenda...........................................................................................................................................................2-35
Tax Rates .......................................................................................................................................................2-36
Copyright © Oracle Corporation, 2007. All rights reserved.
R12 Oracle E-Business Tax Fundamentals Table of Contents

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Tax Rate Setup ..............................................................................................................................................2-37
Agenda...........................................................................................................................................................2-39
Tax Jurisdictions............................................................................................................................................2-40
Tax Jurisdiction Setup ...................................................................................................................................2-41
Practice - Create a Regime to Rate Tax Model..........................................................................................2-42
Solution - Create a Regime to Rate Tax Model .........................................................................................2-46
Summary........................................................................................................................................................2-52
Part 2: Oracle E-Business Tax Basic Tax Configuration.............................................................................3-1
Part 2: Oracle E-Business Tax Basic Tax Configuration...............................................................................3-3
Objectives ......................................................................................................................................................3-4
Agenda...........................................................................................................................................................3-5
E-Business Tax Home Page – External Dependencies & Tax Configuration ...............................................3-7
Basic Tax Configuration – Additional Setup Options ...................................................................................3-8
Agenda...........................................................................................................................................................3-10
Tax Zones ......................................................................................................................................................3-11
TCA Geography Hierarchy............................................................................................................................3-13
Tax Zone Setup..............................................................................................................................................3-14
Practice - Create Tax Zones.......................................................................................................................3-15
Solution – Create Tax Zones .....................................................................................................................3-17
Agenda...........................................................................................................................................................3-20
Define Tax Accounts .....................................................................................................................................3-21
Tax Account Setup ........................................................................................................................................3-23
Practice - Create Tax Accounts .................................................................................................................3-25
Solution – Create Tax Accounts ................................................................................................................3-26
Tax Reporting Types .....................................................................................................................................3-29

Tax Reporting Type Setup.............................................................................................................................3-30
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Agenda...........................................................................................................................................................3-28
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Agenda...........................................................................................................................................................3-31
Mass Create Tax Jurisdictions .......................................................................................................................3-32
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Mass Create Tax Jurisdictions Setup .............................................................................................................3-33
Agenda...........................................................................................................................................................3-35
Tax Recovery Rates.......................................................................................................................................3-36
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Summary........................................................................................................................................................3-37
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Managing Party Tax Profiles..........................................................................................................................4-1
Managing Party Tax Profiles .........................................................................................................................4-3
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Objectives ......................................................................................................................................................4-4
Agenda...........................................................................................................................................................4-5
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E-Business Tax Home Page – Party Tax Profiles..........................................................................................4-7
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Using Party Tax Profiles................................................................................................................................4-8
Party Tax Profile............................................................................................................................................4-10
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First Party Legal Entity Tax Profile...............................................................................................................4-13
First Party Legal Establishment Tax Profile..................................................................................................4-15
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First Party Tax Profile Setup .........................................................................................................................4-17
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Operating Unit Tax Profile ............................................................................................................................4-18
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Tax Authority Tax Profile .............................................................................................................................4-19
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Third Party Tax Profile..................................................................................................................................4-20
Third Party Tax Profile Setup........................................................................................................................4-22
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Agenda...........................................................................................................................................................4-23
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Self-Assessment Setup ..................................................................................................................................4-24
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Agenda...........................................................................................................................................................4-26
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Offset Taxes...................................................................................................................................................4-27
Offset Taxes Setup.........................................................................................................................................4-28
O Agenda...........................................................................................................................................................4-29
Tax Exemptions.............................................................................................................................................4-30

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Tax Exemptions Setup...................................................................................................................................4-32
Agenda...........................................................................................................................................................4-33
Tax Registrations...........................................................................................................................................4-34
Tax Registrations Setup.................................................................................................................................4-36
Practice - Create a First Party Tax Profile .................................................................................................4-37
Solution – Create a First Party Tax Profile................................................................................................4-39
Guided Demonstration - Create a Third Party Tax Profile ........................................................................4-42
Summary........................................................................................................................................................4-44
Configuration Owners and Service Providers ..............................................................................................5-1
Configuration Owners and Service Providers................................................................................................5-3
Objectives ......................................................................................................................................................5-4
Agenda...........................................................................................................................................................5-5
E-Business Tax Home Page – Configuration Owner & Options...................................................................5-8
Tax Configuration Ownership .......................................................................................................................5-9
Tax Configuration Options ............................................................................................................................5-11
Configuration for Taxes and Rules................................................................................................................5-12
Configuration for Product Exceptions ...........................................................................................................5-13
Legal Entity and Operating Unit Configuration Options...............................................................................5-14
Agenda...........................................................................................................................................................5-15
Configuration Options ...................................................................................................................................5-16
Configuration Options Setup .........................................................................................................................5-17
Agenda...........................................................................................................................................................5-18
Service Subscriptions ....................................................................................................................................5-19
Service Subscriptions Setup ..........................................................................................................................5-21
Guided Demonstration - Set Up a Configuration Option for a Configuration Owner/Tax Regime ..........5-22
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Agenda...........................................................................................................................................................5-24
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Event Classes.................................................................................................................................................5-25
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Configuration Owner Tax Options ................................................................................................................5-27
Summary........................................................................................................................................................5-29
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Fiscal Classifications........................................................................................................................................6-1
Fiscal Classifications .....................................................................................................................................6-3
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Objectives ......................................................................................................................................................6-4
Agenda...........................................................................................................................................................6-5
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E-Business Tax Home Page – Fiscal Classifications.....................................................................................6-8
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Fiscal Classifications .....................................................................................................................................6-9
Agenda...........................................................................................................................................................6-11
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Party Fiscal Classifications............................................................................................................................6-12
Party Fiscal Classifications Setup..................................................................................................................6-13
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Legal Party Fiscal Classifications..................................................................................................................6-14
Guided Demonstration - Create a Party Fiscal Classification....................................................................6-15
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Agenda...........................................................................................................................................................6-17
Product Fiscal Classifications........................................................................................................................6-18
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Product Fiscal Classifications Setup..............................................................................................................6-20
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Guided Demonstration - Create a Non-Inventory Based Product Fiscal Classification ............................6-22
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Agenda...........................................................................................................................................................6-24
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Product Tax Exceptions.................................................................................................................................6-25
Product Tax Exceptions Setup.......................................................................................................................6-27
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Guided Demonstration - Create a Product Tax Exception.........................................................................6-29
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Agenda...........................................................................................................................................................6-30
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Transaction Fiscal Classifications .................................................................................................................6-31
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Summary........................................................................................................................................................6-33
OPart 1: Setting Up Tax Rules ..........................................................................................................................7-1

Part 1: Setting Up Tax Rules .........................................................................................................................7-3

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Objectives ......................................................................................................................................................7-4
Agenda...........................................................................................................................................................7-5
E-Business Tax Homepage – Tax Rules........................................................................................................7-7
Rule Engine ...................................................................................................................................................7-8
Rule Engine – Rule Types .............................................................................................................................7-9
Rule Engine – Tax Regimes ..........................................................................................................................7-11
Rule Engine – Place of Supply / Taxation .....................................................................................................7-12
Rule Engine – Applicability & Registration..................................................................................................7-13
Rule Engine – Status & Rates........................................................................................................................7-15
Rule Engine – Taxable Basis.........................................................................................................................7-17
Rule Engine – Tax Calculation......................................................................................................................7-18
Rule Engine – Recovery Rate........................................................................................................................7-19
Agenda...........................................................................................................................................................7-20
Tax Rule Defaults..........................................................................................................................................7-21
Practice - Set Up Tax Rule Defaults ..........................................................................................................7-23
Solution – Set Up Tax Rule Defaults.........................................................................................................7-25
Agenda...........................................................................................................................................................7-27
Make Tax Available on Transactions ............................................................................................................7-28
Practice - Make Tax Available for Transactions .......................................................................................7-30
Solution – Make Tax Available for Transactions ......................................................................................7-31
Agenda...........................................................................................................................................................7-32
Oracle Tax Simulator.....................................................................................................................................7-33
Troubleshooting the Tax Configuration ........................................................................................................7-35
Practice - Review Tax Configuration Results Using the Tax Simulator....................................................7-37
Solution – Review Tax Configuration Results Using the Tax Simulator ..................................................7-40
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Tax Rules Entry .............................................................................................................................................7-45
Tax Rules – Guided Rule Entry.....................................................................................................................7-46
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Agenda...........................................................................................................................................................7-44
Guided Demonstration - Set Up Determine Tax Applicability Rule Using the Guided Rule Entry..........7-51
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Tax Rules – Guided Rule Entry Setup...........................................................................................................7-49
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Summary........................................................................................................................................................7-54
Part 2: Setting Up Tax Rules ..........................................................................................................................8-1
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Objectives ......................................................................................................................................................8-4
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Agenda...........................................................................................................................................................8-5
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Determining Factors ......................................................................................................................................8-8
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Determining Factor – Party ...........................................................................................................................8-10
Determining Factor – Product .......................................................................................................................8-12
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Determining Factor – Place ...........................................................................................................................8-13
Determining Factor – Process........................................................................................................................8-15
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Agenda...........................................................................................................................................................8-17
Tax Determining Factor Set...........................................................................................................................8-18
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Tax Determination Set Setup for Tax Rules ..................................................................................................8-20
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Regime Determination Set Setup...................................................................................................................8-22
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Agenda...........................................................................................................................................................8-23
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Tax Formulas.................................................................................................................................................8-24
Tax Formula Setup ........................................................................................................................................8-26
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Agenda...........................................................................................................................................................8-27
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Tax Condition Sets ........................................................................................................................................8-28
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Tax Condition Sets Setup ..............................................................................................................................8-29
Summary........................................................................................................................................................8-30
OPart 3: Setting Up Tax Rules ..........................................................................................................................9-1


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Objectives ......................................................................................................................................................9-4
Agenda...........................................................................................................................................................9-5
Rules in Detail Example UK Rules Setup (Intra EU Sales) ..........................................................................9-8
UK Rules Setup - Intra EU Sales...................................................................................................................9-9
Agenda...........................................................................................................................................................9-16
Rules in Detail Example Summary UK Rules Setup (Intra EU Sales) ..........................................................9-17
Guided Demonstration - Set Up a Tax Determination Set for Tax Rules..................................................9-19
Guided Demonstration - Set Up a Tax Condition Set................................................................................9-20
Agenda...........................................................................................................................................................9-21
Tax Rules.......................................................................................................................................................9-22
Tax Rules – Expert Rule Entry......................................................................................................................9-23
Guided Demonstration - Set Up Determine Place of Supply Rule Using the Expert Rule Entry ..............9-24
Summary........................................................................................................................................................9-26
Tax Recovery ...................................................................................................................................................10-1
Tax Recovery.................................................................................................................................................10-3
Objectives ......................................................................................................................................................10-4
Agenda...........................................................................................................................................................10-5
E-Business Tax Homepage – Tax Recovery .................................................................................................10-7
Tax Recovery.................................................................................................................................................10-8
Value Added Tax Overview ..........................................................................................................................10-9
Regime-to-Rate Flow with UK VAT.............................................................................................................10-10
Agenda...........................................................................................................................................................10-11
Tax Recovery Rates.......................................................................................................................................10-12
Guided Demonstration - Specify Tax Recovery in the Regime to Rate Tax Model..................................10-14
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Agenda...........................................................................................................................................................10-20
Guided Demonstration - Set Up a Tax Recovery Determination Rule ......................................................10-22

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Rule Engine – Recovery Rate........................................................................................................................10-21
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Agenda...........................................................................................................................................................10-24
Tax Recovery Processing ..............................................................................................................................10-25
Summary........................................................................................................................................................10-27
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Managing Taxes on Transactions...................................................................................................................11-1
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Managing Taxes on Transactions ..................................................................................................................11-3
Objectives ......................................................................................................................................................11-4
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Agenda...........................................................................................................................................................11-5
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E-Business Tax Homepage – Oracle Tax Simulator .....................................................................................11-7
Services .........................................................................................................................................................11-8
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Payables Transactions....................................................................................................................................11-11
Payables Transactions – Invoices Matched to POs.......................................................................................11-13
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Payables Transactions – Prepayment Invoices ..............................................................................................11-15
Payables Transactions – Price Corrections....................................................................................................11-17
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Receivables Transactions...............................................................................................................................11-18
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Receivables Transactions – Debit and Credit Memos ...................................................................................11-19
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Intercompany Transactions............................................................................................................................11-21
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Agenda...........................................................................................................................................................11-23
Managing Detail Tax Lines ...........................................................................................................................11-24
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Agenda...........................................................................................................................................................11-26
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Managing Summary Tax Lines .....................................................................................................................11-27
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Agenda...........................................................................................................................................................11-29
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Managing Tax Distributions ..........................................................................................................................11-30
Practice - Create Transactions with Applicable Tax..................................................................................11-32
O Solution – Create Transactions with Applicable Tax ................................................................................11-35

Agenda...........................................................................................................................................................11-39

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Managing Tax Exemptions............................................................................................................................11-40
Agenda...........................................................................................................................................................11-42
Using the Oracle Tax Simulator to Enter Transactions .................................................................................11-43
Summary........................................................................................................................................................11-45
Tax Reporting Ledger .....................................................................................................................................12-1
Tax Reporting Ledger....................................................................................................................................12-3
Objectives ......................................................................................................................................................12-4
Agenda...........................................................................................................................................................12-5
E-Business Tax Home Page – Requests ........................................................................................................12-7
Tax Reporting................................................................................................................................................12-8
Tax Reporting Ledger....................................................................................................................................12-10
XML Publisher ..............................................................................................................................................12-12
Agenda...........................................................................................................................................................12-14
E-Business Tax Reports.................................................................................................................................12-15
Agenda...........................................................................................................................................................12-17
EMEA VAT Reports .....................................................................................................................................12-18
Latin American Tax Reports .........................................................................................................................12-19
Asia/Pacific Tax Reports ...............................................................................................................................12-21
Summary........................................................................................................................................................12-23
Appendix A: Managing Migrated Tax Data .................................................................................................13-1
Appendix A: Managing Migrated Tax Data ..................................................................................................13-3
Objectives ......................................................................................................................................................13-4
Agenda...........................................................................................................................................................13-5
Commitment To Continuity Direct Path From 11i ........................................................................................13-6
Tax Definition Upgrade Flow........................................................................................................................13-7
Release 11i Architecture................................................................................................................................13-8
Tax Code Migration.......................................................................................................................................13-9
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Data Ownership .............................................................................................................................................13-11
Operating Unit Tax Profiles...........................................................................................................................13-12
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Agenda...........................................................................................................................................................13-14
Tax Classification Codes ...............................................................................................................................13-15
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Agenda...........................................................................................................................................................13-17
Application Tax Options ...............................................................................................................................13-18
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Tax Defaulting Hierarchy Upgrade Flow ......................................................................................................13-20
Guided Demonstration - Update Application Tax Options........................................................................13-22
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Agenda...........................................................................................................................................................13-24
Configuration Owner Tax Options ................................................................................................................13-25
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Agenda...........................................................................................................................................................13-27
Tax Account Information ..............................................................................................................................13-28
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Agenda...........................................................................................................................................................13-29
Direct Tax Rate Determination Rule .............................................................................................................13-30
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Guided Demonstration - Set Up a Direct Tax Rate Determination Rule ...................................................13-32
Agenda...........................................................................................................................................................13-34
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Stages of Implementation - From 11i to R12.................................................................................................13-35
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Tax Configuration Migration Path.................................................................................................................13-36
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Point A Scenario – VAT Upgrade Mapping..................................................................................................13-38
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Point B Scenario – VAT Upgrade Mapping ..................................................................................................13-39
Summary........................................................................................................................................................13-41
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Preface
Profile
Before You Begin This Course
• Basic knowledge of business accounting concepts.
• Working experience with business tax requirements.
• Thorough knowledge of Oracle Applications.
Prerequisites
• R12 Navigate Oracle Applications
• R12 eBusiness Suite Essentials for Implementers
How This Course Is Organized
This is an instructor-led course featuring lecture and hands-on exercises. Online demonstrations
and written practice sessions reinforce the concepts and skills introduced.
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Related Publications
Oracle Publications
Title Part Number
Oracle E-Business Tax Implementation Guide B25960-01
Oracle E-Business Tax User Guide B25959-01
Oracle E-Business Tax Reporting Guide B31346-01
Oracle Inventory User's Guide B31547-01
Oracle Financials for Europe User Guide B31520-01
Oracle Financials for the Americas User Guide B31525-01
Oracle Financials for Asia/Pacific User Guide B31519-01
Additional Publications
• System release bulletins
• Installation and user’s guides
• Read-me files
• International Oracle User’s Group (IOUG) articles
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• Oracle Magazine
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Typographic Conventions
Typographic Conventions in Text
Convention Element Example
Bold italic Glossary term (if The algorithm inserts the new key.
there is a glossary)
Caps and Buttons, Click the Executable button.
lowercase check boxes, Select the Can’t Delete Card check box.
triggers, Assign a When-Validate-Item trigger to the ORD block.
windows Open the Master Schedule window.
Courier new, Code output, Code output: debug.set (‘I”, 300);
case sensitive directory names, Directory: bin (DOS), $FMHOME (UNIX)
(default is filenames, Filename: Locate the init.ora file.
lowercase) passwords, Password: User tiger as your password.
pathnames, Pathname: Open c:\my_docs\projects
URLs, URL: Go to http://www.oracle.com
user input,
User input: Enter 300
usernames
Username: Log on as scott
Initial cap Graphics labels Customer address (but Oracle Payables)
(unless the term is a
Italic
proper noun)
Emphasized words Do not save changes to the database.
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and phrases,
titles of books and
For further information, see Oracle7 Server SQL Language
Reference Manual.
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courses,
variables
Enter user_id@us.oracle.com, where user_id is the
name of the user.
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Quotation
marks
Interface elements
with long names A
Select “Include a reusable module component” and click Finish.
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that have only
initial caps;
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This subject is covered in Unit II, Lesson 3, “Working with
Objects.”
lesson and chapter
titles in cross-
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Uppercase
references
SQL column O ly Use the SELECT command to view information stored in the
names, commands,
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functions, schemas,& On LAST_NAME
column of the EMP table.
table names
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Arrow
Brackets
Commas
Menu paths
Key names
t e r
Key sequences
U s Select File > Save.
Press [Enter].
Press and release keys one at a time:
Plus signs I n
Key combinations
[Alternate], [F], [D]
Press and hold these keys simultaneously: [Ctrl]+[Alt]+[Del]
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Typographic Conventions in Code
Convention Element Example
Caps and Oracle Forms When-Validate-Item
lowercase triggers
Lowercase Column names, SELECT last_name
table names FROM s_emp;
Passwords DROP USER scott

IDENTIFIED BY tiger;
PL/SQL objects OG_ACTIVATE_LAYER
(OG_GET_LAYER (‘prod_pie_layer’))
Lowercase Syntax variables CREATE ROLE role

italic
Uppercase SQL commands and SELECT userid
functions FROM emp;
Typographic Conventions in Oracle Application Navigation Paths

This course uses simplified navigation paths, such as the following example, to direct you
through Oracle Applications.
(N) Invoice > Entry > Invoice Batches Summary (M) Query > Find (B) Approve
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This simplified path translates to the following:
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1. (N) From the Navigator window, select Invoice then Entry then Invoice Batches
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Summary.
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2.
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(M) From the menu, select Query then Find.
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3. (B) Click the Approve button.
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Notations:
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(N) = Navigator
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(M) = Menu
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(T) = Tab
t e r U s
(B) = Button
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(I) = Icon
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O (ST) = Sub Tab

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Typographical Conventions in Oracle Application Help System Paths
This course uses a “navigation path” convention to represent actions you perform to find
pertinent information in the Oracle Applications Help System.
The following help navigation path, for example—
(Help) General Ledger > Journals > Enter Journals
—represents the following sequence of actions:
1. In the navigation frame of the help system window, expand the General Ledger entry.
2. Under the General Ledger entry, expand Journals.
3. Under Journals, select Enter Journals.
4. Review the Enter Journals topic that appears in the document frame of the help system
window.
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Oracle E-Business Tax
Overview
Chapter 1
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Oracle E-Business Tax Overview

Chapter 1 - Page 1
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Chapter 1 - Page 3
Objectives
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Chapter 1 - Page 4
Agenda
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Chapter 1 - Page 5
E-Business Tax – New Product
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E-Business Tax – New Product
Oracle E-Business Tax:
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• Is a new product in this release.
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O ly
• Provides the infrastructure for transaction tax knowledge management and delivery using
a global system architecture that is configurable and scalable for adding country-specific
tax content.
l & On
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• Is a single point solution for managing transaction-based tax.
• Uniformly delivers tax services to all E-Business Suite business flows through one
application interface.
t e r U s
• Consists of a tax knowledge base, a variety of tax services that respond to specific tax
I n
events, a set of repositories (for tax content and tax recording) that allows customers to
manage their local tax compliance needs in a proactive manner, as well as the ability to
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integrate with external tax content providers through a single integration point.
Features
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Features of E-Business Tax include:
O • Date affectivity on your tax configuration.

Chapter 1 - Page 6
• Tax simulator which enables you to test your tax configuration.
• Classify your tax exceptions:
- Item.
- Intended use.
- Place of supply.
• Look for commonalities:
- Define a classification rule to apply to many suppliers.
- Group geography facts using TCA Geography model.
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E-Business Tax – Benefits
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E-Business Tax – Benefits
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E-Business Tax delivers the following benefits:
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• Migration to Release 12 from Release 11i.
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• Minimize the need for detailed regional tax knowledge.
• Simplified setup.
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• Minimize the risk associated with tax compliance.
• Tax data modeling tool.
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- Sales and use tax. r
• Automatic tax handling for:
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- Deferred tax.n
- Compound tax and surcharges.
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- Multiple tax registrations.
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Chapter 1 - Page 8
E-Business Tax Solutions for Business Needs
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Integration Within Oracle E-Business Suite
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Integration Within Oracle E-Business Suite
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Oracle E-Business Tax provides transaction tax services for these products:
• Purchasing
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• iProcurement
• Receivables O ly
• Payables
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• Project Accounting
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• Trade Management
• General Ledger
t e r U s
I n
Upstream/downstream products incorporating Oracle E-Business Tax are:
• Consigned Inventory
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• Cash Management
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• Collections
r a• Property Management
O • iSupplier Portal

Chapter 1 - Page 13
• Internet Expense
• Service Contracts
• Order Capture
• Order Management
• iStore
• Inventory Management (also Intercompany)
E-Business Tax does not provide tax services for these transactions:
• Payables withholding taxes.
• Latin American Receivables transactions.
• India transaction taxes.
You can continue to set up and maintain these taxes in the Oracle E-Business Suite using the
functionality available within the corresponding application.
Payables Integration
E-Business Tax integration points with Payables include:
• Product event classes:
- Standard invoices.
- Prepayment invoices.
- Expense reports.
• Tax calculation at line and distribution level.
• Additional tax attributes.
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• Backward compatible (11i) tax calculation support:
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- Capture tax classification code (same behavior as 11i tax code).
• Tax user interfaces (UIs) integrated for viewing and modifying tax lines.
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• Self assess tax handling.
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Purchasing Integration
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E-Business Tax integration points with Purchasing include:
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- Requisition.
- Release. O ly
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- Purchase order and agreement.
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• Tax calculation at shipment line and distribution level.
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• Additional tax attributes - captured using common UIs.
s
• Tax UIs integrated for viewing tax lines.
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• Backward compatible (11i) tax calculation support.
Receivables Integration
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E-Business Tax integration points with Receivables include:
c
r a - Invoice.
O - Debit memo.

Chapter 1 - Page 14
- Credit memo.
- Adjustment.
• Additional tax attributes – captured using common UIs.
• Backward compatible (11i) tax calculation support.
• Tax UIs integrated for viewing and modifying tax lines.
• Non recoverable adjustments handled by Receivables (same as in 11i).
General Ledger Integration
E-Business Tax integration points with General Ledger include:
• Supports only backward compatible tax calculation.
• Uses tax rate code for tax calculation.
• Similar to release 11i, for a journal entry line only one tax line is calculated using tax rate
defined for the selected tax rate code on the journal entry line.
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Agenda
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E-Business Tax Architecture
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The E-Business Tax architecture consists of five tiers:
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1. The Tax Definition tier is the tax data that you set up for each tax regime and tax that
your company or institution is subject to (also called the regime-to-rate flow). A tax
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authority administers the taxes of a tax regime. Each tax within a tax regime comprises a
jurisdictions.
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certain number of tax statuses, tax rates (and recovery rates, if applicable), and tax
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2. The Configuration tier identifies the factors that participate in determining the tax on an
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individual transaction. These “taxability” factors are:
a. Party - The parties involved in the transaction. This can include first party legal
I n
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.
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b. Product – The products transacted. This includes the designation of physical goods or
c services, and in some cases the type or classification of the good or service.
r a c. Place - The places involved in the transaction, including the ship from and ship to
locations, and the bill from and bill to locations. Other places—such as point of origin
O

Chapter 1 - Page 17
or point of acceptance—may also be factors, depending on the applicable tax
regulations.
d. 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; the type of sale or
purchase, for example, retail goods, manufactured goods, intellectual property,
resales.
Each of these factors can become determining factors in the creation of tax rules.
3. The Rule Engine tier comprises of the set of tax rules that are used to determine and
calculate tax on a transaction. You define tax rules for each combination of tax regime, tax
and configuration owner. You create tax rules by translating the tax regulations of a tax
authority into determining factors and tax conditions that the E-Business Tax tax rules
engine uses to evaluate the applicability of a tax on each transaction line. Tax rules
determine: the applicability of a tax; the place of supply and tax jurisdiction of the
transaction; the tax registration; the tax status and tax rate; the recovery rate (if
applicable); and the taxable basis and tax formula to use in calculation.
4. The Services tier manages the calculation of the tax amounts, and tax recovery amounts
(if applicable).
5. The Tax Management tier maintains all of the tax information pertaining to each
transaction, for use in tax reporting.
These tiers are discussed in further details throughout this course.
For complete details on setting up and using Oracle E-Business Tax, see: Oracle E-Business
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Tax Implementation Guide and Oracle E-Business Tax User Guide.
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E-Business Tax Home Page
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E-Business Tax Home Page
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The E-Business Tax home page lets you manage the navigation to each of the E-Business Suite
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applications and E-Business Tax components involved in setting up and maintaining your tax
configuration. The Page Hierarchy Personalization user interface displays the entire layout of a
O ly
configurable page in a hierarchy table, or HGRID.
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The Setup Tasks region uses the HGRID to organize the required and optional setup tasks that
you need to complete your tax configuration. Certain setup tasks are conditionally required,
a e
depending upon the details of your tax configuration. You can navigate to each setup page or
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setup flow from the from the Setup Tasks region. Complete the setup tasks in the order
s
indicated to create a tax configuration.
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Note. You must ensure that you complete all prerequisite implementation tasks in all
applicable E-Business Suite applications before you use the Setup Tasks region.
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Agenda
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E-Business Tax Key Concepts – Tax Definition
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E-Business Tax Key Concepts – Tax Definition
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The basic tax configuration includes the regime-to-rate flow for each tax regime.
Tax Authority
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A government entity that regulates tax law, administers, or audits one or more taxes.
Tax Regime
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The set of tax regulations that determine the treatment of one or more taxes administered by a
tax authority.
n a e
Examples of a tax regime include:
e r s
• A sales and use tax in the United States includes rules for state, county, and city sales and
use taxes.
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I n
• An excise tax regime in India includes rules for excise tax and additional excise tax.
l e
• A VAT tax regime in Argentina includes rules for standard VAT, additional VAT, and
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perception VAT.
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Tax
A distinct charge imposed through a fiscal or tax authority.
O Examples of a tax include VAT for the United Kingdom and TVA for France.

Chapter 1 - Page 21
Tax Jurisdiction
A geographical area where a tax is levied by a specific tax authority or where a specific tax rate
applies.
Examples of tax jurisdictions include:
• The tax jurisdiction for VAT in Germany is the country of Germany.
• The tax jurisdiction for a San Jose city tax is the City of San Jose, California.
• The tax jurisdiction for Provincial Goods and Services tax (PST) in Canada is a particular
Province, such as Ontario or British Columbia.
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 Release 12.
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.
Recovery Rate
The rate of input tax that is allowed to be recovered or offset against output tax.
The recovery rate is applicable to VAT taxes. For example, organizations that only produce
VAT applicable goods and services can use 100% recovery rate on most purchases.
m y
Organizations that produce VAT exempt goods and services, for example, financial
institutions, have a 0% recovery rate.
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Operating Unit Tax Accounts
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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
e
jurisdictions, and tax recovery rates.
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Chapter 1 - Page 22
Key Concepts: Tax Authority
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Key Concepts: Tax Authority
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Tax Authority is a government entity that regulates tax law, administers, and/or audits one or
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more taxes. Some examples of tax authorities are:
• Brazil - Secretaria da Fazenda Estadual (State Revenue Office)
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• Brazil - Secretaria da Receita Federal (Federal Revenue Office)
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• California, USA - California State Board of Equalization
l
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• Canada -Canadian Customs and Revenue Agency
• France - Ministry of Economy, Finance and Industry
e r s
• Germany - Federal Ministry of Finance
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• India - Central Board of Customs and Excise
• Singapore -Inland Revenue Authority of Singapore
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• United Kingdom - HM Customs and Excise
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Chapter 1 - Page 23
Key Concepts: Tax Regime
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Key Concepts: Tax Regime
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Tax Regime is the set of tax rules that determine the treatment of one or more taxes
• Brazil - RICMS -> ICMS Regulationr a

administered by a tax authority. Some examples of tax regimes are:
• Brazil - RIPI -> IPI Regulation O ly

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• California, USA - California Sales Tax
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• India - Excise Tax
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• Canada - Canadian Goods and Services Tax
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• Singapore - Singapore Goods and Services Tax
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n
• United Kingdom - UK VAT
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Chapter 1 - Page 24
Key Concepts: Tax
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Key Concepts: Tax
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We can define Tax by a classification of a charge imposed by a government through a fiscal or
Tax Regime: r a
tax authority. Some examples of taxes are:
Taxes:
O ly
------------------------------------------------ ----------------------------------------------------
RICMS - Regulamento do ICMS
l & On ICMS, ICMS-ST (Tributary Substitution)
RIPI - Regulamento do IPI
California Sales Tax
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State Sales Tax
California Sales Tax
t e r U s District Sales tax
Canadian Sales Tax

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Canadian Goods and Services Tax GST
PST
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India Excise and Customs
Singapore Goods and Services Tax
Excise Tax
GST
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UK VAT UK VAT
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Chapter 1 - Page 25
Key Concepts: Tax Jurisdiction
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Key Concepts: Tax Jurisdiction
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Tax Jurisdiction is a geographic area where a tax is levied by a specific tax authority. Some
examples of tax jurisdictions are:
Tax Geographic Zoner a Jurisdiction
-------------- O ly
----------------------- --------------------------------
ICMS São Paulo
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IPI
State Sales Tax
Brazil
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California (State)
Brazil IPI
California State Sales Tax
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County Sales tax San Francisco (County) SFO County Sales Tax
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GST
PST
I nCanada
Ontario
Canada GST
Ontario PST
Excise Tax
GST
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Singapore
India Excise Tax
Singapore GST
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UK VAT UK UK VAT
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Chapter 1 - Page 26
E-Business Tax Key Concepts – Configuration Components
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E-Business Tax Key Concepts – Configuration Components
Along with the basic tax configuration data of the regime-to-rate flow for each tax regime and
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tax, your tax setup includes a number of other configuration components. Some of these
components are mandatory, some are optional, and some are conditionally mandatory,
depending on your tax requirements.
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Party Tax Profiles (mandatory)
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The party tax profile is the body of information that relates to a party’s transaction tax
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activities. Set up and maintain a party tax profile for each party involved in your taxable
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transactions. Parties can include:
U s
• Legal entities, legal establishments, and operating units in your organization that have a
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transaction tax requirement.
• Your customers and suppliers and their locations (conditionally mandatory).
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• Tax authorities that administer tax regulations and rates.
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Customer Tax Exemptions (conditionally mandatory)
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A tax exemption applies either to a specific customer or to a combination of customer and
O specific product. You define tax exemptions as part of the third party tax profile of the

Chapter 1 - Page 27
applicable customers and customer sites. The details of tax exemptions are normally supported
by tax exemption certificates from the relevant tax authority.
Product Tax Exceptions (conditionally mandatory)
Set up tax exceptions to define special rates for specific products, as determined by the tax
authority. This lets you define general rules for a wide classification of products, while
applying a separate rule to a subset of products. At transaction time, E-Business Tax
determines whether the tax exception applies to the transaction line for the product and, if so,
uses the applicable exception rate.
Tax Registrations (mandatory)
Set up tax registrations for your first party legal establishments and your third party
customers/customer sites and suppliers/supplier sites. A tax registration contains information
related to a party’s transaction tax obligation with a tax authority for a tax jurisdiction where it
conducts business. E-Business Tax uses tax registrations in tax determination and tax
reporting. For each tax that you create, you must define either a default tax registration or a tax
rule for the rule type Determine Tax Registration.
Configuration Owners (mandatory)
The legal entities and operating units in your company are each subject to specific sets of tax
regulations as designated by the tax authorities where you do business. The configuration
owner determines, for each legal entity and operating unit, the ownership and use of each of
your tax setups.
E-Business Tax provides the concept of the Global Configuration Owner. The global
configuration owner represents ownership of all of your tax setups at the company level. In
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most cases, legal entities and operating units can subscribe to the global configuration owner
and therefore share the tax content that is maintained at the company level. Where necessary,
d e
an individual legal entity or operating unit can either override part of a tax setup or own its
own tax content.
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Configuration Options (mandatory)
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The regime-to-rate flows that you create identify the taxes and the set of regulations that make
up each tax requirement. Configuration options identify the relationships between the first
r a
parties in your company and tax regimes to reflect the tax requirements of each party. You use
configuration options to associate legal entities and operating units with their applicable tax
O ly
regimes. You must set up a configuration option for each combination of first party and tax
regime, where the party is subject to any tax regulations belonging to a tax regime.
Service Provider (optional)
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E-Business Tax lets you use the tax services of external service providers for tax calculation of
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US Sales and Use Tax on Receivables transactions. E-Business Tax provides transparent
s
integration between the external provider tax service and Oracle Receivables.
t U
In the first release of E-Business Tax, the third-party service providers for US Sales and Use
I n
Tax calculation are Vertex Q-Series and Taxware Sales/Use Tax System.
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Fiscal Classifications (conditionally mandatory)
E-Business Tax provides fiscal classifications to classify the parties, products, places, and
r a
processes involved in your tax transactions. You use fiscal classifications as determining
factors in the creation of tax rules for tax determination. In some cases, fiscal classifications are
O

Chapter 1 - Page 28
necessary to identify specific tax regulations. In other cases, you can use fiscal classifications
as a flexible tool for building a set of tax rules for a specific tax regime and tax.
Country Default Controls (optional)
Use country default controls to maintain tax setup information at the country level that you can
default to the applicable E-Business Tax and legal entity pages. Country default controls let
you designate transaction tax-related values in the countries where you do business. You can
update any default values that you enter on the applicable pages.
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E-Business Tax Key Concepts – Tax Rules Engine
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E-Business Tax Key Concepts – Tax Rules Engine
The tax rules engine uses your tax configuration setup and the details on the transaction to
r a
determine which taxes apply to the transaction and how to calculate the tax amount for each
tax that applies to the transaction. You use the tax rule engine to create rules that reflect the
O ly
regulations of a tax authority for the taxes of a particular tax regime.
Tax Rules
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Define a tax rule for a combination of a tax and rule type. Each tax rule applies to one tax
a e
within a tax regime and belongs to one configuration owner. Tax rules let you create a tax
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requirements of your business.
U s
determination model to reflect the tax regulations of different tax regimes and the tax
I n
Tax Determination Process
The tax determination process identifies the steps that the tax rules engine uses to determine
l e
which taxes apply to a transaction and the tax amounts to calculate. Each step of the tax
c
determination process is represented by a rule type. You define one or more tax rules for each
r a
rule type that you need.
The steps in the tax determination process are:
O • Determine Place of Supply.

Chapter 1 - Page 30
• Determine Tax Applicability.
• Determine Tax Registration.
• Determine Tax Status.
• Determine Tax Rate.
• Determine Taxable Basis.
• Calculate Tax Amounts.
• Determine Recovery Rate (for applicable taxes).
Tax Rule Defaults
You can assign default values to each rule type in the tax determination process. E-Business
Tax uses the default values in tax determination when no rule provides a value that applies to
the transaction.
Tax Determining Factors
A tax determining factor is an attribute that contributes to the outcome of a tax determination
process. Tax determining factors include geographical locations, tax registration status, or one
or more fiscal classifications. E-Business Tax provides the tax determining factors that you use
to build tax rules.
Tax Determining Factor Sets
You use tax determining factor sets to group together related tax determining factors. You
create tax determining factor sets to reflect the kinds of determining factors that go into the
determination of a particular tax. For example, geographical location is often a determining
factor in assessing VAT, while a specific product type may be a determining factor in assessing
m y
an excise duty. You must associate one tax determining factor set with each tax rule.
Tax Condition Sets
d e
A tax condition is a determining factor plus the operator and value that you define for the
determining factor in order to specify a particular result. For example, you may create a tax ca
A
condition using the geography determining factor to identify sales within a state by specifying
e
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that the Ship From state equals the Ship To state.
A tax condition set groups together all of the tax conditions that constitute a particular tax rule.
r a
In this sense, the tax condition set is the logic of the tax rule. It specifies the factors to consider,
and the resulting value that must exist for each factor, in order for the result of the tax rule to
be true.
O ly
Tax Rules Engine Components
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The components of the tax rules engine work together in the following way:
n a e
• Each Tax Rule applies to one tax within a tax regime and belongs to one configuration
t e r U s
owner. You define a tax rule for a combination of a tax and a Rule Type.
• The Determining Factor Set contains the list of determining factors to consider in
I n
evaluating a tax rule.
• You create Tax Condition Sets for the tax rule, using the determining factors of the
l e
determining factor set assigned to the tax rule. Each tax condition of the tax condition set
c
contains a determining factor, an operator, and a value.
r a• Each tax condition set is assigned a priority within the tax rule. Each tax rule is assigned a
O priority within a rule type.

Chapter 1 - Page 31
• At transaction time, the rule engine examines each tax condition until it finds a result that
makes the rule true and applicable to the transaction. If no tax condition is found, then the
tax rule does not apply to the transaction. The rule engine looks to the tax rule with the
next highest priority and repeats the process until a tax rule is found. If no tax rule is found
that evaluates as true, then either the tax rule uses the default value (if applicable) or the
tax does not apply to the transaction.
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Chapter 1 - Page 32
Tax Determination Management
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Tax Determination Management
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Tax Determination Management is responsible for calculating the tax on transactions according
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to the hierarchy of rule types in the tax determination process.
The tax determination process functions in this sequence:
O ly
• Determine Place of Supply: Determines the location where a transaction is considered to
& On
have taken place for a specific tax.
l
n a e
• Determine Tax Applicability: Determines the taxes that apply to a given transaction.
• Determine Tax Registration: Determines the tax registration status for the applicable taxes
t e r U s
of the parties involved in the transaction.
• Determine Tax Status: Determines the tax status of each applicable tax to use on the
transaction.
I n
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• Determine Tax Rate: Determines the tax rate for each applicable tax to use on the
transaction.
c
r a
• Determine Taxable Basis: Determines the amount to use upon which to calculate the tax
rate.
O • Calculate Tax Amounts: Calculates the tax and displays the calculation results.

Chapter 1 - Page 33
• Determine Recovery Rate: Where applicable, determines the recovery rate to apply to
each applicable tax on the transaction.
Determine Place of Supply
For example, in Europe the default for place of supply of goods is often Ship From. In the
United States, the default for place of supply of goods is often Ship To.
Determine Tax Applicability
You can include or exclude specific taxes if there are conditions which control when the tax is
applicable.
Determine Tax Registration
Normally, the default is Bill From Party, but there are cases, such as reverse charge or self
assessment, where the default is Bill To Party for specific transactions.
Determine Tax Status and Determine Tax Rate
For example, you can apply a zero rate to the sale of children’s clothes for United Kingdom
VAT. The system also looks for customer-specific tax exemptions and general exceptions that
may apply.
Determine Taxable Basis
In many cases, the taxable basis is the line amount, but this may or may not include certain
types of discounts. For example, in Brazil, there may be reductions in the taxable basis that
apply.
Calculate Tax Amounts
The normal calculation is taxable basis * rate. Defaults for both Taxable Basis and Tax
m y
Calculation Formulae are delivered as part of seeded data.
Determine Recovery Rate
d e
For example, for manufacturing companies, VAT on regular purchases used for company
business is 100% recoverable. However, if you are a financial institution which only makes ca
VAT exempt sales, you are not allowed to recover any taxes and the recovery rate would
e A
therefore be 0% on all purchases.
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Agenda
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Chapter 1 - Page 35
E-Business Tax Processing
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E-Business Tax Processing
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E-Business Tax, making use of its tax content repository, follows a series of tax determination
r a
steps. Most of these steps behave according to their underlying tax rules.
Once all rule conditions and results are evaluated, the system calculates taxes and stores them
in the tax lines repository. O ly
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The tax line repository has all necessary information needed for tax reporting. You can extract
tax report information from the repository. You can display this data in several formats such as
PDF, HTML and RTF.
n a e
applications.
t e r U s
Oracle eBusiness Tax provides a single solution for tax for all Oracle eBusiness Suite
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Chapter 1 - Page 36
Receivables Transaction Example
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This Receivables transaction example shows how E-Business Tax answers some basic business
r a
questions during its Tax Determination process.
• Tax regimes are identified based on the countries of the parties involved.
O ly
• A default value or a Place of Supply rule indicates the place of supply.
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This example illustrates the Tax Determination process. See: Oracle E-Business Tax: Part 1:
l
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Setting Up Tax Rules for a detailed discussion on the Tax Determination process.
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Chapter 1 - Page 37
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A default party type value or a tax registration rule determines from which party (first party or
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third party) to evaluate tax registration status.
The party classification is derived from the parties available in the transaction (first and third
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parties). That classification can be compared to the ones used as a tax determining factor in any
rule type.
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Chapter 1 - Page 38
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In the Transaction Lines window, other types of information are relevant for tax calculation:
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• Quantity times Unit Price is the default seeded Taxable Basis formula, but other formulas
can be defined.
O ly
• The item available in a given transaction line can potentially have one or more product
l & On
classifications, and these classifications can be used as a tax determining factor in any rule
type. The item itself or its classifications can also be used as part of Tax Exceptions
definition.
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Chapter 1 - Page 39
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In the Detail Tax Lines window, the Tax Rate times Taxable Basis is the default seeded Tax
a
Amount formula, but other formulas can be defined.
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Chapter 1 - Page 40
Guided Demonstration - Create a New Tax (Environmental)
Sign on
Field Value
User Name SSCNewall
Note. If you want to use
your User ID, you will
have to set up the
following
responsibilities:
• Tax Managers, SSC
FR
• Payables, SSC France
• Receivables, SSC
France
Password welcome
Responsibility Tax Managers, SSC FR
Creating a Tax Regime
m y
1. Navigate to the Create Tax Regime: Main Details page:
d e
• (N) Tax Configuration > Tax Regimes
ca
• (B) Create
e A
2.
l
Enter a new tax regime based on the following information:
c
Tax Regime Code
Field
r a FR ENV TAX 00
Value
Name O ly FR ENV TAX 00

Regime Level
l & On Country
Country Name
n a e France
Parent Regime Code
Effective From
t e r U s Blank
Current Date
Effective To
I n Blank
l e
Used to Group Regimes
c
Cleared
3.
r a Navigate to the Controls and Defaults region:
O • (H) Expand > Show Controls and Defaults

Chapter 1 - Page 41
4. Enter tax regime controls:
Field Value
Allow Tax Recovery Cleared
Allow Override and Entry of Cleared
Inclusive Tax Lines
Allow Tax Exemptions Cleared
Allow Tax Exceptions Cleared
5. Enter tax regime defaults:

Field Value
Tax Currency EUR
Minimum Accountable Unit 0.01
Rounding Rule Nearest
Tax Precision 2 (default)
6. Navigate to Create Tax Regime: Configuration Options page:
• (B) Continue
7. Enter tax regime configuration options:

m y
Party Name
Field
SSC France
Value
d e
Configuration for Taxes and Rules Common
ca
Effective From
e
Configuration
Current Date A
c l
8. Complete the tax regime setup:
r a
• (B) Finish
O ly
Creating a Tax
l & On
9.
a e
Navigate to the Create Tax page:
n
•
e r s
(N) Tax Configuration > Tax Regimes
t U
•
I n
Search for the Tax Regime you created in the above step:
c l e
Country Name
Field
France
Value
O ra
•
Tax Regime Code
(B) Go
FR ENV TAX 00

Chapter 1 - Page 42
• (I) Regime to Rate Flow
• (I) Create Tax
10. Create a new tax based on the following information:

Field Value
Tax Regime Code FR ENV TAX 00
(default)
Configuration Owner Global Configuration
Owner
Tax Source Create a new tax
(default)
Tax FR ENV TAX 00
Tax Name FR ENV TAX 00
Tax Type Environmental
Effective From Current Date
Effective To Blank
Geography Type Country
Parent Geography Type
Parent Geography Name
Country
France
m y
Tax Currency EUR (default)
d e
Minimum Accountable Unit 0.01 (default)
ca
Rounding Rule
Tax Precision
e
Nearest (default)
2 (default) A
Exchange Rate Type
c l Blank
11. Apply the tax setup: r a

• O ly
(B) Apply (The system returns you to the Regime to Rate Flow page.)
l & On
Creating a Tax Status
n a e
t e r U s
12. Navigate to the Create Tax Status page (from the Regime to Rate Flow page):
• (H) Expand All

I n
•
c l e
(I) Create Tax Status (on Tax Level Type row)
13. Create a new tax status based on the following information:
r a Field Value
O Tax Status Code FR ENV TAX 00

Chapter 1 - Page 43
Name FR ENV TAX 00
Effective To Blank
Set as Default Tax Status Yes
Effective To Blank
14. Apply the tax status setup:
• (B) Apply (The system returns you to the Regime to Rate Flow page.)
Creating a Tax Rate
15. Navigate to the Create Tax Rate page (from the Regime to Rate Flow page):
• (H) Expand All
• (I) Create Tax Rate (on Status Level Type row)
16. Create a new tax rate based on the following information:

Field
Tax Jurisdiction Code Blank
Value
m y
Tax Rate Code FR ENV TAX 00
d e
Rate Type Percentage
ca
Percentage Rate
Effective From
e
1
Current Date A
Effective To
c l Blank
17. Navigate to the Rate Details page:r a

O ly
• (I) Rate Details
l & On
18. Enter tax rate details:
n
Field a e Value
Tax Rate Name
t e r U s FR ENV TAX 00
I n
Set as Default Rate
Default Effective From
Select
Current Date
c l e
Effective To Blank
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Chapter 1 - Page 44
• (B) Apply (The system returns you to the Create Tax Rate page.)
Creating a Tax Jurisdiction
20. Navigate to the Create Tax Jurisdiction page:
• (T) Tax Configuration > (ST) Tax Jurisdictions
• (B) Create
21. Create a new tax jurisdiction based on the following information:

Field Value
Tax Jurisdiction Code FR ENV TAX 00
Tax Jurisdiction Name FR ENV TAX 00
Tax FR ENV TAX 00
Geography Type Country
Effective To Blank
m y
Geography Name
Precedence Level
France
300 (default)
d e
Collecting Tax Authority Blank
ca
Reporting Tax Authority
e
Blank
A
Set as Default Tax Jurisdiction
c l Select
Effective To
r a Current Date
Blank
O ly
& On
22. Apply the tax jurisdiction setup:
l
• (B) Apply
n a e
Creating Default Rules
t e r U s
n
23. Navigate to the Tax Rules page:
I
•
e
(N) Tax Configuration > Tax Rules
c l
r a
24. Access the rule types for your tax regime and tax:
Field Value
O Configuration Owner Global Configuration Owner

Chapter 1 - Page 45
Tax FR ENV TAX 00
• (B) Go
• (H) Expand All (The system displays 9 rule types.)
25. Enter tax rule defaults.
• Determine Place of Supply > (I) Set Default

Field Value
Rule Type Default Ship From
• (B) Apply
• Determine Tax Applicability > (I) Set Default

Field Value
Rule Type Default Applicable
• (B) Apply
• Determine Tax Registration > (I) Set Default

m y
Field Value
d e
Rule Type Default Bill From Party
ca
• (B) Apply
e A
•
l
Determine Tax Status > (I) Set Default
c
Field
Rule Type Default
r a Value
FR ENV TAX 00 (default)
O ly
• (B) Apply
l & On
•
a e
Determine Tax Rate > (I) Set Default
n
t
Rule Type Default
e r
Field
U s
Value
FR ENV TAX 00 (default)
• (B) Apply
I n
•
c l e
Determine Taxable Basis > (I) Set Default
O ra Field
Rule Type Default STANDARD_TB
Value

Chapter 1 - Page 46
• (B) Apply
• Calculate Tax Amounts > (I) Set Default

Field Value
Rule Type Default STANDARD_TC
• (B) Apply
Making Tax Available for Transactions
26. Navigate to the Tax Accounts page from the Taxes page:
• (N) Tax Configuration > Taxes
27. Search for the Tax you created in the Practice: Create a Regime to Rate Tax Model.
Field Value
Country Name France
Tax FR ENV TAX 00
• (B) Go
m y
• (I) Update
d e
28. Make the tax available for transactions:
Field Value
ca
Make Tax Available for Transactions
e
Select A
•
c l
(B) Apply (Displays warning – Validation Error: This tax does not have an exchange
r a
rate type. Are you sure you want to enable this tax?)
• (B) Yes
O ly
Entering an Invoice in Payables
l & On
Field
n a e Value
Responsibility
t e r U s Payables, SSC France
n
29. Navigate to the Invoices page.
I
•
e
(N) Invoices: Entry > Invoices
c l
r a
30. Enter a standard invoice based on the following header information:
Field Value
O Trading Partner Advantage Corp

Chapter 1 - Page 47
Supplier Site Advantage FR
Invoice Date Current Date
Invoice Number TAX TEST 00
Currency EUR
Amount 1206.00
31. Accept all other defaults.
32. Navigate to the Lines region.
• (ST) Lines
33. Enter invoice line information based on the following:

Field Value
Line 1
Type Item (default)
Amount 1000.00
Distribution Account 101.100.63580.0000.730.000.000
Description
GL Date
Test 00
Current Date
m y
Business Category Purchase Transaction
d e
Product Type Goods
ca
Ship To SSC France (default)
e A
34. Save your invoice.
c l
• (I) Save
r a
35. Validate your invoice.
O ly
• (B) Actions… 1
l & On
•
n
Select Validate check box.a e
• (B) OK
t e r U s
I n
36. Navigate to the Distributions window.
•
c l e
(B) All Distributions
r a
37. View the tax line distributions.
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Chapter 1 - Page 48
Entering an Invoice in Receivables
Field Value
Responsibility Receivables, SSC France
38. Navigate to the Transactions page.
• (N) Transactions > Transactions
39. Enter an invoice based on the following header information:

Field Value
Source Manual-Other (default)
Date Current Date (default)
GL Date Current Date (default)
Class Invoice (default)
Currency EUR (default)
Type Invoice (default)
Legal Entity SSC France (default)
40. Navigate to the Main region.
• m y
(ST) Main
d e
41. Enter ship to information:
Field Value
ca
Ship To Business World
e A
c l
42. Navigate to Main region of the Line Items page.
• (B) Line Items

r a
• (ST) Main O ly
l & On
43. Enter invoice line information based on the following:
Field
n a e Value
Num
t e r U s 1
Description
UOM I n Test 00
Ea
l e
Quantity
c
1
r a Unit Price 1000.00
O44. Save your invoice.

Chapter 1 - Page 49
• (I) Save
45. Navigate to the Detail Tax Lines window.
• (B) Tax
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Chapter 1 - Page 50
Summary
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Chapter 1 - Page 51
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Part 1: Oracle E-Business
Tax Basic Tax Configuration
Chapter 2
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Part 1: Oracle E-Business Tax Basic Tax Configuration

Chapter 2 - Page 1
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Chapter 2 - Page 3
Objectives
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Chapter 2 - Page 4
Agenda
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Chapter 2 - Page 5
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The Tax Definition tier of the E-Business Tax Architecture comprises the tax data that you set
r a
up for each tax regime and tax that your company or institution is subject to.
The tax authority designates the regulations and rates that apply to the tax regime. The main
O ly
components of the regime-to-rate flow provide the basic tax configuration for the tax regime
• Tax regime
l & On
and the taxes, rates, and jurisdictions that it contains. These main components are:
• Tax
n a e
• Tax Status
• Tax Rate
t e r U s
• Tax Jurisdiction
I n
c l e
This module discusses these components in detail.
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Chapter 2 - Page 6
E-Business Tax Home Page – External Dependencies & Tax
Configuration
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Chapter 2 - Page 7
E-Business Tax Configuration Flow – External Dependencies
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Responsibility: E-Business Tax Manager
c l
E-Business Tax Configuration Flow – External Dependencies
(N) Tax Managers > Tax Managers > Home

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O ly
Complete the setup tasks in the E-Business Suite applications that E-Business Tax uses for the
Regime-to-Rate tax-related processes. These setup tasks include:
& On
• Legal Entities and Establishments
l
• Lookup Codes
n a e
• Reporting and Collecting Tax Authorities
e r s
• Party Class Categories and Codes
t U
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Chapter 2 - Page 8
E-Business Tax Configuration Flow – Tax Configuration
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E-Business Tax Configuration Flow – Tax Configuration
(N) Tax Managers > Tax Managers > Home

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Tax Configuration
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Complete the E-Business Tax setup tasks to create a basic tax configuration for each of your
& On
tax regimes. The tax configuration setup tasks include:
l
n a e
• Tax Authority Party Tax Profiles
• First Party Legal Entity Party Tax Profiles
• Tax Regimes
t e r U s
• Taxes
• Tax Status
I n
l e
• Tax Jurisdictions
c
• Tax Rates
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Chapter 2 - Page 9
Tax Users
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Tax Users
Responsibility: System Administrator
c l
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(N) System Administrator > Security : User > Define
O ly
(N) System Administrator > Security : Responsibility > Define
Prior to creating a basic tax configuration, you need to set up your tax users and assign each
& On
user a tax-related responsibility. E-Business Tax provides the following tax responsibilities:
l
• Tax Manager
• Tax Administrator
n a e
• Oracle Tax Simulator
t e r U s
I n
The Tax Manager responsibility is the responsibility with the highest level of access to E-
Business Tax functionality. Assign the Tax Administrator responsibility to users who provide
c l e
E-Business Tax technical setup and support services. Assign the Oracle Tax Simulator
responsibility to users who test tax setups with the Oracle Tax Simulator.
a
You can set up additional responsibilities according to your requirements.
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Chapter 2 - Page 10
Practice - Create a New User
Overview
In this practice, you will create a new user.
Assumptions
• Replace XX with your terminal number or initials.
• You must have access to an Oracle Application Vision database or comparable training
or test instance at your site on which to complete this practice.
Tasks
Sign on
Field Value
User Name OPERATIONS
Password welcome
Responsibility System Administrator
m y
1. Navigate to the Define User window.
d e
2. Enter your user:
Field US Sales and Use Tax
c a
UK VAT
User Name
e
XXUSER
A
XXUSER
Password
c l welcome (tab, re-enter to

verify)
welcome (tab, re-enter to
verify)
3. r a
Enter the responsibilities for this user:
Field O ly US Sales and Use Tax UK VAT
Responsibility
l & On • Tax Managers • Tax Managers
n a e • Tax Managers, SSC

US 01
• Tax Managers, Vision
UK
t e r U s •
•
Tax Administrator
Oracle Tax Simulator
•
•
Tax Administrator
I n • Payables, SSC US OU • Payables Vision UK
c l e •
01
Receivables, SSC US
• Receivables Vision
UK
r a •
OU 01
Legal Entity Manager
•
•
System Administrator
O • System Administrator

Chapter 2 - Page 11
Security Group Standard (for all) Standard (for all)
4. Sign on as your new user.
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Chapter 2 - Page 12
Solution - Create a New User
Tasks
Sign on
Field Value
User Name OPERATIONS
Password welcome
Responsibility System Administrator
Add a User
1. Navigate to the Define User window.
• (N) Security : User > Define
2. Enter your user:

Field US Sales and Use Tax UK VAT
User Name XXUSER XXUSER
Password welcome (tab, re-enter to
verify)
y
welcome (tab, re-enter to
verify)
m
d e
Add Responsibilities
c a
3. Add the following responsibilities to your new username:
Field
e
US Sales and Use Tax A UK VAT
Responsibility
c l • Tax Managers • Tax Managers
r a
Note. (I) Add – to add additional
• Tax Managers, SSC
US 01
• Tax Managers, Vision
UK
lines
O ly • Tax Administrator • Tax Administrator
l & On •
•
Payables, SSC US OU
•
•
Payables Vision UK
n a e 01 • Receivables Vision
t e r U s • Receivables, SSC US
OU 01 •
UK
I n •
•
System Administrator
• System Administrator
c l e
Security Group Standard (for all) Standard (for all)
r a
Note. The instructor should include both the US and UK responsibilities for their user.
O • (I) Save

Chapter 2 - Page 13
• Close Form.
Login as New User
4. Exit Oracle Applications.
• (L) Logout
5. Log back into the system with your newly created User ID and password.
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Chapter 2 - Page 14
Profile Option Values
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Profile Option Values
Responsibility: System Administrator
c l
r a
(N) System Administrator > Profile > System
O ly
An optional implementation prerequisite task is to set values for E-Business Tax profile
options to control the availability of certain tax options and to maintain your Vertex or
Taxware installation.
l & On
Tax profile options include:
n a e
You can specify default values for E-Business Tax profile options.
e r s
• The eBTax: Allow Ad Hoc Tax Changes profile option controls which users can make ad
t U
hoc tax changes on the transaction line, such as selecting a different tax status or tax rate.
I n
The changes that a user can make also depend upon the details of the applicable tax
setups.
l e
• The eBTax: Allow Manual Tax Lines profile option controls which users can enter manual
c
tax lines on the transaction for the tax setups that allow this update.
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Chapter 2 - Page 15
• The eBTax: Allow Override of Customer Exemptions profile option controls the display of
the Tax Handling field on the transaction line. You use the Tax Handling field to apply
and update customer tax exemptions to transactions.
• The eBTax: Allow Override of Tax Classification Code profile option controls whether
users can update the tax classification code that is defaulted to the transaction line.
• The eBTax: Allow Override of Tax Recovery Rate profile option controls which users can
enter or update the calculated tax recovery rates on the transaction for the tax recovery
rate setups that allow this update.
• The eBTax: Inventory Item for Freight profile option lets Order Management use an
Inventory item defined as Freight on Receivables transaction lines. You can use the freight
Inventory item to control the tax rate on taxable freight amounts.
• The eBTax: Invoice Freight as Revenue profile option controls whether to consider freight
amounts as taxable line items (Oracle Order Management only) .
• The eBTax: Read/Write Access to GCO Data profile option controls whether users can set
up tax configuration data for the global configuration owner.
• The eBTax Taxware: Service Indicator profile option indicates whether taxes are
calculated on service or a rental transactions.
• The eBTax Taxware: Tax Selection profile option indicates whether Taxware uses
jurisdiction-level jurisdiction codes to calculate taxes.
• The eBTax Taxware: Use Nexpro profile option indicates whether Taxware uses the
Nexpro functionality. If you enable this option, additional configuration is required on the
Taxware side of the integration to achieve nexus-based taxation.
m y
• The eBTax Vertex: Case Sensitive profile option enables case-sensitive searches of Vertex
tax calculation data. The default value is Yes.
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Chapter 2 - Page 16
Legal Entity
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Legal Entity
Responsibility: Legal Entity Manager
c l
r a
(N) Legal Entity Manager > Legal Entities > (B) Create Legal Entity
O ly
Setting up the legal entities that represent your company is a mandatory implementation
prerequisite task. Use the Legal Entity Configurator to set up the following entities:
• First Party Legal Entity
l & On
• Legal Authorities
n a e
• First Party Legal Establishment
e r s
When you set up a legal entity or establishment, you can also set up party tax profile details,
t U
including general information, rounding rule, and tax registrations. Steps include:
I n
• Setting up the legal entities that represent your company.
l e
• Setting up a legal establishment record for each office, service center, warehouse and any
c
other location within the company that requires a registration with a tax authority for one
r a or more taxes. You set up legal establishments under a parent legal entity.
O

Chapter 2 - Page 17
• Set up associations between each legal establishment and a business entity. E-Business
Tax uses associated business entities to derive the correct legal establishment for the
transaction.
• Setting up a legal authority record for each tax authority that administers taxes in a tax
regime where you do business.
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Chapter 2 - Page 18
Lookup Codes
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Lookup Codes
Responsibility: System Administration
c l
r a
(N) System Administration > System Administration > Lookup Types
O ly
In addition to the other implementation prerequisite tasks, you can maintain existing lookup
codes and define additional lookup codes for E-Business Tax lookup types using the
& On
Application Object Library Lookups window. Tax lookup types include:
l
• ZX_INPUT_CLASSIFICATIONS
• ZX_OUTPUT_CLASSICATIONS
n a e
e r
• ZX_WEB_EXP_TAX_CLASSIFICATIONS
t
• ZX_EXEMPTION_REASON_CODE
U s
I n
• ZX_JEBE_VAT_TRANS_TYPE
l e
• ZX_REGISTRATIONS_REASON
c
• ZX_REGISTRATIONS_TYPE
r a
• ZX_REGISTRATIONS_STATUS
O • ZX_TAX_TYPE_CATEGORY

Chapter 2 - Page 19
Seeded Lookup Types
E-Business Tax provides these seeded ZX_REGISTRATIONS_TYPE lookup 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.
E-Business Tax provides these seeded ZX_REGISTRATIONS_STATUS lookup types: Agent,
Registered, and Not Registered.
The ZX_TAX_TYPE_CATEGORY lookup type contained these seeded tax types: Sales,
VAT, Excise, Customs Duty, and Environmental.
11i Migrated Data
Release 11i tax codes and tax groups migrate to E-Business Tax as tax classification codes.
Oracle Payables and Purchasing tax codes migrate as tax classification codes under
ZX_INPUT_CLASSIFICATIONS. Oracle Receivables and Projects tax codes migrate as tax
classification codes under ZX_OUTPUT_CLASSICATIONS.
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Chapter 2 - Page 20
Regime-to-Rate Flow for US Sales Tax
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Regime-to-Rate Flow for US Sales Tax
c l
An example of the US Sales Tax illustrates the Regime-to-Rate setup flow. You can define:
• The tax regime as US Sales Tax.
r a
O ly
• Taxes within the tax regime: State Sales Tax, County Sales Tax, City Sales Tax.
• One or more tax jurisdictions for each tax. For example, you can define a tax jurisdiction
for each county in California.
l & On
n a e
• A default Standard tax status for each tax.
• A tax rate for each tax status or tax jurisdiction. You identify the effective period for each
e r s
tax rate. When the tax authority changes the rate, you can apply an end date to the last
t U
period record and create a new record.
I n
• If multiple taxes apply to a transaction line, the system adds the tax rates and applies the
e
percentage to the transaction. For example, the sales tax rate for California State Sales Tax
l
is 7.25%, and the rate for San Mateo County Sales Tax is 1%. In San Mateo, California,
c
the system applies a total of 8.25% to transactions where both state and county sales tax
r a apply.
O • A tax accounts for each tax rate.

Chapter 2 - Page 21
Note: The above data examples were introduced just to illustrate the business flow and do not
represent the complete tax setup for the tax regime.
Defining Tax Regimes, Taxes and Tax Jurisdictions
E-Business Tax defines the term tax as a distinct charge imposed by a tax or legal authority
with its own rates and with the requirement to appear separately on invoices and/or in tax
reports. In terms of your actual tax configuration, E-Business Tax applies a still narrower
definition to the term tax, and introduces the more inclusive term tax regime.
The incidence of a tax on a specific geographical area is called a tax jurisdiction. A tax
jurisdiction is limited by a geographical boundary that encloses a contiguous political or
administrative area, most commonly the borders of a country or part of a country.
Defining Tax Statuses and Tax Rates
For each tax, a tax authority can specify one or more tax rates. In addition, tax authorities
usually revise their tax rates periodically. Along with the change in tax rates, tax authorities
typically divide the scope of what is taxed into categories, each of which carries a separate tax
rate. The tax status is used to define and maintain these categories. You define tax statuses
under the definition of a tax.
For each of the tax statuses that you define, you define one or more tax rates. For each tax rate,
you define one or more rate periods, which contain the actual percentage rates, based upon the
date ranges of their applicability. For each tax rate that you define, you can also specify a tax
jurisdiction, in which case the rate is only used if that tax jurisdiction applies to the transaction.
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Regime-to-Rate Flow for UK VAT
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Regime-to-Rate Flow for UK VAT
c l
An example of UK VAT also illustrates the Regime-to-Rate setup flow. You can define:
• The tax regime as UK VAT.
r a
• A single tax as UK VAT.
O ly
• A single tax jurisdiction for the United Kingdom (UK VAT).
l & On
• Multiple tax statuses for UK VAT, including Standard, Reduced, Zero Rated, and Exempt.
n a e
• A tax rate for each tax status. For example, 17.5% is the tax rate for the Standard tax
status; 15% is the rate for Inter-EU transactions; 5% is the rate for Reduced tax status; and
e r s
0% is the rate applicable for Zero Rated and Exempt tax statuses.
t U
Note: The above data examples were introduced just to illustrate the business flow and do not
I n
represent the complete tax setup for the country.
c l e
How you define your Regime-to-Rate configuration depends on your tax requirements. The
flow of the configuration steps are essentially the same for defining a US Sales Tax and UK
r a
VAT, with the exception of VAT recovery rates.
Defining Recovery Types and Recovery Rates
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Chapter 2 - Page 23
In VAT 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. Tax authorities designate the tax recovery rates that
indicate the extent of recovery for a specific tax.
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Chapter 2 - Page 25
Tax Regimes
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Tax Regimes
c l
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(N) Tax Managers > Tax Configuration > Tax Regime > (B) Create
O ly
Use the Create Tax Regime page to set up tax regimes for the taxes in each country and
geographic region where you do business and where a separate tax applies.
& On
A tax regime associates a common set of default information, regulations, fiscal classifications,
l
these functions:
n a e
and registrations to one or more taxes with the same tax requirement. The tax regime provides
t e r
• Groups similar taxes together.
U s
• Designates the geography within which taxes apply.
I n
• Defaults the settings and values you define to each tax in the regime.
c l e
• Contributes to the definition of configuration options and third party service subscriptions.
• Optionally provides a single registration for all taxes associated with the regime.
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• Defines the use of fiscal classifications.
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Chapter 2 - Page 26
Tax Regime Setup
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Tax Regime Setup
c l
Before you can set up tax regimes, you may need to complete one or more of these tasks:
Prerequisites
r a
Mandatory prerequisite steps include:
O ly
• Set up legal entities and operating units – Set up legal entities and operating units for all
& On
divisions of your company that will act as configuration owners of tax data.
l
n a e
• Enable currencies – Enable the currencies that will be used in tax calculation.
• Design TCA Geography Hierarchy Structures (if required by the country) – Ensure that
e r s
the TCA geography hierarchy contains a representation of each geography where a tax
regime applies.
t U
I n
• Set up party tax profiles – Set up a party tax profile for each legal entity and operating unit
c l e
that will act as a configuration owner.
Optional prerequisite steps include:
r a
• Set up tax zones – Set up tax zones for geographical regions governed by a tax regime that
do not conform to a standard geographical region.
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Chapter 2 - Page 27
• Set up exchange rate types – Set up exchange rate types, if necessary, to convert
transaction currencies to tax currencies.
• Set up tax authorities – Set up a party tax profile for each tax authority. You may want to
do this if you need to enter tax authorities in different tax configuration records.
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Agenda
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Chapter 2 - Page 29
Taxes
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Taxes
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(N) Tax Managers > Tax Configuration > Taxes > (B) Create
O ly
Use the Create Tax page to set up details of the taxes within a tax regime.
Each separate tax in a tax regime includes:
l & On
• Configuration owner, which determines the ownership and use of a tax and its associated
setup.
n a e
• Default values from the tax regime.
e r s
• Values specific to the tax, such as geography, currency, and the display of tax amounts.
t U
I n
• Settings for tax accounts, tax exemptions, tax exceptions (where applicable).
• Settings for tax recovery, where applicable.
l e
E-Business Tax defaults tax information from the tax regime to each tax that you create under
c
a regime. You can modify this information at the tax level according to your needs, as well as
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add additional defaults and overrides.
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Chapter 2 - Page 30
Tax Setup
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Tax Setup
c l
Before you can set up taxes, you may need to complete one or more prerequisite tasks.
Prerequisites
r a
O ly
You must set up a tax regime prior to setting up a tax.
l & On
• Set up ledgers and accounts – Set up ledgers and accounts for your tax accounts.
a e
• Set up tax reporting codes – Set up tax reporting codes to report on specific taxes.
n
t e r
• Set up tax types – Set up lookups for tax types.
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Agenda
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Chapter 2 - Page 32
Tax Statuses
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Tax Statuses
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(N) Tax Managers > Tax Configuration > Tax Statuses > (B) Create
O ly
Use the Create Tax Status page to set up the tax statuses that you need for each tax that you
create for a combination of tax regime, tax, and configuration owner.
& On
You define a tax status under a tax and a configuration owner, and define all applicable tax
l
values to its tax rates.
n a e
rates and their effective periods under the tax status. The tax status controls the defaulting of
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Chapter 2 - Page 33
Tax Status Setup
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Tax Status Setup
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Before you can set up tax Statuses, you may need to complete one or more prerequisite tasks.
Prerequisites
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O ly
You must set up a tax prior to setting up a tax status.
Optionally, you need to set up tax reporting codes to report on specific tax statuses.
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Chapter 2 - Page 35
Tax Rates
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Tax Rates
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(N) Tax Managers > Tax Configuration > Tax Rates > (B) Create
O ly
Use the Create Tax Rate and Tax Rate Details pages to set up tax rates for your tax statuses and
tax jurisdictions.
& On
For tax statuses, set up a tax rate record for each applicable tax rate that a tax status identifies.
l
n a e
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
t e r U s
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.
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Chapter 2 - Page 36
Tax Rate Setup
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Tax Rate Setup
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Before you can set up tax rates, you may need to complete one or more prerequisite tasks.
Prerequisites
r a
• Set up tax statuses. O ly
l & On
• Set up units of measure (for quantity rate types).
a e
n
e r
• Set up tax transaction type lookup codes - Set up lookups for transaction types to define
s
local tax authority codes both for reporting purposes and for controlling which rates
t
appear on an invoice.
U
I n
• Set up an offset tax - If a tax has an associated offset tax, you must enter the offset rate
c
rate. l e
code in the applicable tax rate record. At transaction time, this rate is used as the offset
r a
• Set up tax recovery rates and recovery types – Set up the recovery rates, tax recovery
types, and tax recovery rules that correspond to the tax rate record, if applicable for the
O tax.

Chapter 2 - Page 37
• Set up tax jurisdictions – Set up tax jurisdictions if you are setting up tax rates for a
specific tax jurisdiction.
• Set up tax reporting types – Set up tax reporting types to report on specific tax rates.
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Chapter 2 - Page 38
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Chapter 2 - Page 39
Tax Jurisdictions
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Tax Jurisdictions
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(N) Tax Managers > Tax Configuration > Tax Jurisdictions > (B) Create
O ly
Use the Tax Jurisdiction page to set up a geographic region or tax zone where a specific tax
authority levies a tax.
& On
At transaction time E-Business Tax derives the jurisdiction or jurisdictions that apply to a
l
n a e
transaction line based on the place of supply. E-Business Tax either uses a default place of
supply or derives a place of supply based on tax rules.
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Chapter 2 - Page 40
Tax Jurisdiction Setup
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Tax Jurisdiction Setup
c l
Before you can set up tax jurisdictions, you may need to complete one or more prerequisite
tasks.
Prerequisites r a
Mandatory prerequisite steps include:O ly
• Set up taxes.
l & On
n a e
• Set up tax statuses (for jurisdiction-based rates).
• Verify or set up the TCA master geography (for jurisdictions below the country level).
e r s
An optional prerequisite step includes setting up applicable tax zones that correspond to a tax
jurisdiction.
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Chapter 2 - Page 41
Practice - Create a Regime to Rate Tax Model
Overview
In this practice, you will create a new tax configuration using the regime to rate flow.
Note. These practices are for illustrative purposes and may not represent your true tax model. For
example:
• The recommended setup for US sales tax is to create three different taxes within the one
regime to define state, county, and city taxes. You would create multiple jurisdictions for
each tax to cover the states, counties, and cities that you need.
• The tax rates may not represent actual tax rates.
Note. The date assigned by the instructor cannot be later than the current date. This assigned date
will be used by the student throughout the practices.
Assumptions
• Replace XX with your terminal number.
m y
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Tasks
c a
Sign on
Field
e US Sales and Use Tax A UK VAT
User Name
c l XXUSER XXUSER
Password
r a welcome welcome
O ly Note. Use the password

you created.
Note. Use the
password you
l & On created.
Responsibility
n a e Tax Managers SSC US 01 Tax Managers Vision

UK

t e r U s
1. I n
Navigate to the Create Tax Regime page.
2.
c l e
Enter a new tax regime based on the following information:
O ra Field
Tax Regime Code and Name
US Sales and Use Tax
US SALES XX
UK VAT
UK VAT XX

Chapter 2 - Page 42
Regime Level Country Country
Country Name United States United Kingdom
Effective From Date Instructor assigned Instructor assigned
Effective To Date Blank Blank
3. Enter tax regime controls:

Allow Tax Recovery No Yes
Allow Override and Entry of No No
Inclusive Tax Lines
Allow Tax Exemptions Yes Yes
Allow Tax Exceptions Yes Yes

Tax Currency USD GBP
Minimum Accountable Unit 0.01 0.01
Rounding Rule
Tax Precision
Nearest
2
Nearest
2
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UK VAT
Party Name
e
SSC US 01
Note. Select the First A
Vision Industries
Note. Select both the
c l Party Legal Entity party First Party Legal Entity
r a type. and the Operating Unit

owning Tax Content
O ly party types.
Effective From Date

l & On
Configuration for Taxes and Rules Common Configuration
Instructor assigned
Common Configuration
Instructor assigned
n a e
Creating a Tax
6. t e r U s
Navigate to the Create Taxes page.
7. I n
Create a new tax based on the following information:
c l e Field US Sales and Use Tax UK VAT
O ra Tax Regime Code

Configuration Owner
US SALES XX
Global Configuration
Owner
UK VAT XX
Owner

Chapter 2 - Page 43
Tax and Tax Name US SALES XX UK VAT XX
Tax Type SALES VAT
Geography Type and Parent Country Country
Geography Type
Parent Geography Name United States United Kingdom
8. Enter tax controls:

Allow Tax Exceptions Yes Yes
Allow Tax Exemptions Yes Yes
Allow Tax Recovery N/A No
9. Navigate to the Create Tax Status page.

m y
Tax Status Code and Name US SALES XX
STANDARD
UK VAT XX
STANDARD
d e
Effective From Date Instructor assigned
c a
Instructor assigned
Effective To Date
e
Blank
A
Blank
Set as Default Tax Status
Effective From Date
c l Yes
Instructor assigned
Yes
Instructor assigned
Effective To Date
r a Blank Blank
Creating a Tax Rate O ly

l & On
11. Navigate to the Create Tax Rate page.
n a e
t r
Field
U s
e US Sales and Use Tax UK VAT

Tax Rate Code
I n US SALES XX
STANDARD
UK VAT XX
STANDARD
c l
Rate e 7% 10%
r a Effective From Date

Effective To Date
Instructor assigned
Blank
Instructor assigned
Blank
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Chapter 2 - Page 44
Tax Rate Name US SALES XX UK VAT XX
STANDARD STANDARD
Set as Default Rate Yes Yes
Default Effective From Date Instructor assigned Instructor assigned
Creating a Tax Jurisdiction
14. Navigate to the Create Tax Jurisdiction page.

Tax Jurisdiction Code and Name US SALES XX UK VAT XX
Tax Regime Code and Tax US SALES XX UK VAT XX
Geography Type Country Country
Effective To Date
Geography Name
Blank
United States
Blank
United Kingdom
m y
Set as Default Tax Jurisdiction Yes Yes
d e
Default Effective From Date Instructor assigned
a
Instructor assigned
c
Effective To Date
e
Blank
A
Blank
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O ly
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Chapter 2 - Page 45
Solution - Create a Regime to Rate Tax Model
Tasks
Sign on
Password welcome welcome
Note. Use the password Note. Use the
you created. password you
created.
Responsibility Tax Managers SSC US 01 Tax Managers Vision
UK
1. Navigate to the Create Tax Regime: Main Details page:
• (N) Tax Configuration > Tax Regimes
• (B) Create
m y
2. Enter a new tax regime based on the following information:
d e
Tax Regime Code
US SALES XX c
UK VAT XX
a
UK VAT
Name
e
US SALES XX A
UK VAT XX
Regime Level
c l Country Country
Country Name
r a United States United Kingdom
Parent Regime Code
Effective From O ly Blank
Instructor assigned
Blank
Instructor assigned
Effective To
l & On Blank Blank
Used to Group Regimes
n a e Cleared Cleared
3.
t e r U s
Navigate to the Controls and Defaults region:
•
I n
(H) Expand > Show Controls and Defaults
4.
l e
Enter tax regime controls:
c
r a Field
Allow Tax Recovery
Cleared Selected
UK VAT
O Note. This concept will

Chapter 2 - Page 46
be discussed in the Tax
Recovery module.
Allow Override and Entry of Cleared Cleared
Inclusive Tax Lines
Allow Tax Exemptions Selected Selected
Allow Tax Exceptions Selected Selected

Tax Currency USD GBP
Minimum Accountable Unit 0.01 0.01
Rounding Rule Nearest Nearest
Tax Precision 2 (default) 2 (default)
6. Navigate to Create Tax Regime: Configuration Options page:
• (B) Continue

m y
Party Name SSC US 01
Note. Select the First e
Vision Industries
d
Note. Select both the
Party Legal Entity party
type.
c a
First Party Legal Entity
and the Operating Unit
e A
owning Tax Content
party types.
Configuration for Taxes and Rules
c l Common Configuration Common Configuration
Effective From
r a Instructor assigned Instructor assigned
O ly
Note. Configuration options are discussed in the Configuration Owners and Service Providers
module.
8. Complete the tax regime setup:

l & On
n a e
• (B) Finish
Creating a Tax
t e r U s
9. I n
Navigate to the Create Tax page:
•
c l e
(N) Tax Configuration > Tax Regimes
r a • Search for the Tax Regime you created in the above step.
O Field US Sales and Use Tax UK VAT

Chapter 2 - Page 47
Country Name United States United Kingdom
Tax Regime Code US SALES XX UK VAT XX
• (B) Go
• (I) Regime to Rate Flow
• (I) Create Tax
10. Create a new tax based on the following information:

Tax Regime Code US SALES XX (default) UK VAT XX (default)
Configuration Owner Global Configuration Global Configuration
Owner Owner
Tax Source Create a new tax (default) Create a new tax
(default)
Tax US SALES XX UK VAT XX
Tax Name US SALES XX UK VAT XX
Tax Type SALES VAT
Effective From Instructor assigned Instructor assigned
m y
Effective To
Geography Type
Blank
Country
Blank
Country
d e
Parent Geography Type Country
c
Country a
Parent Geography Name
e
United States
A
United Kingdom
Tax Currency
Minimum Accountable Unit
c l USD (default)
0.01 (default)
GBP (default)
0.01 (default)
Rounding Rule
r a Nearest (default) Nearest (default)
Tax Precision
O ly 2 (default) 2 (default)
Exchange Rate Type
l & On Blank Blank
n a e
11. Navigate to the Controls and Defaults region:
•
t e r s
(H) Expand > Show Controls and Defaults
U
I
12. Enter tax controls: n
c l e Field
Allow Override and Entry of
Cleared Cleared
UK VAT
r a Inclusive Tax Lines
O Allow Tax Rounding Override Cleared Cleared

Chapter 2 - Page 48
Allow Override for Calculated Tax Selected Selected
Lines
Allow Entry of Manual Tax Lines Selected Selected
Use Legal Registration Number Cleared Cleared
Allow Duplicate Tax Registration Cleared Cleared
Numbers
Allow Multiple Jurisdictions Cleared Cleared
Allow Tax Recovery N/A Cleared
Note. This concept will
be discussed in the Tax
Recovery module. You
will create a new tax
for this regime that
allows tax recovery (in
a Guided Demo).
13. Navigate to the Create Tax Status page (from the Regime to Rate Flow page):
m y
• (H) Expand All
d e
• (I) Create Tax Status (on Tax Level Type row)
c a
e A
Tax Status Code
Field
c l US Sales and Use Tax

US SALES XX UK VAT XX
UK VAT
r a STANDARD STANDARD
Name
O ly US SALES XX
STANDARD
UK VAT XX
STANDARD
Effective From
l & On Instructor assigned Instructor assigned
Effective To
n a e Blank Blank
Effective From
t e r
Set as Default Tax Status
U s Yes
Instructor assigned
Yes
Instructor assigned
Effective To
I n Blank Blank
l e
c
r a • (B) Apply (The system returns you to the Regime to Rate Flow page.)
O

Chapter 2 - Page 49
Creating a Tax Rate
16. Navigate to the Create Tax Rate page (from the Regime to Rate Flow page):
• (H) Expand All
• (I) Create Tax Rate (on Status Level Type row)

Tax Jurisdiction Code Blank Blank
Tax Rate Code US SALES XX UK VAT XX
STANDARD STANDARD
Rate Type Percentage Percentage
Percentage Rate 7 10
Effective To Blank Blank
18. Navigate to the Rate Details page:
• (I) Rate Details

m y
d e
UK VAT
Tax Rate Name US SALES XX
c
UK VAT XXa
Set as Default Rate
e
STANDARD
Select A
STANDARD
Select
c l Instructor assigned Instructor assigned
Effective To
r a Blank Blank
20. Apply the tax status setup: O ly

•
l & On
(B) Apply (The system returns you to the Create Tax Rate page.)
n a e
•
t
Creating a Tax Jurisdiction e r U s
(B) Apply (The system returns you to the Regime to Rate Flow page.)
I n
21. Navigate to the Create Tax Jurisdiction page:
•
c l e
(T) Tax Configuration > (ST) Tax Jurisdictions
r a • (B) Create
O

Chapter 2 - Page 50
Tax Jurisdiction Code US SALES XX UK VAT XX
Tax Jurisdiction Name US SALES XX UK VAT XX
Tax US SALES XX UK VAT XX
Geography Type Country Country
Geography Name United States United Kingdom
Precedence Level 300 (default) 300 (default)
Collecting Tax Authority Blank Blank
Reporting Tax Authority Blank Blank
Set as Default Tax Jurisdiction Select Select
Default Effective From Instructor assigned Instructor assigned
23. Apply the tax jurisdiction setup:

m y
• (B) Apply
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Chapter 2 - Page 51
Summary
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Chapter 2 - Page 52
Part 2: Oracle E-Business
Tax Basic Tax Configuration
Chapter 3
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Chapter 3 - Page 3
Objectives
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Agenda
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Chapter 3 - Page 5
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The Tax Definition tier of the E-Business Tax Architecture comprises the tax data that you set
r a
up for each tax regime and tax that your company or institution is subject to.
Along with setting up records for the core regime-to-rate flow for each tax regime and tax,
O ly
there are additional records belonging to the Tax Definition tier. The use of these records is
regulations of your tax regimes.

l & On
optional or conditionally mandatory, depending on the details of your configuration and the tax
These additional records are:

n a e
• Tax zones.
• Tax accounts.
t e r U s
I n
• Tax reporting types.
c l e
• Mass creation of tax jurisdictions.
• Tax recovery rates.
a
This module discusses these additional records in detail.
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Chapter 3 - Page 6
E-Business Tax Home Page – External Dependencies & Tax
Configuration
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Chapter 3 - Page 7
Basic Tax Configuration – Additional Setup Options
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Basic Tax Configuration – Additional Setup Options
Depending on you tax requirements, you can define additional records as part of your basic tax
r a
configuration setup. You use various pages to set up these additional options. You navigate to
these pages from within another page or to the page directly from the E-Business Tax
O ly
homepage. For example, you can access the Tax Accounts page from the Tax page to set up tax
l & On
account defaults for the tax, or from the Tax Jurisdiction page to set up tax account defaults for
the tax jurisdiction. You navigate directly to the Tax Recovery Rates page from the E-Business
Tax homepage.
n a e
Tax Zones
t e r s
Set up tax zones to represent geographical regions from the point of view of a tax requirement.
U
I n
Tax zones let you group together regions otherwise separated by geographical or political
boundaries where the tax treatment is identical throughout these regions.
l
Tax Accounts
c e
Set up default tax accounts for the taxes in a tax regime to post the tax amounts derived from
r a
your transactions. The tax accounts you define serve as default accounting information for
taxes, tax rates, tax jurisdictions, and tax recovery rates.
O Tax Reporting Types

Chapter 3 - Page 8
Use tax reporting types to capture additional tax information on transactions for your tax
reports. You can use tax reporting types for your internal reporting needs and to fulfill country-
specific reporting requirements.
Mass Create Tax Jurisdictions
You can create multiple tax jurisdictions at once using the mass create functionality, for taxes
that relate to specific Trading Community Architecture (TCA) geographic hierarchies. E-
Business Tax uses the parent geography type or tax zone associated with the tax regime and tax
to create a tax jurisdiction for each record within the parent geography or tax zone type.
Tax Recovery Rates
Set up tax recovery rate codes for the recovery types identified on the taxes within a tax
regime. A tax recovery rate code identifies the percentage of recovery designated by the tax
authority for a specific transaction.
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Agenda
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Chapter 3 - Page 10
Tax Zones
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Tax Zones
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(N) Tax Managers > Advanced Setup Options > Tax Zone Types > (B) Create
O ly
Use the Create Tax Zone Type and Create Tax Zone pages to define tax zones. Tax zones
group existing geographical regions that share the same tax requirement.
& On
The use of tax zones is optional and depends on your overall tax setup planning. For example,
l
n a e
if a separate economic community exists in part of a country only, you can set up a tax zone
and corresponding tax regime for the applicable geographic area.
t e r U s
The tax zone setup makes use of the Trading Community Architecture (TCA) master reference
geography hierarchy. The master reference geography hierarchy identifies the hierarchical
• Country I n
structure of a country. For example, the geography hierarchy in the United States is:
• State
c l e
r a• County
• City
O • Postal Code

Chapter 3 - Page 11
The master reference geography hierarchy also 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.
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Chapter 3 - Page 12
TCA Geography Hierarchy
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TCA Geography Hierarchy
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Responsibility: Trading Community Architecture
r a
(N) Trading Community > Administration > Geography Hierarchy
O ly
Set up and maintain the TCA geography hierarchy for each country where you have a tax
requirement.
& On
Use the TCA geography hierarchy in these cases:
l
provincial taxes.
n a e
• Taxes that are levied at a level lower than the country level, for example, state or
e r s
• Tax characteristics, such as the tax rate, vary at a lower level than the country level.
t U
I n
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Chapter 3 - Page 13
Tax Zone Setup
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Tax Zone Setup
Prerequisites
c l
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Before you can set up tax zones, verify that the TCA master geography contains the geographic
information that you need. TCA provides seeded geography types for many countries.
O ly
If necessary, you can update an existing geography type, or set up new a geography type in
l & On
accordance with the structure of a country that you need. For example, for Canada, Provinces
are validated as part of the Geography Hierarchy whenever a tax address is created or
maintained.
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Chapter 3 - Page 14
Practice - Create Tax Zones
Overview
In this practice, you will create a tax zone type and a tax zone for a European Economic
Community (EU) tax zone.
Assumptions
Tasks
Sign on
Password welcome
Note. Use the password
you created.
welcome
y
you created.
m
Responsibility Tax Managers SSC FR
d e
Tax Managers Vision UK
Creating a Tax Zone Type

c a
1. Navigate to the Tax Zone Types page.
e A
2.
c l
Create a tax zone type based on the following information:
Field
r a Value
Tax Zone Type
O ly EU TAX ZONE XX
Country
l & On Blank
Zone Creation Allowed
n a e Yes
Creating a Tax Zone
t e r U s
3.
n
Navigate to the Tax Zone page.
I
4.
c l e
Create a tax zone based on the following information:
Field Value
O ra Tax Zone and Code

Code Type
EEC XX
Tax Geography Code

Chapter 3 - Page 15
Start Date Instructor assigned
End Date Blank
Time Zone CET
5. Add the following countries to the tax zone with the same effective dates as the tax zone:
• Austria
• Belgium
• France
• Germany
• United Kingdom
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Chapter 3 - Page 16
Solution – Create Tax Zones
Tasks
Sign on
Note. Use the password Note. Use the password
you created. you created.
Responsibility Tax Managers SSC FR Tax Managers Vision UK
Creating a Tax Zone Type
1. Navigate to the Tax Zone Types page.
• (N) Advanced Setup Options > Tax Zone Types
• (B) Create Tax Zone Type
2. Create a tax zone type based on the following information:

m y
Tax Zone Type
Field
EU TAX ZONE XX
Value
d e
Country Blank
c a
Zone Creation Allowed
e
Yes
A
•
c l
(B) Apply (The system returns you to the Tax Zone Types search page.)
Creating a Tax Zone

r a
3. Navigate to the Tax Zone page. O ly
•
l & On
EU TAX ZONE XX > (I) View Existing Zones
n a e
4.
• (B) Create Tax Zone
t e r U s
Create a tax zone based on the following information:
I n Field Value
c l
Code
e
Tax Zone EEC XX
EEC XX
r a Code Type Tax Geography Code
O Start Date Instructor assigned

Chapter 3 - Page 17
End Date Blank
Time Zone CET
5. Select countries to add to the tax zone:

Field Value
Add All
• (B) Go
Field Value
Country Name Austria
• (I) Quick Select

Field Value
Add All
• (B) Go
Field Value
Country Name Belgium

m y
Field Value
d e
Add All
ca
• (B) Go
Field
e Value A
Country Name
c l France
• (I) Quick Select r a

Field
O ly Value
Add
l & On All
• (B) Go
n a e
Country Name
t e r
Field
U s Germany
Value
I n
•
c l e
(I) Quick Select
Field Value
O ra
•
Add
(B) Go
All

Chapter 3 - Page 18
Field Value
Country Name United Kingdom
• (B) Apply
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Chapter 3 - Page 19
Agenda
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Chapter 3 - Page 20
Define Tax Accounts
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Define Tax Accounts
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(N) Tax Managers > Tax Configuration > Taxes > (B) Tax Accounts
O ly
(N) Tax Managers > Tax Configuration > Tax Rates > (B) Tax Accounts
(N) Tax Managers > Tax Configuration > Tax Jurisdictions > (B) Tax Accounts
l & On
Use the Create Tax Accounts page to set up tax accounts under a primary ledger and operating
n a e
unit. The system posts calculated tax amounts to the specified operating unit accounts at
transaction time. The actual account information that the system uses depends upon subledger
accounting rules.
t e r
You can define tax accounts for:
U s
• Taxes
I n
c l e
• Tax rates
• Tax jurisdictions
r a
Note: All tax accounts defined at the tax level default to the tax rates level for the same tax and
operating unit. You can update these default tax accounts in the tax rate setup.
O

Chapter 3 - Page 21
See: Setting Up Tax Accounts, Oracle E-Business Tax User Guide for a description of each
account.
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Chapter 3 - Page 22
Tax Account Setup
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Tax Account Setup
c l
Before you can set up tax accounts, you may need to complete one or more prerequisite tasks.
Prerequisites
r a
O ly
• Set up primary ledgers and subledgers.
l & On
• Set up operating units and assign them to primary ledgers.
• Set up taxes.
n a e
t e r
You must set up and maintain accounting information before you can set up tax accounts for
s
the applicable primary ledgers and operating units.
U
create:
I n
Optional prerequisite steps include setting up records for the default accounts that you want to
l e
• Set up tax rates.
c
• Set up tax recovery rates.
r a
• Set up tax jurisdictions.
O Accounts and Accounting Information

Chapter 3 - Page 23
Responsibility: General Ledger
(N) General Ledger > Setup : Financials : Accounting Setup Manager > Accounting Setups
(N) General Ledger > Setup : Accounts > Chart of Accounts Mapping
Review and complete these accounting setup tasks according to your requirements:
• Set up the chart of accounts, accounting calendar and currency for the primary ledger of
your legal entities and, if applicable, any secondary ledgers.
• Define balancing segment values for the legal entities involved in tax transactions.
• 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 details of the accounting setups.
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Chapter 3 - Page 24
Practice - Create Tax Accounts
Overview
In this practice, you will create tax accounts at the tax level.
Assumptions
Tasks
Sign on
you created.
Note. Use the
password you
created.
m y
Responsibility Tax Managers SSC US 01
d e
Tax Managers Vision
UK
c a
Creating Tax Accounts
e A
1.
l
Navigate to the Tax Accounts page from the Taxes page.
c
2.
r a
Access the tax accounts for your tax regime and tax created in the Practice: Create a Regime
to Rate Tax Model.
O ly
3.
Field
l & On
Enter tax accounts based on the following information:
US Sales and Use Tax UK VAT
Ledger
n a e SSC US Vision UK
Operating Unit
t e r U s SSC US 01 Vision Industries

Tax Expense
I n
Tax Recoverable/Liability
101.100.63920.0000.730.000.000 Blank
101.100.25300.0000.730.000.000 03-000-2520-000-000
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Chapter 3 - Page 25
Solution – Create Tax Accounts
Tasks
Sign on
created.
UK
Creating Tax Accounts
m y
Country Name
United States
d e
UK VAT
United Kingdom
Tax Regime Code US SALES XX
c a
UK VAT XX
Tax
e
US SALES XX
AUK VAT XX
• (B) Go
c l
• (I) Update Tax
r a
3. Navigate to the Tax Accounts page:O ly
• (B) Tax Accounts
l & On
n a e
4. Enter the ledger:
t e r
Field
U s US Sales and Use Tax UK VAT
Ledger
I n SSC US Vision UK
•
l e
(B) Create
c
r
5.
a Enter tax accounts based on the following information:
O Field US Sales and Use Tax UK VAT

Chapter 3 - Page 26
Operating Unit SSC US 01 Vision Industries
Tax Expense 101.100.63920.0000.730.000.000 Blank
Tax Recoverable/Liability 101.100.25300.0000.730.000.000 03-000-2520-000-000
• (B) Apply
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Chapter 3 - Page 27
Agenda
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Chapter 3 - Page 28
Tax Reporting Types
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Tax Reporting Types
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(N) Tax Managers > Defaults and Controls > Tax Reporting Types > (B) Create
O ly
Use the Create Tax Reporting Type page to define tax reporting types. Tax reporting types
capture additional tax information on transactions. A tax reporting type identifies a specific
l & On
unit of information, such as a date or a text comment, to associate with a specific tax usage,
such as a fiscal classification or tax jurisdiction. You can also create a group of tax reporting
a e
codes for a tax reporting type, to provide additional granularity for tax reporting. You can add
n
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tax reporting codes to a tax reporting type at any time.
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Chapter 3 - Page 29
Tax Reporting Type Setup
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Tax Reporting Type Setup
c l
Before you can set up tax reporting types, you may need to complete one or more prerequisite
tasks.
Prerequisites r a
O ly
Conditionally mandatory prerequisite steps include:
& On
• Set up tax regimes (for regime-specific reporting).
l
n a e
• Set up taxes (for tax-specific reporting).
If you associate a tax regime or tax with a tax reporting type, then this tax reporting type and
e r s
its associated tax reporting codes are only available to the tax regime or tax.
t U
You must associate a tax regime with tax reporting types except for tax reporting types
I n
associated with fiscal classifications, tax registrations, and party tax profiles.
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Chapter 3 - Page 30
Agenda
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Chapter 3 - Page 31
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(N) Tax Managers > Tax Configuration > Tax Jurisdictions > (B) Mass Create
O ly
Use the Mass Create Tax Jurisdictions page to create a tax jurisdiction for each record within a
parent geography or tax zone type. Use the Update Mass Created Tax Jurisdictions page to
& On
review the jurisdictions created and to modify information for individual tax jurisdictions.
l
n a e
For example, you can create a county jurisdiction for every county in the parent geography
type of State and parent geography name of California.
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Chapter 3 - Page 32
Mass Create Tax Jurisdictions Setup
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Mass Create Tax Jurisdictions Setup
c l
Before you can mass create tax jurisdictions, you may need to complete one or more
prerequisite tasks.
Prerequisites r a
• Set up taxes.
l & On
n a e
• Set the Allow Mass Creation of Jurisdictions option for the tax – You must set this option
in the tax record in order to set up mass jurisdictions for a tax jurisdiction related to this
tax.
t e r U s
• Set up tax statuses and tax rates (for jurisdiction-based rates) – You must set up tax rate
I n
records if you are using jurisdiction-based rates for the jurisdictions that you will create in
mass.
l e
• Enable multiple jurisdictions for the tax – You set the Allow Multiple Jurisdictions option
c
in the tax record to be able to define tax jurisdictions for this tax in more than one
r a geographic region.
O • Set up TCA master geography for the applicable parent geography and child records.

Chapter 3 - Page 33
An optional prerequisite step includes the set up of tax zones, if the tax jurisdictions relate to a
specific tax zone.
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Chapter 3 - Page 34
Agenda
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Chapter 3 - Page 35
Tax Recovery Rates
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Tax Recovery Rates
c l
r a
(N) Tax Managers > Tax Configuration > Tax Recovery Rates > (B) Create
O ly
Use the Create Tax Recovery Rate page to set up recovery rates for a tax. You must set up tax
recovery rates for all of your recoverable taxes.
& On
A recoverable tax is a tax that allows full or partial recovery of taxes paid on purchases, either
l
n a e
as a recoverable payment or as an offset against taxes owed. For example, most VAT-type
taxes allow for full recovery of taxes paid on goods and services that relate to taxable business
t e r U s
supplies. 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.
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Chapter 3 - Page 36
Summary
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Chapter 3 - Page 37
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Managing Party Tax Profiles
Chapter 4
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Chapter 4 - Page 1
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Chapter 4 - Page 3
Objectives
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Chapter 4 - Page 4
Agenda
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Chapter 4 - Page 5
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The Configuration tier identifies the factors that participate in determining the tax on an
r a
• Party - The parties involved in the transaction.
O ly
• Product – The products transacted.
& On
• Place - The places involved in the transaction, including the ship from and ship to
l
n a e
• locations, and the bill from and bill to locations.
• Process - The kind of transaction that takes place.
e r s
This module discusses the associations between the parties of a transaction and party-related
t U
variables, such as party fiscal classifications, tax registrations, and tax exemptions.
I n
Note: The setup of party fiscal classifications is discussed in detail in a subsequent module,
c l e
Oracle E-Business Tax: Fiscal Classifications.
r a
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Chapter 4 - Page 6
E-Business Tax Home Page – Party Tax Profiles
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Chapter 4 - Page 7
Using Party Tax Profiles
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Using Party Tax Profiles
c l
The Party Tax Profile is the central repository of tax-related information for all parties that
r a
participate in your tax-related transactions. This includes first party legal entities and
establishments, operating units, tax authorities, and third party customers and suppliers.
Party Tax Profile O ly
l & On
A party tax profile record is the body of information that relates to a party’s transaction tax
activities. A tax profile can include tax registrations, tax exemptions, configuration options,
a e
main and default information, party fiscal classifications, tax reporting codes, and account tax
n
in your tax transactions.
t e r U s
details (for migrated data). You must set up a tax profile for each first and third party involved
Business Tax menu.

I n
Party Tax Profile can be accessed uniformly within standard party flows or directly from the E-
l e
Party Tax Profile and Tax Registration components are supported in three flows:
c
• Legal entity/establishment flows.
r a
• Supplier/supplier site flows.
O • Customer and customer account sites flows.

Chapter 4 - Page 8
Configuration Options
Configuration options identify the relationship between each first party legal entity and
operating unit in your company and the tax regimes that each first party and legal entity is
subject to. You must set up a configuration option for each combination of configuration owner
(first party legal entity/operating unit) and tax regime, where the party or operating unit is
subject to any tax regulations belonging to a tax regime. The configuration options determine
which configuration owners can own and maintain the tax content of specific tax regimes.
Tax Registrations
A tax registration contains information related to a party’s transaction tax obligation with a tax
authority for a tax jurisdiction where it conducts business. Set up tax registrations for your first
party legal establishments and your third party customers/customer sites and suppliers/supplier
sites.
Customer Tax Exemptions
A customer tax exemption is a discount/surcharge or replacement percentage from the base tax
rate that reduces the applicable tax on a Receivables transaction. Set up tax exemptions for
your third party customers and customer sites to reflect the eligibility of customers for tax
exemptions according to the tax authority.
Party Fiscal Classifications
A party fiscal classification determines, for example, when taxes apply to a party, how much
tax applies, and what percentage of the tax is recoverable. These tax requirements are usually
defined by the tax authority for the taxes of a given tax regime. Set up party fiscal
classifications for your first parties, customers and customer sites, and suppliers and supplier
m y
sites.
Note: Party fiscal classifications are discussed in further detail in Oracle E-Business Tax:
d e
Fiscal Classifications.
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Chapter 4 - Page 9
Party Tax Profile
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Party Tax Profile
c l
r a
(N) Tax Managers > Parties > Party Tax Profiles
O ly
Depending on the party type of the tax profile that you are creating, the system displays various
tabs on the Create Party Tax Profile page.
Main Information
l & On
n a e
Enter main information for all party types, according to your requirements. This information
controls certain default values and settings on invoices associated with the party.
e r s
Note: You can set some of these values at the tax registration level. If you do, then tax
t U
registration settings override the values you set at the main information level. For third party
I n
tax profiles, invoice controls defined at the tax registration level override invoice controls at
the account tax details level, if defined.
l e
Party tax profile main information includes:
c
r a
• Self-assessment option. – Set this option to self-assess taxes on Payables invoices
belonging to the party.
O

Chapter 4 - Page 10
• Tax classification code – If applicable, enter a tax classification code to use as determining
factor in tax rules for this party or party site. You only enter a tax classification code if
you intend to use the Direct Tax Rate Determination tax rule on transactions belonging to
this party.
• Rounding level/rounding rule – Set the rounding level and rounding rule to use on
invoices belonging to this party. The rounding level indicates whether to apply rounding
to calculated tax amounts once for each tax rate per invoice (header level) or to the
calculated tax amount on each invoice line (line level). The rounding rule is the method to
use to round off calculates tax amounts to the minimum accountable unit (Up, Down,
Nearest).
Note: If you updated the rounding precedence hierarchy for a specific configuration owner
and event class, then the related transactions look instead for rounding level information
according to the configuration owner and event class settings.
• Tax inclusive option – Select the Set Invoice Values as Tax Inclusive check box if the
party intends to send or receive invoices with invoice line amounts inclusive of tax.
• Use Subscription of the Legal Entity (operating unit) – Release 11i tax data in Payables,
Receivables, and other applications migrates to E-Business Tax as operating units
containing their own tax content. Set this option if you want the operating unit to use the
tax content of the associated legal entity at transaction time.
Note: This is an irreversible setting. Once you associate the operating unit with its legal
entity, you cannot update the operating unit tax profile or maintain separate tax content for
this operating unit.
• Allow Tax Applicability (third party) - Set this option to automatically calculate taxes for
m y
this party whenever the party acts as a supplier. You can set this option, for example, for
customers that also act as suppliers on transactions.
d e
c
• Allow Offset Taxes (third party) - Set this option to define whether the system considers
a
Note: For third parties without a tax profile record, the default is to allow tax applicability.
offset taxes for transactions from this party.
e A
Tax Registrations
c l
The tax registration contains information related to a party’s transaction tax obligation with a
r a
tax authority for a tax jurisdiction where it conducts business. The Tax Registrations page is
available to first party legal establishments and third parties.
Classifications O ly
l & On
There are two types of classifications:
• Party fiscal classification
n a e
• Legal classification.
e r s
The party fiscal classifications optionally assigned to a party are used as determining factors in
t U
tax rules. The Classifications page is available to the:
I n
• First Party Legal Entity.
l e
• First Party Legal Establishment.
c
• Third Party.
r a• Third Party Site.
O

Chapter 4 - Page 11
Legal classifications are assigned to legal entities. You assign these classifications using the
Legal Entity module.
Tax Reporting Codes
The tax reporting codes optionally assigned to a party capture tax information from party
transactions for both internal and tax authority reporting requirements. The Tax Reporting
Codes page is available to the:
• First Party Legal Establishment.
• Third Party.
• Third Party Site.
The configuration options identify the tax regimes associated with a first party legal
entity/operating unit acting as a configuration owner of tax content. The Configuration Options
page is available to the:
• Operating Unit owning Tax Content.
Account Tax Details
The account tax details maintain Release 11i migrated tax information for customer and
supplier accounts. The Account Tax Details page is available to the:
• Third Party.
• Third Party Site.
m y
The account details overrides the details at the third party and third party site level, if
d e
applicable.
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Chapter 4 - Page 12
First Party Legal Entity Tax Profile
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First Party Legal Entity Tax Profile
c l
r a
O ly
Once you select a first party legal entity on the Party Tax Profiles page, navigate to the Create
Tax Profile page to set up tax profiles for your first party legal entities and legal
establishments.
l & On
n a e
You set up legal entities and establishments using the Oracle Legal Entity Manager. You can
also enter party tax profile and tax jurisdiction information when you create and update legal
t e r U s
entities, as well as tax-related information for associated business entities. Legal classifications
appear as read-only data in the party tax profile.
I n
First party legal entities identify your organization to the relevant legal authorities, for
l e
example, a national or international headquarters. When you create a legal entity, the system
c
automatically creates a legal entity establishment.
r a
To set up a party tax profile for a first party legal entity:
O

Chapter 4 - Page 13
• Enter main and default information, such as set for self assessment / reverse charge, tax
classification, and rounding levels and rules.
• Optionally enter the party fiscal classifications, such as associated legal and fiscal
classifications.
• Optionally enter tax reporting codes.
• Enter tax configuration options to associate tax regimes with the party.
Note: You can set up this tax information as part of the Legal Entity maintenance flow.
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Chapter 4 - Page 14
First Party Legal Establishment Tax Profile
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First Party Legal Establishment Tax Profile
c l
r a
O ly
Select a first party legal establishment as a party type on the Party Tax Profiles page to create
and update the tax profile.
First Party Legal Establishments
l & On
n a e
First party legal establishments identify each office, service center, warehouse and any other
location within the organization that has a tax requirement. The system automatically creates a
t e r U s
legal entity establishment when you create a legal entity. However, you can create additional
legal establishments according to your needs. For each legal establishment there are one or
I n
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 establishment:
l e
• Enter main and default information.
c
r a
• Enter the tax registrations required for this party.
• Optionally enter the party fiscal classifications.
O • Optionally enter tax reporting codes.

Chapter 4 - Page 15
Note: You can set up this tax information as part of the Legal Entity Establishment
maintenance flow.
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Chapter 4 - Page 16
First Party Tax Profile Setup
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First Party Tax Profile Setup
c l
Before you can set up first party tax profiles, you may need to complete one or more
prerequisite tasks.
Prerequisites r a
O ly
& On
• Set up legal entities and legal establishments.
l
• Set up tax regimes.
n a e
e r s
• Set up legal entity secondary establishments.
t U
• Set up taxes.
I n
l e
• Set up lookup codes.
c
• Set up party fiscal classifications.
r a• Set up tax reporting types.
O

Chapter 4 - Page 17
Operating Unit Tax Profile
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Operating Unit Tax Profile
c l
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O ly
Once you select an operating unit owing tax data on the Party Tax Profiles page, navigate to
the Update Party Tax Profile page to modify the tax profile for your operating unit.
& On
Release 11i tax data in Oracle Payables, Receivables, and other applications migrates to E-
l
n a e
Business Tax as operating units containing their own tax content. To help you manage the tax
content of operating units, you can use the operating unit tax profile in either of two ways:
t e r U s
• Indicate that tax setup is used and maintained by a specific operating unit.
• Indicate that operating unit tax setup is used and maintained based on the configuration of
I n
the associated legal entity at transaction time. The tax setup of the associated legal entity
setup is either specific to the legal entity or shared across legal entities using the Global
l e
Configuration Owner setup.
c
This concept is also discussed in Oracle E-Business Tax: Appendix A: Managing Migrated Tax
r a
Data.
O

Chapter 4 - Page 18
Tax Authority Tax Profile
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Tax Authority Tax Profile
Responsibility: Legal Entity Manager
c l
r a
(N) Legal Entity Manager > (T) Legal Entities > (B) Create Legal Entity
O ly
Use the Oracle Legal Entity Manager to set up each tax authority as a legal authority for
transaction tax. After you create the tax authority, you can select a Tax Authority as a party
& On
type and update the tax profile on the Party Tax Profiles page.
l
n a e
The tax authority party tax profile identifies a tax authority party as a collecting authority
and/or a reporting authority. A collecting tax authority manages the administration of tax
reports.
t e r U s
remittances. A reporting tax authority receives and processes all company transaction tax
I n
To set up a party tax profile for a tax authority:
• If applicable, designate the tax authority as a collecting and/or reporting authority.
l e
• Enter any applicable tax reporting codes. Tax registration is not available for a tax
c
authority, they utilize tax reporting codes.
r a
O

Chapter 4 - Page 19
Third Party Tax Profile
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Third Party Tax Profile
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r a
O ly
Once you select a third party or third party site on the Party Tax Profiles page, navigate to the
Create Tax Profile page to set up tax profiles for your customers, customer sites, suppliers, and
supplier sites.
l & On
n a e
To set up a party tax profile for a third party or third party site:
• Enter main and default information, such as allow for tax applicability, allow offset taxes,
t e r U s
set for self assessment / reverse charge, and rounding levels and rules.
• Enter the tax registrations required for this party.
I n
• Optionally enter the party fiscal classifications, such as associated legal and fiscal
c l e
classifications.
• Optionally enter tax reporting codes.
r a
• Update migrated account tax details.
Note: You can set up this tax information as part of the relevant third party maintenance flow
O (for example, customer and supplier maintenance).

Chapter 4 - Page 20
Account Tax Details
Use the Account Tax Details region to maintain migrated account tax information. Use the
third party site Supplier Site Tax Details region to maintain operating unit supplier site tax
information. Use the third party site Customer Account Site Business Purpose Tax Details
region to maintain operating unit customer account ship-to site and bill-to site tax information.
This concept is discussed in detail in Oracle E-Business Tax: Appendix A: Managing Migrated
Tax Data.
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Chapter 4 - Page 21
Third Party Tax Profile Setup
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Third Party Tax Profile Setup
c l
Before you can set up third party tax profiles, you may need to complete one or more
prerequisite tasks.
Prerequisites r a
O ly
A mandatory prerequisite step includes set up parties.
& On
l
• Set up taxes.
n a e
e r
t U s
I n
• Set up lookup codes.
• Set up party fiscal classifications.
l e
• Set up tax reporting types.
c
• Set up customer and supplier accounts.
r a
O

Chapter 4 - Page 22
Agenda
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Chapter 4 - Page 23
Self-Assessment Setup
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Self-Assessment Setup
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A self-assessed tax is a tax calculated and remitted for a transaction, where tax was not levied
r a
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
O ly
known as reverse charge or use tax in certain tax regimes.
Self-Assessment Options
l & On
You can let a first party self-assess the taxes calculated on the Payables invoices it receives.
n a e
You can set the self-assessment option:
t e r U
• At the tax registration level. s
• At the tax profile level to default to the tax registrations that you create for this party.
I n
• On an individual tax line.
c l e
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.
r a
The specific tax registration record that E-Business Tax uses is derived either from Determine
Tax Registration rules or from the default tax registration.
O Self-Assessment Application

Chapter 4 - Page 24
Depending on the level at which this first party establishment tax registration is created, the
self-assessment will apply to:
• All taxes of the tax regime, if the tax registration is defined for the tax regime only.
• All tax jurisdictions of the tax, if the tax registration is defined for the tax regime and tax.
• A specific tax jurisdiction of the tax, if the tax registration is defined for the tax regime,
tax, and tax jurisdiction.
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Chapter 4 - Page 25
Agenda
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Chapter 4 - Page 26
Offset Taxes
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Offset Taxes
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An offset tax calculates and records third party Payables tax liabilities for reverse charges, self-
r a
assessments, and Consumer's Use tax (US). An offset tax record is a matching, duplicate
record with negative amounts that reduces or completely offsets the tax liability recorded in the
tax transaction.
O ly
Tax Recovery
l & On
Use offset taxes when the tax requirement includes creating offset general ledger postings.
n a e
You cannot update the recovery rate on an offset tax line. The recovery rate is always 100% in
t e r U s
order to create credit entries that match the original tax amounts. When you create an offset
tax, you enter a primary recovery type with a recoverable rate of 100% and a 100% recovery
rate.
I n
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Chapter 4 - Page 27
Offset Taxes Setup
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Offset Taxes Setup
c l
To set up for offset taxes, you must perform these tasks;
r a
• Enable offset tax calculations for each applicable transaction event and party.
O ly
• Set up the offset tax, tax status, and tax rate.
• Set up the original tax and assign the offset tax rate code to the original tax rate.
Enable Offset Tax Calculations
l & On
a e
Perform these tasks to enable offset tax calculations:
n
t e r
1. Review the offset tax setting for Payables transaction events.
s
a. Allow Offset Tax Calculation option enables the calculation of offset taxes for a
U
I n
transaction event.
b. Offset Tax Basis indicates the party whose transactions are involved in offset tax
c l e
creation.
2. Update the offset tax basis for the combinations of configuration owners and transaction
r a events that you want, if applicable.

3. Set the Allow Offset Taxes option for the applicable third parties. Set this option for each
O third party involved in offset tax transactions.

Chapter 4 - Page 28
Agenda
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Chapter 4 - Page 29
Tax Exemptions
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Tax Exemptions
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O ly
Once you select a third party or third party site on the Party Tax Profiles page, navigate to the
Create Tax Exemptions page to set up tax exemptions for your third party customers and
customer sites.
l & On
n a e
Tax exemptions can apply to a specific tax, tax status, tax jurisdiction, or product. You can set
up a tax exemption at regime, tax, status, or rate level, for a specific jurisdiction or for all
t e r
discount/surcharge or a new rate.
U s
jurisdictions, for a specific product or for all products. Tax exemptions are defined as a
Exemption Setup Tasks

I n
Use the third party tax exemption record to maintain information about a customer or customer
l e
site tax exemption.
c
In addition to the third party tax exemption record, you must also complete the appropriate
r a
setups in order for E-Business Tax to calculate tax exemptions. These setups are:
O

Chapter 4 - Page 30
• Set the eBTax: Allow Override of Customer Exemptions profile option to control the
display of the Tax Handling field on the transaction line. You use the Tax Handling field
to select the applicable tax exemption value for the transaction line. E-Business Tax
processes tax exemptions in different ways depending upon the value you choose.
• Set the Allow Tax Exemptions option at the levels that correspond to the tax exemption.
• Indicate whether you are creating tax exemptions for the tax, or using tax exemptions
previously created for an existing tax for each applicable tax.
• Verify that the applicable event class allows tax exemptions. If it does not, then set up
configuration owner tax options for the applicable configuration owner and event class to
include tax exemptions.
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Chapter 4 - Page 31
Tax Exemptions Setup
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Tax Exemptions Setup
c l
Before you can set up tax exemptions, you may need to complete one or more prerequisite
tasks.
Prerequisites r a
• Set up customer third parties.
l & On
n a e
• Set up taxes (for exemptions for a specific tax).
e r s
• Set up tax statuses (for exemptions for a specific tax status).
t U
I n
• Set up tax rates (for exemptions for a specific tax rate).
• Set up tax jurisdictions (for exemptions for a specific tax jurisdiction).
l e
• Set up inventory organizations (for product exemptions).
c
• Set up inventory items (for product exemptions).
r a
An optional prerequisite step includes set up exempt reason lookup codes.
O

Chapter 4 - Page 32
Agenda
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Chapter 4 - Page 33
Tax Registrations
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Tax Registrations
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O ly
Once you select a first party legal establishment, or a third party or third party site, on the Party
Tax Profiles page, navigate to the Create Tax Registration Details page to set up tax
location.
l & On
registrations. In some cases you may need to create multiple tax registrations for a single
n a e
E-Business Tax uses tax registrations in tax determination and tax reporting. For each tax that
t e r U s
you create, you must define either a default tax registration or a tax rule for the rule type
Determine Tax Registration. This rule determines which tax registration is stamped on a
transaction.
I n
Tax Registration Setup Tasks
l e
You must set up a separate tax registration to represent each distinct registration requirement
c
for a first party, including
r a
• Each legal establishment that is required to file tax documents.
O • Each tax regime, where the registration is used for all taxes within the regime.

Chapter 4 - Page 34
• Each tax within a tax regime that has a separate tax requirement, where the registration is
used for all jurisdictions where the tax is applicable.
• Each tax jurisdiction that has a separate tax requirement for a tax registration.
• Each tax for which the party is not registered, if the not registered tax registration status is
used as a tax condition in tax rules.
If a party has more than one tax registration under the same tax regime, then E-Business Tax
considers the tax registrations in the order: jurisdiction; tax; tax regime.
You optionally set up tax registrations for your customers and suppliers, as necessary, to
support specific tax regulations or reporting requirements.
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Chapter 4 - Page 35
Tax Registrations Setup
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Tax Registrations Setup
c l
Before you can set up tax registrations, you may need to complete one or more of these tasks.
Prerequisites
r a
• Set up tax regimes. O ly
• Set up parties.
l & On
a e
n
• Set up taxes.
t e r
• Set up party tax accounts.
U s
I n
• Set up bank accounts.
• Set up lookup codes for registration type, status, and reason.
l e
c
• Set up tax authorities.
r a
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Chapter 4 - Page 36
Practice - Create a First Party Tax Profile
Overview
In this practice, you will create a legal entity and a first party tax profile.
Note. You can also set up this tax information as part of the Legal Entity maintenance flow.
Assumptions
Tasks
Sign on
Password welcome
welcome
Note. Use the
m y
you created.
e
password you
created.
d
c a
Creating a Legal Entity
Field
e
US Sales and Use Tax A UK VAT
Responsibility
c l Legal Entity Manager Legal Entity Manager
1.
r a
Navigate to the Create Legal Entity page.
2. O ly
Create a legal entity based on the following information:
Field
l & On US Sales and Use Tax UK VAT
Territory
n a e United States United Kingdom
t e r
Legal Entity Identifier
U s
Legal Entity and Organization Name EBTAX US XX
USXX
EBTAX UK XX
UKXX
I n
EIN/TIN/Company Number 1234567XX GBGB1234567XX
c l e
Legal Address Location
Legal Address
Main XX
500 Oracle Parkway
Main XX
Oracle Parkway
r a Redwood Shores, CA
94065
Thames Valley Park,
Reading
O RG61RA

Chapter 4 - Page 37
Creating a First Party Tax Profile
Responsibility Tax Managers SSC US 01 Tax Managers Vision UK
3. Navigate to the Party Tax Profiles page.
4. Update the first party tax profile for your legal entity based on the following main
information:
Set for Self Assessment/Reverse Yes No
Charge
Rounding Level Header Header
Rounding Rule Nearest Nearest
Set Invoice Values as Tax Inclusive No No
5. Enter tax configuration options based on the following information:

Effective From Date
Instructor assigned
Instructor assigned
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Chapter 4 - Page 38
Solution – Create a First Party Tax Profile
Tasks
Sign on
created.
Creating a Legal Entity

Responsibility Legal Entity Manager Legal Entity Manager
1. Navigate to the Create Legal Entity page.
•
(N) Legal Entity Manager > Legal Entity Configurator
(B) Create Legal Entity

m y
2. Create a legal entity based on the following information:
d e
c a
UK VAT
Territory
e
United States
A
United Kingdom
Legal Entity
Organization Name
c l EBTAX US XX
EBTAX US XX
EBTAX UK XX
EBTAX UK XX
Legal Entity Identifier
r a USXX UKXX
EIN/TIN/Company Number
O ly 1234567XX GBGB1234567XX
l & On Note. Country Number

applies to UK.
n a e
3. Create a new legal address:
e
Field
t r U s US Sales and Use Tax UK VAT
Location I n
Create New Address Selected
Main XX
Selected
Main XX
c l e
Address 1 500 Oracle Parkway Oracle Parkway
O ra City
State/County
Redwood Shores
CA
Thames Valley Park
Reading

Chapter 4 - Page 39
Postal Code 94065 RG6 1RA
• (B) Apply (The system automatically creates a legal entity establishment when you
create a legal entity.)
• (H) Home
Creating a First Party Tax Profile

Responsibility Tax Managers SSC US 01 Tax Managers Vision UK
• (N) Parties > Party Tax Profiles
• Search for the First Party Legal Entity you created in the above step
Party Type First Party Legal Entity First Party Legal Entity
Party Name EBTAX US XX EBTAX UK XX
• (B) Go
m y
• (I) Update Tax Profile
d e
5. Update the first party tax profile for your legal entity based on the following main
information:
c a
Field
e
A UK VAT
Set for Self Assessment/Reverse
Charge
c l Yes No
Rounding Level
r a Header Header
Rounding Rule
O ly Nearest Nearest
l & On
Set Invoice Values as Tax Inclusive No No
• (T) Configuration Options

n a e
• (B) Add Another Row
t e r U s
6.
I n
Enter tax configuration options based on the following information:
c l e
Tax Regime Code
US SALES XX UK VAT XX
UK VAT
O ra Configuration for Taxes and Rules

Effective From
Instructor assigned
Instructor assigned

Chapter 4 - Page 40
• (B) Apply
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Chapter 4 - Page 41
Guided Demonstration - Create a Third Party Tax Profile
Sign on
Field Value
User Name XXUSER
Password welcome
Note. Use the password you
created.
Responsibility: Tax Managers SSC US 01
Note. This guided demo requires that a US Sales Tax model was created in Practice: Create a
Regime to Rate Tax Model.
• (N) Parties > Party Tax Profiles
Note. Discuss with the students that they can also enter tax profile information when they set up
their customers and suppliers.
2. Select a third party on the Party Tax Profiles page:

m y
Field Value
d e
Party Type
Party Name
Third Party
Computer Service and
ca
e
Consulting
A
• (B) Go
c l
• (I) Update Tax Profile
r a
3. O ly
Review the information entered on the Main Information and Default Controls on the
Update Party Tax Profile page.
l & On
a e
Note. This information is similar to what the students entered during the Create a First Party Tax
n
t e r s
Profile practice. During this guided demo we discuss setting up tax registrations and exemptions,
which are pages applicable to third party tax profiles.
U
I n
Note. Discuss using the Long Tip icons to obtain additional information about the fields.
4.
l e
Navigate to the Create Tax Registrations Detail page.
c
O ra
•
•
(T) Tax Registrations
(I) Create

Chapter 4 - Page 42
5. Enter tax registration options based on the following information:
Field Value
Tax US SALES XX
Tax Jurisdiction US SALES XX
Tax Registration Number 123456789
Tax Registration Status Registered
Set as Default Registration Yes
Source Implicit
Effective From Date Current Date
• (B) Apply
6. Navigate to the Create Tax Exemptions page.
• (T) Exemptions
• (I) Create
7. Enter tax exemption options based on the following information:

Field Value
m y
Certificate Number TAXEXEMPT00
d e
Exempt Reason Research
ca
Exempt Status
Tax Regime Code
e
Primary
US SALES XX A
Configuration Owner
c l SSC US 01
Effective From Date
r a Current Date
Exemption Rate Type
O ly Discount/Surcharge
l & On
Discount/Surcharge Percentage 3%
• (B) Apply
n a e
• (B) Apply
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Chapter 4 - Page 43
Summary
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Chapter 4 - Page 44
Configuration Owners and
Service Providers
Chapter 5
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Configuration Owners and Service Providers

Chapter 5 - Page 1
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Chapter 5 - Page 3
Objectives
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Chapter 5 - Page 4
Agenda
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Chapter 5 - Page 5
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• Party - The parties involved in the transaction.
O ly
• Product – The products transacted.
& On
l
n a e
locations, and the bill from and bill to locations.
• Process - The kind of transaction that takes place.
e r s
This module discusses how to manage the ownership of tax configuration data, or tax content,
t U
by the first parties of a transaction. First parties include both legal entities and operating units.
I n
You manage first party ownership of tax content by means of configuration options. The tax
e
regimes that you create in the tax definition phase identify the taxes and the set of regulations
l
that make up each tax requirement. Configuration options identify the relationships between
c
first parties and tax regimes to reflect the tax requirements of each party.
r a
The first party legal entities in your organization can share the same tax content by using the
O seeded global configuration owner. An individual legal entity or operating unit can also own

Chapter 5 - Page 6
and maintain its own tax content. You can also assign a tax service provider to a configuration
option to provide tax calculation services for transactions involving US Sales and Use tax.
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Chapter 5 - Page 7
E-Business Tax Home Page – Configuration Owner & Options
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Chapter 5 - Page 8
Tax Configuration Ownership
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Tax Configuration Ownership
c l
You can apply the tax content that you create to the entire organization using the global
r a
configuration owner, or you can let individual parties within the organization either create and
maintain their own tax content, or override parts of the shared tax content of the global
O ly
configuration owner to fulfill specific requirements. When a party overrides tax content, or
configuration ownership includes:

l & On
creates and maintains tax content, it becomes a configuration owner of this tax content. Tax
a e
• Legal entities and operating units (by independent party) owning their tax content.
n
owner.
t e r U s
• Legal entities and operating units using the shared tax content of the global configuration
I n
Note. Release 11i tax data in Payables, Receivables, and other applications migrates to E-
Business Tax as operating units containing their own tax content. For each operating unit, you
l e
can either continue to let the operating unit maintain its own tax content or set the operating
c
unit to use the tax configuration of its associated legal entity at transaction time. To set the
r a
operating unit to use the tax configuration of its associated legal entity, you enable the Use
Subscription of the Legal Entity option in the party tax profile of the operating unit. Note that
O this is an irreversible setting--once you associate the operating unit with its legal entity, you

Chapter 5 - Page 9
cannot update the operating unit tax profile or maintain separate tax content for this operating
unit.
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Chapter 5 - Page 10
Tax Configuration Options
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Tax Configuration Options
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Use configuration options to associate legal entities and operating units with their applicable
r a
tax regimes. The association between a party and a tax regime includes these definitions:
• Configuration for Taxes and Rules - The setup that the party uses for taxes, tax statuses,
O ly
tax rates, tax recovery rates, and tax rules.
exceptions.
l & On
• Configuration for Product Exceptions - The setup that the party uses for product tax
n a e
• Service Subscriptions - The external service providers that the party uses in place of
t e r U s
Oracle E-Business Tax to provide tax calculation services for US Sales and Use tax.
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Chapter 5 - Page 11
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E-Business Tax provides the global configuration owner to represent ownership of all tax
r a
setups at the company level. The configuration options that you set for each party/regime
combination are in relation to the global configuration owner. These options are:
O ly
• Common Configuration - The party uses the company tax setups for the applicable
l & On
regimes. All parties with a Common Configuration option share the same tax setup. When
setting up taxes, tax details, and configuration owner tax options, the global configuration
a e
owner represents any party with a Common Configuration. Authorized updates to the tax
n
t e r
setup affect all users of the Common Configuration.
s
• Common Configuration with Party Overrides - The party uses the company tax setups for
U
I n
the applicable regimes, but with the ability to override portions of the company tax setup
with tax setup specific to the party's requirements.
l e
• Party-Specific Configuration - A legal entity or operating unit party does not share the
c
company tax setup, but instead creates and maintains its own tax setup for the applicable
r a regimes. In this case, only this party can use the tax setup it creates.
O

Chapter 5 - Page 12
Configuration for Product Exceptions
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Configuration for Product Exceptions
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The configuration option setting for product exceptions determines whether the product tax
party: r a
exceptions defined for this tax regime are shared with other parties or remain specific to one
O ly
• If the configuration option for taxes and rules is Common Configuration or Party-Specific
for product exceptions.

l & On
Configuration, then E-Business Tax assigns the same setting to the configuration option
a e
• If the configuration option for taxes and rules is Common Configuration with Party
n
t e r s
Overrides, you can set the configuration option for product exceptions to Common
Configuration to let the party use the product tax exceptions of the global configuration
U
I n
owner; or Party-Specific Configuration to let the party set up its own product tax
exceptions that are not shared with any other party.
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Chapter 5 - Page 13
Legal Entity and Operating Unit Configuration Options
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Legal Entity and Operating Unit Configuration Options
You can define relationships between parties and tax requirements that reflect the specific
include: r a
taxation needs of your company and the way it is organized. These configuration options
O ly
• One legal entity owns and maintains its tax configuration.
& On
• Multiple operating units of one legal entity share the legal entity tax configuration.
l
n a e
• Multiple legal entities share the same tax configuration.
• Multiple legal entities share the same tax configuration, with individual legal entities able
t e r U s
to override the shared tax configuration for requirements specific to the legal entity,
including tax, tax status, tax rate, and tax rules and formulas.
I n
• One or more operating units of one legal entity own and maintain a separate tax
configuration.
l e
• A legal entity, or an operating unit that owns and maintains a separate tax configuration,
c
uses third party tax services for specific transaction events.
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(N) Tax Managers > Tax Configuration > Tax Regimes > (B) Continue
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(N) Tax Managers > Parties > Party Tax Profile > (I) Create/Update Tax Profile > (T)
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Use the Configuration Options page to set up configuration options to associate tax regimes
l
n a e
with the parties in your company that have a tax requirement under these tax regimes. You can
set up tax configuration options when you create a tax regime or when you create a party tax
t e r
same party/regime definitions.
U s
profile for a first party legal entity or operating unit. Both setup flows display and maintain the
I n
Configuration options only apply to tax regimes directly linked to taxes and not to tax regimes
that are used to group other tax regimes.
l e
Any authorized user can maintain the common tax setup associated with the global
c
configuration owner.
r a
O

Chapter 5 - Page 16
Configuration Options Setup
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Configuration Options Setup
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Before you can set up configuration options, you may need to complete one or more of these
tasks.
Prerequisites r a
O ly
• Set the eBTax: Read/Write Access to GCO Data profile option to identify users that can
& On
maintain tax configuration content for the Global Configuration Owner.
l
• Set up party tax profiles.
n a e
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Chapter 5 - Page 17
Agenda
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Chapter 5 - Page 18
Service Subscriptions
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Service Subscriptions
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(N) Tax Managers > Parties > Party Tax Profile > (I) Create/Update Tax Profile > (T)
Configuration Options > (I) Service Subscriptions
O ly
The setup for provider services is called a service subscription. A service subscription applies
entity/operating unit.
l & On
to the transactions of one configuration option setup for a combination of tax regime and legal
n a e
Use the Subscription Options page to assign an external service provider to a configuration
t e r U s
option. When assigned, E-Business Tax uses the external service provider tax services to
calculate US Sales and Use tax on Receivables transactions and the external service provider
I n
tax data for reporting.
E-Business Tax provides transparent integration between the external service provider and
l e
Oracle Receivables. Both E-Business Tax and the external service provider execute and
c
complete the tax services without any interruption to the application business flow.
r a
You can use the tax services of these external service providers:
O • Taxware, LP - A First Data Company

Chapter 5 - Page 19
• Vertex, Inc.
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Service Subscriptions Setup
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Service Subscriptions Setup
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Before you can set up service subscriptions, you may need to complete one or more of these
tasks.
Prerequisites r a
l & On
• Set up party tax profiles.
n a e
• Set up configuration options.
t e r U s
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Chapter 5 - Page 21
Guided Demonstration - Set Up a Configuration Option for a
Configuration Owner/Tax Regime
Sign on
Field Value
User Name XXUSER
Password welcome
created.
Setting Up Configuration Options
•
(N) Parties > Party Tax Profiles
Search for the First Party Legal Entity you created in the Practice: Create a First Party
m y
Tax Profile:
d e
Party Type
Field Value
ca
Party Name
e
EBTAX US XX A
• (B) Go
c l
• (I) Update Tax Profile r a
O ly
2.
& On
Navigate to the Configuration Options page.
l
• (T) Configuration Options
n a e
3.
Profile:
t e r U s
Review the tax configuration options you entered in the Practice: Create a First Party Tax
I nField Value
c l e
Tax Regime Code
US SALES XX
O
4.
ra Effective From Date Your assigned date
Navigate to the Subscription Options: Service Subscriptions page.

Chapter 5 - Page 22
• (T) Subscription Options
• (B) Add Another Row
5. Enter service subscription options based on the following information:

Field Value
Service Subscription Vertex Inc
Business Flow Order to Cash
Effective From Date Current Date
Note. Currently, E-Business Tax only provides the tax services of external service providers for
tax calculation of US sales and use tax on Receivables transactions.
• (B) Apply
• (B) Apply
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Chapter 5 - Page 24
Event Classes
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Event Classes
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(N) Tax Managers > Transactions > Event Class Settings > (I) Event Class Mappings
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(N) Tax Managers > Transactions > Event Class Settings > (I) Event Class Options
Use the Event Class Mapping page to review the mappings between event types and tax event
& On
types. You can use event class mapping information when setting up tax rules. You can set up
l
n a e
tax rules that refer to application event classes and/or tax event classes.
Use the Event Class Options page to review the default tax settings for each application event
t e
application and event class.
r U s
class. E-Business Tax provides predefined event class settings for each combination of
I n
Event class settings provide a means of standardizing the interaction between E-Business Tax
and other applications. E-Business Tax responds to specific application transaction events,
l e
such as a Payables invoice or a Receivables credit memo, according to the predefined settings
c
of each application event class. In this way, E-Business Tax can determine and calculate taxes
r a
without requiring access to each product. By default, the event class option settings of an event
class apply to all configuration owners.
O

Chapter 5 - Page 25
You can update event class options belonging to an application event class for a selected
configuration owner in this way: if the event class option is enabled, you can deselect the
option to exclude it from tax calculation. If an event class option is not enabled for a particular
application event class, you cannot enable this option.
Event Classes Applicable to E-Business Tax
These event classes are applicable to E-Business Tax:
• Payables
- Standard invoices
- Prepaid invoices
- Expense reports
• Purchasing
- Requisitions
- Purchase orders and agreements
- Releases
• Receivables
- Invoices
- Credit memos
- Debit memos
• Trade Management (source application)
- Tax Event for Claims Interfacing to AP
m y
- Tax Event for Claims Interfacing to AR
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Chapter 5 - Page 26
Configuration Owner Tax Options
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Configuration Owner Tax Options
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(N) Tax Managers > Defaults and Controls > Configuration Owner Tax Options > (B) Create
O ly
Use the Create Configuration Owner Tax Options page to set up configuration owner tax
options for a combination of configuration owner and application event class. You can update
owner.
l & On
some of the E-Business Tax predefined event class settings for a particular configuration
n a e
Configuration owner tax options let a configuration owner update default tax options on
t e r U s
transactions that belong to a specific application event class. At transaction time, E-Business
Tax uses the tax option settings of the configuration owner and application event class instead
I n
of the default settings.
These are the tax options you can update for each application and its event classes:
l e
Payables – Standard Invoice, Prepaid Invoice, Expense Report
c
• Rounding Precedence Hierarchy
r a
• Regime Determination Set
O • Perform Additional Applicability for Imported Documents

Chapter 5 - Page 27
• Offset Tax Basis
• Allow Tax Applicability
• Allow Entry of Manual Tax Lines
• Allow Recalculation for Manual Tax Lines
• Allow Override for Calculated Tax Lines
• Tax Tolerance
Purchasing - Requisition, Purchase Order and Agreement, Release
Receivables – Invoice, Credit Memo, Debit Memo
• Allow Exemptions
• Regime Determination Set
• Allow Entry of Manual Tax Lines
• Allow Recalculation for Manual Tax Lines
• Allow Override for Calculated Tax Lines
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Summary
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Chapter 5 - Page 29
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Fiscal Classifications
Chapter 6
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Chapter 6 - Page 1
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Chapter 6 - Page 3
Objectives
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Agenda
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Chapter 6 - Page 5
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• Party - The parties involved in the transaction. This can include first party legal entities;
O ly
ship from/ship to parties; bill from/bill to parties; tax registrations and registration statuses
l & On
of each party; type or classification of a party.
• Product – The products transacted. This includes the designation of physical goods or
a e
services, and in some cases the type or classification of the good or service.
n
t e r U s
locations, and the bill from and bill to locations. Other places—such as point of origin or
I n
point of acceptance—may also be factors, depending on the applicable tax regulations.
• Process - The kind of transaction that takes place. This can include: Procure to Pay
l e
transactions, such as purchases, prepayments, and requisitions; Order to Cash transactions,
c
such as sales, credit memos, and debit memos; the type of sale or purchase, for example,
r a retail goods, manufactured goods, intellectual property, resales.

Each of these factors can become determining factors in the creation of tax rules.
O
Chapter 6 - Page 6
This module discusses the setup and usage of fiscal classifications. You use fiscal
classifications in tax rules to classify the taxability factors of a transaction for use in tax
determination. This includes the parties and locations involved in your transactions, the
products you buy and sell, and the nature of your transactions.
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Chapter 6 - Page 7
E-Business Tax Home Page – Fiscal Classifications
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Chapter 6 - Page 8
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Fiscal classifications provide tax determination values for situations where the party, product,
r a
or transaction are factors in tax determination. You set up a fiscal classification type to identify
a category of fiscal classification that has a potential tax implication; you assign fiscal
O ly
classification types to tax regimes and taxation countries. You set up fiscal classification codes
l & On
under a fiscal classification type to provide additional granularity to a particular fiscal
classification category. When creating tax rules, you use fiscal classification types as
n a e
determining factors and fiscal classification codes as condition set values. See: Oracle E-
Business Tax: Part 2: Setting Up Tax Rules for information about determining factors and tax
conditions.
t e r U s
The use of fiscal classifications is optional, and depends upon your overall scheme for
I n
managing tax determination and tax calculation requirements. At transaction time E-Business
Tax determines, according to the tax rules you create, which fiscal classifications apply to the
l e
transaction line.
c
r a
You set up fiscal classifications under these general categories:
Party fiscal classifications - Classify your first parties—the various parts of your
O organization—and your third parties—your customers and suppliers and their locations—for
Chapter 6 - Page 9
use in tax determination. In some countries, the tax authority provides the specific party fiscal
classification to use.
For example, set up different party fiscal classifications for wholesale suppliers and retail
suppliers.
Product fiscal classifications - Classify the products and services that you buy and sell for use
in defining rules for tax determination. In some countries, the tax authority provides the
specific product fiscal classification to use.
For example, set up a product fiscal classification type in the United Kingdom for supplies that
are zero-rated for VAT, and then set up fiscal classification codes for specific supplies, such as
food, cleaning supplies, and printed matter.
Transaction fiscal classifications - Classify the nature of a transaction itself, and the details
that must accompany a transaction, according to its tax requirements.
For example, set up a transaction fiscal classification for retail sales, then set up fiscal
classification codes for sales of manufactured goods, sales of imported items, and sales
giveaways.
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Chapter 6 - Page 11
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(N) Tax Managers > Parties > Party Classification > (B) Create
O ly
Use the Create Party Fiscal Classification Type page to create party fiscal classification types
and codes. The party fiscal classifications that you create are used as tax determining factors in
l & On
tax rules. A party fiscal classification determines, for example, when taxes apply to a party,
how much tax applies, and what percentage of the tax is recoverable.
n a e
Set up party fiscal classifications for:
• First parties.
t e r
• Customers and customer sites.
U s
I n
• Suppliers and supplier sites.
c l e
Once you set up your party fiscal classifications types and codes, you can associate a party
fiscal classification with a party tax profile for each party that requires a party fiscal
r a
classifications for tax determination and/or tax reporting purposes. For example, you may want
to classify parties according to tax handling requirements, such as End Consumer, Distributor,
O Non-Profit Organization, Government Agency, and so on.
Chapter 6 - Page 12
Party Fiscal Classifications Setup
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Party Fiscal Classification Setup
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Before you can set up party fiscal classifications, you may need to complete one or more
prerequisite tasks.
Prerequisites r a
O ly
• Set up TCA class categories and class codes.
l & On
TCA Class Category
n a e
• Set up tax reporting types (optional).
e r s
You create a party fiscal classification by assigning a Trading Community Architecture (TCA)
t U
class category and its related class codes to party fiscal classification types and codes. Existing
I n
TCA class categories include, for example, SIC (Standard Industry Classification) and NAICS
e
(North American Industry Classification System). You can also create TCA class categories
l
and codes according to your requirements in order to classify parties and other business entities
c
into user-definable categories.
r a
If you plan to assign tax reporting types to party fiscal classifications, then set up the tax
O reporting types and codes that you need.
Chapter 6 - Page 13
Legal Party Fiscal Classifications
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Legal Party Fiscal Classifications
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(N) Tax Managers > Parties > Legal Classification Tax Usage
O ly
Some countries use a set of codes to identify legal classifications that have a tax requirement.
E-Business Tax provides seeded fiscal classification type codes for each set of country-specific
legal activity codes.
l & On
n a e
Use the Legal Classification Tax Usage page to use legal activity codes in tax determination
and tax reporting. You can assign these legal activity codes to the tax regimes within the
applicable country.
t e r U s
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Chapter 6 - Page 14
Guided Demonstration - Create a Party Fiscal Classification
Sign on
Field Value
User Name XXUSER
Password welcome
created.
1. Navigate to the Create Party Fiscal Classification Type page.
• (N) Parties > Party Classification
• (B) Create
2. Enter options based on the following information:

Field Value
Party Classification
Fiscal Classification Type Code
CUSTOMER_CATEGORY
EBTAX00
m y
Name EBTAX00
d e
ca
Tax Regime
e
US-Tax
Note. Discuss A
c l assigning the party
fiscal classification
r a type to all applicable

tax regimes. We are
O ly not using a tax
l & On regime that was

created in a previous
n a e practice, because it
Effective From
t e r U s
may impact the tax
calculation.
Current Date
Effective To
I n Current Date
c l e Note. Only make this

effective for one day
r a so it doesn’t impact
anyone else since we
O are using a seeded
Chapter 6 - Page 15
tax regime.
Note. The Fiscal Classifications Codes region displays the class codes defined for the TCA class
category that you enter. E-Business Tax automatically considers these as party fiscal
classification codes of the party fiscal classification type.
Note. You can use the View Existing Party Fiscal Classification Associations region to review
the TCA class categories already in use.
• (B) Apply
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Chapter 6 - Page 17
Product Fiscal Classifications
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Product Fiscal Classifications
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(N) Tax Managers > Products > Product Classifications > (B) Create
O ly
(N) Tax Managers > Products > Intended Use Classifications
Use the Product Fiscal Classification Type pages and Product Intended Use Fiscal
& On
Classification Type page to classify goods and services for tax purposes. You use product
l
n a e
fiscal classifications as tax determining factors in tax rules.
You can set up product fiscal classifications for:
e r s
• Inventory-based products and services – Product fiscal classifications that correspond to
Oracle Inventory items.
t U
I n
• Non-Inventory based products and services – An E-Business Tax generic product category
c l e
for non-Inventory based items.
• Product intended use fiscal classification - One classification for either Inventory-based or
r a non-Inventory based products and services to identify situations where the intended use of
the product is a factor in tax determination.
O
Chapter 6 - Page 18
You associate the product fiscal classification type codes that you create with the
corresponding tax regimes that require product fiscal classifications. These product fiscal
classification type codes become available to transactions belonging to the tax regime for use
in tax determination.
An Inventory-based product fiscal classification corresponds to the related setup for items
belonging to Oracle Inventory. The Inventory category set corresponds to the product fiscal
classification type, and the Inventory category segment values correspond to the product fiscal
classification codes. When an item belonging to the Inventory category set is entered on the
transaction line, the corresponding product fiscal classification code defaults to the transaction.
A non-Inventory based product fiscal classification lets you define product fiscal
classification codes for goods and services that are not associated with Oracle Inventory items.
The non-Inventory based product fiscal classification uses a generic product fiscal
classification type called PRODUCT_CATEGORY. You create product fiscal classification
codes under PRODUCT_CATEGORY according to categories that you define. You can create
both individual codes and a hierarchy of codes to represent lines of goods and services that
have a tax requirement. You can also optionally assign non-Inventory based product fiscal
classifications to a particular country.
You can use non-Inventory based product fiscal classifications to:
• Classify products for taxes if you do not use Oracle Inventory.
• Create country-specific product fiscal classifications.
• Create product fiscal classifications for items that are not a good.
• Create ad hoc product fiscal classifications without reference to an inventory item, for
m y
example, if you are making product purchases that are not a part of your standard business
processes.
d e
A product intended use fiscal classification is used to classify goods and services where the
ca
intended use of the product is a factor either in tax determination or the tax recovery rate. For
special services at a reduced charge.

e A
example, a company may purchase promotional items that it intends to give away free, or offer
c l
You can only set up product intended use fiscal classifications for either an Inventory category
r a
set or the non-Inventory based PRODUCT_CATEGORY, but not both. When you first set up
product intended use fiscal classifications, you decide which one becomes the basis for this
O ly
classification (this is an irreversible setting). If applicable, the data migration process may also
create either Inventory-based or non-Inventory based product intended use fiscal
classifications.
l & On
n a e
Note. Because non-Inventory based and product intended use fiscal classification codes are not
assigned to a particular Inventory item or tax regime, E-Business Tax makes these fiscal
t e r U s
classification codes available to all transactions (except for non-Inventory based product fiscal
classification codes assigned to a particular country).
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Chapter 6 - Page 19
Product Fiscal Classifications Setup
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Product Fiscal Classifications Setup
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Before you can set up product fiscal classifications, you may need to complete one or more
prerequisite tasks.
Prerequisites r a
O ly
• Set up Inventory items and categories for product fiscal classifications (for Oracle
Inventory).
l & On
n a e
• Set up tax reporting types (optional).
Oracle Inventory Setup
t e r U s
The Inventory setup tasks to model product fiscal classifications are:
I n
• Define Inventory Value Set
l e
• Define Inventory Item Category Structure
c
• Define Category Set
r a
• Define Inventory Categories
O • Associate Inventory Items to Category Sets
Chapter 6 - Page 20
You complete this setup task flow for each Inventory-based product fiscal classification type
that you plan to define.
See: Setting Up Oracle Inventory, Oracle E-Business Tax Implementation Guide and Defining
Categories, Oracle Inventory User’s Guide for more information.
If you plan to assign tax reporting types to product fiscal classifications, then set up the tax
reporting types and codes that you need.
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Chapter 6 - Page 21
Guided Demonstration - Create a Non-Inventory Based Product
Fiscal Classification
Sign on
Field Value
User Name XXUSER
Password welcome
created.
1. Navigate to the Create Party Fiscal Classification Type page.
• (N) Products > Product Classifications
2. Select a non-inventory based setup:

Field Value
Product Classification Source Oracle E-Business Tax
Note. You can select
Oracle Inventory to
m y
display fiscal
classification type d e
codes associated with
ca
e
Oracle Inventory.
A
• (B) Go
c l
•
a
(I) Update (on Product Category row)
r
3.
O ly
Discuss the options set up for the non-inventory based product fiscal classification:
Levels
Field
l & On Comments
Select the number of
n a e levels you want to
t e r U s
make available to the
product category
fiscal classification
I n type.
Enter an effective
c l e
Effective From
date range.
O
4.
ra
• (L) Expand All
Discuss the fiscal classification codes already defined:
Chapter 6 - Page 22
Field Comments
Fiscal Classification Code PRODUCT_CATEGORY
is the generic product
fiscal classification.
WINE CIGARETTE is an
individual code assigned
to the generic product
fiscal classification.
STATISTICAL_CODE
and FISCAL
CLASSIFICATION
CODE include a
hierarchy of codes to
represent lines of goods
and services that have a
tax requirement.
Country Name You can create country-
specific product fiscal
classifications.
• (I) Create Sub-Level (on STATISTICAL_CODE row level)
5. Create a subcomponent of the STATISTICAL_CODE fiscal classification code based on the

following information:
m y
Field Comments
d e
Fiscal Classification Code EBTAX00
ca
Name
Effective From
e
EBTAX00
Current Date A
Effective To
c l Current Date
r a Note. Only make this

effective for one day
O ly so it doesn’t impact
l & On anyone else since we

are using seeded
n a e data.
t e r U s
Note. Discuss entering tax reporting codes if tax reporting types are associated with fiscal
classifications. We are not entering any during the guided demo because there are no values
available.
I n
•
l e
(B) Apply
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r a • (B) Apply
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Chapter 6 - Page 24
Product Tax Exceptions
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Product Tax Exceptions
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(N) Tax Managers > Products > Tax Exceptions > (B) Create
O ly
Use the Create Tax Exceptions page to set up tax exceptions to apply special tax rates to
products. To set up tax exceptions, you must enable the Allow Tax Exceptions option at all
& On
applicable levels in the regime-to-rate flow, including tax regime, tax, tax status, and tax rate.
l
n a e
At transaction time, E-Business Tax determines whether the tax exception applies to the
transaction line for the product and, if so, uses the applicable exception rate. Only one product
t e r U s
tax exception can apply to a transaction line for a specific tax.
You can set up these product tax exceptions:
I n
• Discount - A reduction of the base tax rate.
c l e
• Surcharge - An increase to the base tax rate.
• Special Rate - A rate that replaces the base tax rate.
r a
You must assign a product tax exception to a combination of tax regime, configuration owner,
and tax. You can also optionally assign product tax exceptions to a tax status or tax rate
O belonging to the tax or to a tax jurisdiction.
Chapter 6 - Page 25
You can, for example, use product tax exceptions to determine the tax rate for a particular
product, instead of using tax rules. You can also define Inventory organization tax exceptions
for items, or you can define tax exceptions for Inventory-based or non-Inventory-based product
fiscal classifications. The product fiscal classification must have the same tax regime
assignment as the tax exception.
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Chapter 6 - Page 26
Product Tax Exceptions Setup
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Product Tax Exceptions Setup
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Before you can set up product tax exceptions, you may need to complete one or more
prerequisite tasks.
Prerequisites r a
• Set up taxes. O ly
& On
• Set up tax jurisdictions (for jurisdiction-specific exceptions).
l
n a e
• Set up Inventory organizations (for item exception types).
• Set up Inventory items (for item exception types).
e r s
• Set up product fiscal classification types (for product fiscal classification exception types).
t U
types).
I n
• Set up product fiscal classification codes (for product fiscal classification exception
l e
• Set up exception reason lookup codes (optional).
c
• Set up tax statuses (optional).
r a
• Set up tax rates (optional).
O
Chapter 6 - Page 27
Note. Setting up Inventory and product fiscal classifications are conditionally mandatory. For
example, you can create an exception for Inventory items, in which case product fiscal
classification types are not mandatory.
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Chapter 6 - Page 28
Guided Demonstration - Create a Product Tax Exception
Sign on
Field Value
User Name XXUSER
Password welcome
created.
1. Navigate to the Create Tax Exception page.
• (N) Products > Tax Exceptions
• (B) Create
2. Enter a product fiscal classification exception based on the following information:

Field Value
Tax Regime Code
Configuration Owner
US-SALES-TAX-101
Global Configuration Owner
m y
Tax STATE
d e
Exception Type Product Fiscal Classification
ca
Fiscal Classification Type Code
Fiscal Classification Code
e
PRODUCT_CATEGORY
FISCAL A
c l CLASSIFICATION CODE/
49119900
Exception Reason
r a Certificate On File
Effective From
O ly Current Date
Effective To
l & On Current Date

Exception Rate Type
n a e Discount/Surcharge
• (B) Apply
t e r
Discount/Surcharge Percentage
U s
3
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Chapter 6 - Page 29
Agenda
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Chapter 6 - Page 30
Transaction Fiscal Classifications
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Transaction Fiscal Classifications
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(N) Tax Managers > Transactions > Transaction Business Categories
O ly
(N) Tax Managers > Transactions > Transaction Fiscal Classifications > (B) Create
(N) Tax Managers > Transactions > Document Classifications
l & On
(N) Tax Managers > Transactions > User Defined Transaction Classifications
n a e
Use the Transaction Business Category Codes, Create Transaction Fiscal Classification Type,
Update Document Fiscal Classification, and Update User Defined Fiscal Classification pages
e r s
to create transaction fiscal classifications. E-Business Tax uses transaction fiscal classifications
t U
as tax determining factors in tax rules. You use transaction fiscal classifications when the tax
I n
authority requires you to classify the nature of the transaction itself for tax purposes in order to
determine the tax rate.
l e
You can set up these types of transaction fiscal classifications:
c
r a
• Transaction business categories.
• Transaction fiscal classification codes.
O • Document fiscal classifications.
Chapter 6 - Page 31
• User defined fiscal classifications.
Transaction Business Categories
E-Business Tax provides the following transaction business categories that you can use to
identify and classify your business transactions:
• Expense report.
• Purchase pre-payment transaction.
• Purchase transaction.
• Sales transaction.
• Sales transaction adjustment.
• Intercompany transaction.
Transaction Fiscal Classification Codes
You can create a hierarchy of transaction fiscal classification codes for use with a transaction
business category to identify specific transaction events, such as employee expense reports vs.
contractor expense reports or retail sales vs. product demonstrations, and, if applicable,
designate codes for specific countries.
Document Fiscal Classifications
Set up document fiscal classifications to classify transactions that require special
documentation to accompany the transaction. For example, international transactions often
require proof of export documentation to support the sale or transfer of goods; you can create a
document fiscal classification code to confirm receipt of export documents.
User Defined Fiscal Classifications
m y
Set up user defined transaction fiscal classification codes to classify any tax requirement that
you cannot define using existing fiscal classification types.
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Chapter 6 - Page 32
Summary
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Chapter 6 - Page 33
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Part 1: Setting Up Tax Rules
Chapter 7
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Chapter 7 - Page 1
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Chapter 7 - Page 3
Objectives
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Chapter 7 - Page 4
Agenda
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Chapter 7 - Page 5
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The Rule Engine tier comprises the set of tax rules that are used to determine and calculate tax
r a
on a transaction. You define tax rules for each combination of tax regime, tax and
configuration owner. You create tax rules by translating the tax regulations of a tax authority
O ly
into determining factors and tax conditions that the E-Business Tax tax rules engine uses to
l & On
evaluate the applicability of a tax on each transaction line. Tax rules determine: the
applicability of a tax; the place of supply and tax jurisdiction of the transaction; the tax
n a e
registration; the tax status and tax rate; the recovery rate (if applicable); and the taxable basis
and tax formula to use in calculation.
e r s
This module discusses basic principles concerning tax rules and tax calculations, and how to
t U
set up a tax rule using default values and the guided rule entry.
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Chapter 7 - Page 6
E-Business Tax Homepage – Tax Rules
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Chapter 7 - Page 7
Rule Engine
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Rule Engine
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Oracle E-Business applications pass the necessary information to E-Business Tax about the
r a
transaction regarding Party, Product, Place, and Process (4Ps). The E-Business Tax tax
determination process then uses the tax configuration setup and the details on the transaction to
determine:
O ly
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• Which taxes apply to the transaction.
• How to calculate the tax amount for each tax that applies to the transaction.
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Chapter 7 - Page 8
Rule Engine – Rule Types
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Rule Engine - Rule Types
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The E-Business Tax tax rules engine uses the Tax Determination process to identify the taxes
r a
that apply to a transaction and to calculate the tax.
The E-Business Tax tax determination process is organized into rule types. Each rule type
O ly
identifies a particular step in the determination and calculation of taxes on transactions. You
l & On
must either set up tax rules or provide a default value for each rule type in order for the tax
rules engine to determine and calculate taxes.
a e
The steps in the Tax Determination process are:
n
t e r U s
1 – Determine Applicable Tax Regimes and Candidate Taxes: This is a preliminary step
used by E-Business Tax to determine tax regimes and candidate taxes within each tax regime.
I n
This step identifies the first party of the transaction and the countries associated with the
transaction. For each country identified, the process selects the tax regimes that are associated
l e
with the first party and defined for the country as candidate tax regimes. The process then
c
selects the taxes defined for each candidate tax regime as candidate taxes.
r a
2 – Determine Place of Supply and Tax Jurisdiction: Determines the location where a
transaction is considered to have taken place for a specific tax, and the associated tax
O jurisdiction for each candidate tax. This step uses the Determine Place of Supply rule type.

Chapter 7 - Page 9
For example, in Europe the default place of supply of goods for VAT is often Ship From,
meaning the place of supply of a sale or purchase within a European country is the country
itself. In the US, the default place of supply for US Sales and Use is often Ship To, meaning
the state that is purchasing/receiving the goods.
3 – Determine Tax Applicability: Determines the tax applicability of each candidate tax
derived from the Determine Place of Supply and Tax Jurisdiction process, and eliminates taxes
that are found to be not applicable. This step uses the Determine Tax Applicability rule type.
4 – Determine Tax Registration: Determines the party whose tax registration is used for each
tax on the transaction, and, if available, derives the tax registration number. This step uses the
Determine Tax Registration rule type.
Generally, the registration default is Bill From Party, but there are cases, like Reverse Charge
or Self Assessment, where the default becomes Bill To Party for specific transactions.
5 – Determine Tax Status: Determines the tax status of each applicable tax on the transaction.
This step uses the Determine Tax Status rule type.
6 – Determine Tax Rate: Determines the tax rate for each tax and tax status derived from the
previous process. This step uses the Determine Tax Rate rule type.
If applicable, the tax rate is modified by any exception rate and/or tax exemption that applies.
The result of this process is a tax rate for each applicable tax. The rate or rates are applied to
the taxable basis in Step 8, Calculate Taxes.
7 – Determine Taxable Basis: Determines the taxable base amount or quantity upon which to
apply the tax rate for each applicable tax. This step uses the Determine Taxable Basis rule type.
The taxable basis is typically the transaction line amount. E-Business Tax provides the default
m y
taxable basis formula taxable basis = line amount. In some cases, the taxable basis either can
d
include another tax or is based on the tax amount of another tax. You can set up special taxable e
basis formulas to manage these requirements.
ca
8 – Calculate Taxes: Calculates the tax amount for each applicable tax on the transaction. This
step uses the Calculate Tax Amounts rule type.
e A
c l
The tax is typically determined by applying the tax rate to the line amount. E-Business Tax
provides the default tax calculation formula tax amount = taxable basis * tax rate. In some
r a
exceptional cases, the tax amount is altered by adding or subtracting another tax. You can set
up special tax calculation formulas to manage these requirements.
O ly
Tax Recovery Rate: Determines the recovery rate on Procure to Pay transactions to apply to
type).
l & On
each recovery type for each applicable tax on the transaction (Determine Recovery Rate rule
a e
Tax recovery is a separate process with its own set of steps, for taxes that allow for full or
n
information.
t e r U s
partial recovery of the tax amount. See: Oracle E-Business Tax: Tax Recovery for more
I n
Direct Tax Rate Determination: This is a special tax rule type that lets you specify the results
of tax applicability, tax status, and tax rate for a given tax. You use this rule type with migrated
c l e
tax data and the Release 11i tax model in E-Business Tax. See: Oracle E-Business Tax:
Appendix A: Managing Migrated Tax Data for more information.
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Chapter 7 - Page 10
Rule Engine – Tax Regimes
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Rule Engine – Tax Regimes
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The Tax Regime process determines tax regimes and candidate taxes. The result of the process
The activities include: r a

is a list of taxes that are eligible for consideration on the transaction.
O ly
• Determine the first party of the transaction.
& On
• Identify location types to derive candidate tax regimes.
l
• Identify tax regimes.
n a e
• Identify taxes using subscriber configuration option.
e
The components used include:
t r U s
• Party Tax Profile.
I n
• Regime Determination Set.
l e
• Configuration Options.
c
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Chapter 7 - Page 11
Rule Engine – Place of Supply / Taxation
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Rule Engine – Place of Supply / Taxation
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The Place of Supply / Taxation process identifies the applicable place of supply and associated
r a
tax jurisdiction for each candidate tax. The place of supply, or sites in the United States, is the
location type where the supply of goods or services is deemed to have taken place for a specific
tax.
O ly
l & On
If E-Business Tax cannot find a tax jurisdiction for the location that corresponds to the place of
supply location type, then the tax does not apply and it is removed as a candidate tax for the
transaction.
n a e
The activities include:
t
• Identify location type.
e r U s
I n
• Identify jurisdiction.
The components used and corresponding rule type include:
l e
• Tax Rule: Determine Place of Supply, or the default value for Place of Supply for the tax.
c
r a
• Tax Jurisdictions.
O

Chapter 7 - Page 12
Rule Engine – Applicability & Registration
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Rule Engine – Applicability & Registration
Applicability Process
c l
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The Applicability process determines the tax applicability of each candidate tax derived from
the Determine Place of Supply and Tax Jurisdiction process, and eliminates taxes that are
found to be not applicable. O ly
l & On
The process first attempts to derive the applicability of each candidate tax based on the rule
conditions of the Determine Tax Applicability rules for the tax. If no rule applies, the process
a e
uses the default value of Applicable or Not Applicable that was assigned to the rule type for the
n
t e r U s
tax. If the tax does not apply, it is removed from the list of candidate taxes.
The Applicability activities include:
I n
• Consider candidate taxes from the previous process.
• Eliminate taxes based on tax applicability rule for each tax.
l e
The component used in these activities and corresponding rule type include Tax Rule:
c
Determine Tax Applicability and the default value for applicability for the tax.
r a
Registration Process
O

Chapter 7 - Page 13
The Registration process determines the party whose tax registration is used for each tax on the
transaction, and, if available, derives the tax registration number.
During the Registration process, E-Business Tax also considers these details of the derived tax
registration for each tax:
• Tax inclusive handling.
• Self-assessment/reverse charge setting.
• Rounding rule.
The Registration activity includes determine the party type to use to derive the tax registration
for each applicable tax.
The component used in this activity and corresponding rule type includes:
• Tax Rule: Determine Tax Registration, or the default value for the tax.
• Party Tax Profile.
• Tax Registration.
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Chapter 7 - Page 14
Rule Engine – Status & Rates
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Rule Engine – Status & Rates
Status Process
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The Status process determines the tax status of each applicable tax on the transaction. E-
Business Tax attempts to derive the tax status using either tax rules belonging to the Determine
O ly
Tax Status rule type, or the default value assigned to this rule type.
The Status activities include:
l & On
n a e
• Consider tax statuses of applicable taxes.
• Consider tax status rules or use default tax status.
Rates Process
t e r U s
The Rates process determines the tax rate of the tax status derived from the previous process to
I n
use on the transaction line for each applicable tax. If applicable, the tax rate is then modified by
c l e
any exception rate and/or tax exemption that applies.
The Rates activities include:
r a
• Determine the tax rate code to use for the tax status, for each applicable tax.
• Determine the tax rate percentage or per-unit tax amount for a quantity based tax.
O • If a tax exception applies, update the tax rate for each applicable tax.

Chapter 7 - Page 15
• If a tax exemption applies, update the tax rate.
The components used in these activities and corresponding rule type include:
• Tax Rule: Determine Tax Rate, or the default value defined for the tax status derived in
the previous process.
• Tax Rates.
• Product Tax Exceptions.
• Customer Tax Exemptions.
Defaulting Logic
If defined, E-Business Tax uses the tax rate assigned to the tax jurisdiction for the applicable
tax and tax status; otherwise, E-Business Tax uses the default tax rate.
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Chapter 7 - Page 16
Rule Engine – Taxable Basis
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Rule Engine – Taxable Basis
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The Taxable Basis process determines the taxable base amount or quantity for each tax. This is
r a
typically the transaction line amount. In some cases, the taxable basis either can include
another tax or is based on the tax amount of another tax. E-Business lets you define taxable
O ly
basis formulas to manage these requirements.
l & On
The result of this process is the taxable basis on which the tax rate for each tax is applied. If the
process cannot find a taxable basis formula for an applicable tax, then E-Business raises an
error.
n a e
t e r U s
• Identify the taxable basis formula for each applicable tax.
I n
• Determine the taxable basis and compounding details based on the taxable basis formula.
• Consider the Tax Inclusive settings of the applicable taxes.
l e
c
r a
• Tax Rule: Determine Taxable Basis, or the default value for the tax.
• Taxable Basis formula.
O • Tax Inclusive settings at the tax rate level.

Chapter 7 - Page 17
Rule Engine – Tax Calculation
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Rule Engine – Tax Calculation
c l
The Tax Calculation process calculates the tax amount on the transaction. In most cases, the
r a
tax amount is computed by applying the derived tax rate to the derived taxable basis. In some
exceptional cases, the tax amount is altered by adding or subtracting another tax. E-Business
O ly
lets you define tax calculation formulas to manage these requirements.
l & On
The result of this process is the tax amount for each tax. If the process cannot find a tax
calculation formula for an applicable tax, then E-Business raises an error.
n a e
t e r U s
• Identify the tax calculation formula.
• Calculate taxes using the tax calculation formula.
I n
• Perform applicable tax rounding.
c l e
• Tax Rule: Calculate Tax Amounts.
r a
• Calculate Tax formula, if applicable.
• Tax Rounding Rule from registration, account site, party tax profile, or tax.
O • Configuration Owner Tax Options.

Chapter 7 - Page 18
Rule Engine – Recovery Rate
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Rule Engine – Recovery Rate
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A recoverable tax is a tax that allows full or partial recovery of taxes paid on purchases, either
r a
as a recoverable payment or as an offset against taxes owed. The Recovery Rate process is an
optional process that determines the recovery rate to use on Procure to Pay transactions, when
O ly
the tax allows for full or partial recovery of the tax amount.
l & On
• Allocate tax amount per item distributions.
• Determine recovery types.
n a e
• Determine recovery rates.
t e r U s
• Determine the recoverable amounts.
I n
• Determine the non-recoverable amount.
process.
c l e
See: Oracle E-Business Tax: Tax Recovery for complete information about the tax recovery
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Chapter 7 - Page 19
Agenda
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Chapter 7 - Page 20
Tax Rule Defaults
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Tax Rule Defaults
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You can set a default value for each rule type. E-Business Tax uses the default value if no rule
r a
belonging to the rule type provides a value that applies to the transaction.
For certain tax regimes, you may be able to use default values exclusively, without the need to
O ly
set up tax rules. As a general rule of thumb, if you find in setting up tax rules that the tax
l & On
condition results and rule results always equal the default values, then you do not need a tax
rule. You only need to define a tax rule for a result that is different from the default value.
Default Values for Rule Types
n a e
• Bill From
t e r U s
• Bill To
I n
c l e
• Point of Acceptance (Receivables transactions only)
• Point of Origin (Receivables transactions only)
r a
• Point of Payment
• Ship From
O • Ship To

Chapter 7 - Page 21
• Use Bill To as Ship To, if Ship To is not found
In Europe, the default for place of supply of goods is usually Ship From. In the United States,
the default for place of supply of goods is usually Ship To.
Determine Tax Applicability
• Applicable
• Not Applicable
• Bill From Party
• Bill To Party
• Ship From Party
• Ship To Party
• Use Bill To, if Ship To is not available
The default is usually Bill From Party, but there are cases, such as reverse charge and self-
assessment, where the default is Bill To Party for specific transactions.
Determine Tax Status – You specify the default value when you set up the tax status. This
default can be overridden.
Determine Tax Rate – You specify the default value when you set up the tax rate. This default
can be overridden.
Determine Taxable Basis – The seeded formula STANDARD_TB (Taxable Basis = Line
Amount).
Calculate Tax Amounts – The seeded formula STANDARD_TC (Tax Amount = (Taxable
m y
Basis) * (Tax Rate)).
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Chapter 7 - Page 22
Practice - Set Up Tax Rule Defaults
Overview
In this practice, you will create defaults for each tax rule type.
Assumptions
Tasks
Sign on
created.
Note. Use the
y
password you created.
m
e
Tax Managers Vision
UK
d
c a
1. Navigate to the Tax Rules page.
e A
2.
c l
Access the rule types for your tax regime and tax created in the Practice: Create a Regime to
Rate Tax Model.
r a
3.
O ly
Enter tax rule defaults based on the following information:
Field
l & On US Sales and Use Tax
Ship To
UK VAT
Ship From
n a e
Determine Tax Applicability Applicable Applicable
t e r
U s Bill From Party Bill From Party
I n
Determine Tax Status US SALES XX
STANDARD (the tax
UK VAT XX
STANDARD (the tax
c l e status you created in

Practice 1)
status you created in
Practice 1)
r a Determine Tax Rate US SALES XX

STANDARD (the tax rate
UK VAT XX
STANDARD (the tax
O you created in Practice – rate you created in

Chapter 7 - Page 23
Create a Regime to Rate Practice – Create a
Tax Model) Regime to Rate Tax
Model)
Determine Taxable Basis STANDARD_TB STANDARD_TB
Calculate Tax Amounts STANDARD_TC STANDARD_TC
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Chapter 7 - Page 24
Solution – Set Up Tax Rule Defaults
Tasks
Sign on
Note. Use the password you Note. Use the
created. password you created.
UK
1. Navigate to the Tax Rules page:
• (N) Tax Configuration > Tax Rules
2. Access the rule types for your tax regime and tax created in the Practice: Create a Regime to
Rate Tax Model.
m y
Field
Configuration Owner
d e
UK VAT
Owner
c a
Tax Regime Code
Tax
e
US SALES XX
US SALES XX A
UK VAT XX
UK VAT XX
c l
• (B) Go
r a
3. Enter tax rule defaults.
O ly
•
Field
l & On
Determine Place of Supply > (I) Set Default
Rule Type Default
n a e Ship To Ship From
• (B) Apply
t e r U s
• I n
Determine Tax Applicability > (I) Set Default
c l e Field US Sales and Use Tax UK VAT
r a Rule Type Default Applicable Applicable
O • (B) Apply

Chapter 7 - Page 25
• Determine Tax Registration > (I) Set Default
Rule Type Default Bill From Party Bill From Party
• (B) Apply
• Determine Tax Status > (I) Set Default

Rule Type Default US SALES XX UK VAT XX
STANDARD (default) STANDARD (default)
Note. This already appears Note. This already
as the default because you appears as the default
selected the Set as Default because you selected
Tax Status option in the tax the Set as Default Tax
status setup. Status option in the tax
status setup.
• (B) Apply
• Determine Tax Rate > (I) Set Default
Rule Type Default

US SALES XX
UK VAT
UK VAT XX
m y
STANDARD (default)
Note. This already appears
d e
STANDARD (default)
Note. This already
as the default because you
selected the Set as Default
c a
appears as the default
because you selected
e
Rate option in the tax rate
setup. A
the Set as Default Rate
option in the tax rate
c l setup.
• (B) Apply
r a
•
O ly
Determine Taxable Basis > (I) Set Default
Field
l & On US Sales and Use Tax UK VAT

Rule Type Default
n a e STANDARD_TB STANDARD_TB
• (B) Apply
t e r U s
•
I n
Calculate Tax Amounts > (I) Set Default
c l e
Rule Type Default STANDARD_TC STANDARD_TC
r a • (B) Apply
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Chapter 7 - Page 26
Agenda
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Chapter 7 - Page 27
Make Tax Available on Transactions
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Make Tax Available on Transactions
c l
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(N) Tax Managers > Tax Configuration > Taxes > (I) Update
O ly
Use the Update Tax page to make each tax available on transactions. You must enable the
Make Tax Available for Transactions option before E-Business Tax can use this tax setup to
l & On
calculate taxes on transactions. When you enable the Make Tax Available for Transactions
option, E-Business Tax runs a series of checks to ensure that all of the definitions related to the
a e
tax have been defined. E-Business Tax displays an error message if you have not set up the
n
definitions properly.
t e r U s
Prior to making a tax available on transactions, you must:
Supply. I n
• Define either a default place of supply or a tax rule for the rule type Determine Place of
l e
• Define either a default tax registration or a tax rule for the rule type Determine Tax
c
Registration.
r a
• Define either a default tax status and default tax rate, or tax rules for the rule types
O Determine Tax Status and Determine Tax Rate, or the rule type Direct Tax Rate
Determination.

Chapter 7 - Page 28
• Define either a default tax formula or a tax rule for the rule type Determine Taxable Basis.
• Define either a default tax formula or a tax rule for the rule type Calculate Tax Amounts.
• Define a primary tax recovery rate, if you set the allow recovery option for the tax.
• Define at least one tax jurisdiction for the tax.
• Define an exchange rate type, if the tax is used in cross-border transactions.
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Chapter 7 - Page 29
Practice - Make Tax Available for Transactions
Overview
In this practice, you will make the tax you created in Practice: Create a Regime to Rate Tax
Model available for transactions.
Assumptions
Tasks
Sign on
Password welcome
created.
welcome
Note. Use the
m y
d e
Tax Managers Vision
UK
c a
e A
1. Navigate to the Taxes page.
c l
2.
a
Access your tax created in the Practice: Create a Regime to Rate Tax Model.
r
3.
O ly
Make the tax available for transactions and effective for only one day.
l & On
n a e
t e r U s
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Chapter 7 - Page 30
Solution – Make Tax Available for Transactions
Tasks
Sign on
UK
m y
Country Name United States
e
United Kingdom
d
Tax Regime Code
Tax
US SALES XX
US SALES XX
c a
UK VAT XX
UK VAT XX
• (B) Go
e A
c l
• (I) Update
r a
3.
Field O ly
Make the tax available for transactions and effective for only one day:
l & On
Make Tax Available for Transactions Select Select
Effective To
n a e Instructor assigned Instructor assigned
t e r U s Note. This date should

equal the Effective
Note. This date should
equal the Effective
I n From date. From date.
•
l e
(B) Apply (Displays warning – Validation Error: This tax does not have an exchange
c
rate type. Are you sure you want to enable this tax?)
r a • (B) Yes
O

Chapter 7 - Page 31
Agenda
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Chapter 7 - Page 32
m y
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c l
Responsibility: E-Business Oracle Tax Simulator
r
(N) Oracle Tax Simulator > Tax Simulator
a
O ly
Use the Oracle Tax Simulator to enter transactions in order to simulate the tax determination
process without creating live data.
& On
With the Oracle Tax Simulator, you can:
l
scenarios.
n a e
• Enter Payables and Receivables transactions to simulate tax calculation based on various
e r s
• View the tax rules that were applied to a tax calculation and the processed result for each
rule type.
t U
I n
• Simulate the characteristics of the Payables, Purchasing, and Receivables workbenches
c l e
and create the tax line for each type of operation.
• View the summarized tax lines for each transaction and the tax lines generated for each
r a transaction line.
• Use the associated tax windows to view and/or override tax lines.
O The Oracle Tax Simulator provides these verifications:

Chapter 7 - Page 33
• How the tax rules that you have defined for one or more taxes work in conjunction with
the defaults you have set for them.
• Whether a tax rule that you expected to have a successful evaluation for a given set of
transaction conditions achieved the desired result.
• How the options that you have set at various levels are reflected in the results of tax
determination processing. If a certain transaction does not processes taxes as you
predicted, then you can use the simulated result to troubleshoot the cause.
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Chapter 7 - Page 34
Troubleshooting the Tax Configuration
m y
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Troubleshooting the Tax Configuration
Responsibility: Oracle Tax Simulator
c l
r
(N) Oracle Tax Simulator > Tax Simulator
a
O ly
If a certain transaction does not process taxes as you predicted, then you can use the simulated
result to troubleshoot the cause. For example:
& On
• You defined product tax exceptions, but they were not used on a transaction as expected.
l
n
applicable tax rate record.a e
You then discover that the Allow Tax Exceptions option was not enabled on the
t e r U s
• Your supplier record has the option enabled to use offset taxes, but the offset taxes do not
appear. You then discover that the tax rate record does not have an offset tax rate
Tax Simulator Tools I n

associated with it.
l e
Use the Tax Simulator tools to analyze the tax calculations for your transaction:
c
r a
• View Tax Log - Use the View Tax Log option on the Tools menu to generate a log file of
transaction activity. The log file provides details of all processing done on a transaction,
O including a list of tax rules that were not evaluated successfully.

Chapter 7 - Page 35
• Detail Tax Lines window - Use the Detail Tax Lines window to view the calculated tax
lines for the transaction. The window displays, for each transaction line, the applicable tax
with the corresponding tax configuration details, including tax regime, tax, tax
jurisdiction, tax status, tax rate code, tax rate, and tax amount.
• Rules window - Use the Rules window to view the tax rules that were applied to each tax
line for each tax calculation process. For each rule type, you can view the processed result
and verify whether the result was determined by a tax rule or the default value. If a tax
rule was applied, you can also determine the associated tax rule and tax condition set.
• Summary Tax Lines window - Use the Summary Tax Lines window to view the summary
tax lines for your Payables transactions. For each applicable tax, you can view the total tax
amount across all transaction lines, with the corresponding tax configuration details,
including tax regime, tax, tax jurisdiction, tax status, tax rate code, and tax rate.
• Tax Distributions window - Use the Tax Distributions window to view the resulting
distributions information and any associated recovery details for your Payables
transactions.
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Chapter 7 - Page 36
Practice - Review Tax Configuration Results Using the Tax
Simulator
Overview
In this practice, you will review your tax configuration results applied to a Payables invoice
transaction using the Oracle Tax Simulator.
Assumptions
Tasks
Sign on
m y
created.
d e
Note. Use the
Responsibility Oracle Tax Simulator
a
c
Entering a Payables Invoice Using the Tax Simulator
e A
1.
l
Navigate to the Oracle Tax Simulator window.
c
2.
r a
Enter Payables main information based on the following:
Field
O ly US Sales and Use Tax UK VAT
Application
Document Event
l & On Payables
Standard Invoices
Payables
Standard Invoices
Legal Entity
n a e SSC US 01 Vision Industries
Document Type
t e r U s Standard Created Standard Created

Operating Unit
Document Date I n SSC US 01
Instructor assigned
Vision Industries
Instructor assigned
c l e Note. This date should

be equal to the effective
be equal to the
r a date of your tax. effective date of your

tax.
O

Chapter 7 - Page 37
Document Number TAX TEST XX TAX TEST XX
Document Currency USD GBP
3. Enter party information based on the following:

Ship From Party Advantage Corp Advantage Corp
Bill From Party Advantage Corp Advantage Corp
Ship To Party SSC US 01 - 002 SSC US OU 01 Vision Industries HR-
- 002 London, UK
Bill To Party SSC US 01 - 002 SSC US OU 01 Vision Industries HR-
- 002 London, UK
4. Enter sites information based on the following:

Ship From Party Site US CHECK Advantage Corp LONDON Advantage
Corp
Note. Select Party
Site 174629, which is
the second
occurrence in the
LOV.
m y
Bill From Party Site US CHECK Advantage Corp
e
LONDON Advantage
Corp
d
c a
Note. Select Party
e ASite 174629, which is

the second
c l occurrence in the
LOV.
Ship From Location
r a 8475 Elk Grove Road New York
, NY
23 Chamomile Street ,
O ly Note. You need to do

a search on
l & On %Chamomile% to
select the location.
n a e First search on % to
t e r U s obtain all values, and

then search on
I n %Chamomile%. You
may not get any
c l e results if you first

search on
r a %Chamomile%.
Select the first
O occurrence in the

Chapter 7 - Page 38
LOV.
Bill From Location PO Box 680978 New York , NY 23 Chamomile Street ,
Note. You need to do
a search on
%Chamomile% to
select the location.
First search on % to
obtain all values, and
then search on
%Chamomile%. You
may not get any
results if you first
search on
%Chamomile%.
Select the first
occurrence in the
LOV.
Ship To Location SSC US OU 01 – 002 31 Birmingham Hurst
Madison Avenue New York New Street Birmingham
York, NY WTM,
Bill To Location SSC US OU 01 – 002 31 Birmingham Hurst
Madison Avenue New York New
York, NY
Street Birmingham
WTM,
m y
5. Enter line information based on the following:
d e
c a
UK VAT
Line Description
Product Type
e
Test XX
Goods A
Test XX
Goods
Quantity
c l 1 1
UOM
r a Each Each
Unit Price
O ly 200.00 200.00
Transaction Business Category
GL Date
l & On Purchase Transaction
Instructor assigned
Purchase Transaction
Instructor assigned
n a e Note. This date should be Note. This date
t e r U s equal to the effective date of

your tax.
should be equal to the
effective date of your
Tax Inclusive I n None

tax.
None
6.
c l e
View the tax line details.
r
7. a View the tax rules.
O

Chapter 7 - Page 39
Solution – Review Tax Configuration Results Using the Tax
Simulator
Tasks
Sign on
Responsibility Oracle Tax Simulator Oracle Tax Simulator
Entering a Payables Invoice Using the Tax Simulator
1. Navigate to the Oracle Tax Simulator window.
• (N) Oracle Tax Simulator > Tax Simulator
• (T) Main
m y
2. Enter Payables main information based on the following:
d e
UK VAT
Application Payables
c
Payablesa
Document Event
e
Standard Invoices
A
Standard Invoices
Legal Entity
Document Type
c l SSC US 01
Standard Created
Vision Industries
Standard Created
Operating Unit
r a SSC US 01 Vision Industries
Document Date
O ly Instructor assigned Instructor assigned
l & On Note. This date should

be equal to the effective
be equal to the
n a e date of your tax. effective date of your
Document Number
t e r U s TAX TEST XX
tax.
TAX TEST XX
Document Currency
I n USD GBP
•
l e
(T) Party
c
3.
r a Enter party information based on the following:
O

Chapter 7 - Page 40
Ship From Party Advantage Corp Advantage Corp
Bill From Party Advantage Corp Advantage Corp
Ship To Party SSC US 01 - 002 SSC US OU 01 Vision Industries HR-
- 002 London, UK
Bill To Party SSC US 01 - 002 SSC US OU 01 Vision Industries HR-
- 002 London, UK
• (T) Sites
4. Enter sites information based on the following:

Ship From Party Site US CHECK Advantage Corp LONDON Advantage
Corp
Note. Select Party
the second
occurrence in the
LOV.
Bill From Party Site US CHECK Advantage Corp LONDON Advantage
Corp
Note. Select Party
m y
the second
d e
occurrence in the
c
LOV. a
Ship From Location 8475 Elk Grove Road New York
, NY
e A
23 Chamomile Street ,
Note. You need to do
c l a search on
%Chamomile% to
r a select the location.
O ly First search on % to
obtain all values, and
l & On then search on

%Chamomile%. You
n a e may not get any
t e r U s results if you first

search on
%Chamomile%.
I n Select the first
c l e occurrence in the
LOV.
r a Bill From Location PO Box 680978 New York , NY 23 Chamomile Street ,

Note. You need to do a
O search on

Chapter 7 - Page 41
%Chamomile% to
select the location. First
search on % to obtain
all values, and then
search on
%Chamomile%. You
may not get any results
if you first search on
%Chamomile%. Select
the first occurrence in
the LOV.
Ship To Location SSC US OU 01 – 002 31 Birmingham Hurst
York, NY WTM,
Bill To Location SSC US OU 01 – 002 31 Birmingham Hurst
York, NY WTM,
• (T) Main (Lines region of the Tax Simulator window)
5. Enter line information based on the following:

Line Description Test XX Test XX
m y
Product Type
Quantity
Goods
1
Goods
1
d e
UOM Each
c
Each a
Unit Price
e
200.00
A
200.00
Transaction Business Category
GL Date
c l Purchase Transaction
Instructor assigned
Purchase Transaction
Instructor assigned
r a Note. This date should be Note. This date
O ly equal to the effective date of

your tax.
should be equal to the
effective date of your
l & On tax.
Tax Inclusive
n a e None None
6.
r
View the tax line details.
t e U s
• (B) Tax Lines
I n
7.
e
View the tax rules.
c l
r a • Select the line with your tax regime code.
O • (B) Tax Rules

Chapter 7 - Page 42
Note. Because you are working in an environment with seeded data and shared data, you may see
other tax applied to your transaction.
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Chapter 7 - Page 43
Agenda
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Chapter 7 - Page 44
Tax Rules Entry
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Tax Rules Entry
c l
E-Business Tax provides two entry flows for setting up your tax rules:
r a
• Guided Tax Rule Entry - The guided tax rule entry provides a five-step flow that lets you
build determining factors and tax conditions as you create the tax rule. Setting up tax rules
O ly
using the Guided Tax Rule Entry is discussed in this module.
l & On
• Expert Tax Rule Entry - The expert tax rule entry provides a concise, three-step entry flow
that makes use of determining factor sets and tax condition sets that you have previously
a e
defined. Setting up tax rules using the Expert Tax Rule Entry is discussed in Oracle E-
n
t e r U s
Business Tax: Part 3: Setting Up Tax Rules.
I n
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Chapter 7 - Page 45
Tax Rules – Guided Rule Entry
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c l
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(N) Tax Managers > Tax Rules > (I) Guided Rule Entry
O ly
Use the following page flow to set up tax rules using the guided rule entry:
• Tax Rules
l & On
• Create Tax Rule: General Information
a e
• Create Tax Rule: Determining Factors and Conditions
n
t e r
• Create Tax Rule: Condition Results
• Create Tax Rule: Rule Order
U s
n
• Create Tax Rule: Rule Templates
I
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Chapter 7 - Page 46
m y
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ca
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A tax rule is defined by:
c l
r a
Ownership information - Identifies the tax rule configuration owner. If the configuration
owner is a legal entity or operating unit, then the rule only applies to the transactions of this
O ly
legal entity or operating unit. If the configuration owner is the Global Configuration Owner,
l & On
then the rule applies to the transactions of all legal entities and operating units with a
configuration option setting for the tax regime of either Common Configuration or Common
a e
Configuration with Party Overrides.
n
t e r U s
Context information - Identifies the tax regime, tax, and rule type for which a rule is defined.
Rule order - Identifies the order in which a rule is evaluated. You cannot repeat a rule order
I n
for the same tax regime, tax, and rule type for the same configuration owner. If the
configuration option setting is Common Configuration with Party Overrides, you cannot repeat
l e
a rule order for the same tax regime, tax, and rule type for either the same configuration owner
c
or the Global Configuration Owner.
r a
Additional context information - Applies further restrictions to a rule:
• Transactions belonging to a specific application event class.
O • Transactions belonging to a specific application tax event class.

Chapter 7 - Page 47
• Transactions belonging to a specific location.
Determining factor set - Identifies the factors to consider when evaluating the tax rule.
Tax condition set - Identifies the conditions (from one or more of the determining factors
belonging to the determining factor set) to satisfy in order evaluate a tax condition set
successfully.
Result - The value that results when the tax conditions are satisfied. For the direct tax rate
determination rule type, multiple results may apply to the successful evaluation of a tax
condition set.
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Chapter 7 - Page 48
Tax Rules – Guided Rule Entry Setup
m y
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Tax Rules – Guided Rule Entry Setup
c l
Before you can set up a tax rule, you may need to complete one or more of these tasks.
Prerequisites
r a
• Set up taxes. O ly
• Set up tax statuses.
l & On
a e
• Set up tax rates and enable the Allow Tax Rate Rules option.
n
t e r
• Set up tax jurisdictions (to optionally use with the Determine Place of Supply rule).
s
• Set up TCA geography hierarchy structures (if required by the tax rule).
U
I n
• Set up tax zones (if required by the tax rule).
• Set up fiscal classifications (if required by the tax rule).
l e
• Set up taxable basis tax formulas (for the rule type Determine Taxable Basis, if you need a
c
formula other than the default formula STANDARD_TB).
r a
• Set up tax calculation tax formulas (for the rule type Calculate Tax Amounts, if you need a
O formula other than the default formula STANDARD_TC).

Chapter 7 - Page 49
• Set up tax recovery rates (for the rule type Determine Recovery Rate).
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Chapter 7 - Page 50
Guided Demonstration - Set Up Determine Tax Applicability Rule
Using the Guided Rule Entry
Sign on
Field Value
User Name XXUSER
Password welcome
created.
2. Access the rule type for your tax regime and tax created in the Practice: Create a Regime to
Rate Tax Model.
m y
Field
Configuration Owner
Value
d e
ca
Tax
e
US SALES XX
A
• (B) Go
c l
•
r a
(H) Expand All (The system displays 9 rule types.)
• O ly
(B) Create Guided Rule Entry (on the Determine Tax Applicability row level)
l & On
Note. You are setting up a tax rule for a specific product. If the product is used in a transaction,
a e
tax is not applicable for the effective period.
n
3.
e r
Enter general information:
t U s
Rule Code
I n Field
US SALES RULE INS
Value
l
Name
c e US SALES RULE INS
r a Effective From
Effective To
Current Date
Current Date
O Note. Make the rule

Chapter 7 - Page 51
effective for one day and
outside the effective date
for the tax. It won’t affect
the tax calculation on the
transaction (the system
will use the default for this
rule type).
This rule applies to all transactions. Yes
• (B) Next
• (T) Product
• (I) Non-Inventory based Product Classification
4. Enter determining factors and conditions for the non-Inventory based Product Classification:
Field Value
Classification Hierarchy Level Level 2
Operator Equal To
Value Fiscal Classification
Code/00000000
m y
• (B) Next
d e
5. Enter the condition results for Applicability:
Field Value
ca
Applicable Tax
e
Not Applicable A
• (B) Next
c l
6. Enter rule order options: r a
Field O ly Value
Enable
l & On Select
Rule Order
n a e 1
• (B) Next
t e r U s
7.
I n
Enter rule set options:
c l e Field
Determining Factor Set US SALES DF INS
Value
O ra Name
Condition Set
US SALES DF INS
US SALES CS INS

Chapter 7 - Page 52
Name US SALES CS INS
• (B) Finish
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Chapter 7 - Page 53
Summary
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Chapter 7 - Page 54
Chapter 8
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Chapter 8 - Page 1
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Chapter 8 - Page 3
Objectives
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Chapter 8 - Page 4
Agenda
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Chapter 8 - Page 5
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O ly
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n a e
e r s
This module discusses the major components of a tax rule—regime determination set, tax
t U
determining factor set, tax formula, tax condition set—and how to use these components to
build tax rules.
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Chapter 8 - Page 6
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Chapter 8 - Page 7
Determining Factors
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Determining Factors
c l
Determining factors are the key building blocks of your tax rules. They are the variables that
factors fall into four groups, namely: r a

are passed at transaction time or derived from information on the transaction. Determining
• Party O ly
• Product
l & On
• Place
• Process
n a e
e r s
A determining factor is an attribute that contributes to the outcome of a tax determination
t U
process, such as a geographical location (place) or tax registration status (party). Determining
I n
factors can be used in tax rules, taxable basis formula, and tax regime determination.
c l e
Determining Factor Classes
Tax determining factors are categorized into logical groupings called determining factor
r a
classes, such as Accounting or Geography. The grouping of determining factors into
determining factor classes is done to simplify searches, by grouping similar determining factors
O together. A determining factor is automatically created under the appropriate determining

Chapter 8 - Page 8
factor class whenever you create a new element, such as a new fiscal product classification
code.
Class Qualifiers
You use a class qualifier with a determining factor class when it is possible to associate a
determining factor class with more than one value on the transaction. For example, for the
determining factor class Geography and the determining factor Country, you need to specify
which party location to use by means of a class qualifier such as ship from party or ship to
party location.
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Chapter 8 - Page 9
Determining Factor – Party
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Determining Factor - Party
c l
The Party determining factor includes the following determining factor classes and their class
qualifiers:
• Legal party fiscal classification r a
- First party O ly
• Registration
l & On
- Bill From Party
- Bill To Party
n a e
- Ship From Party
t e r U s
- Ship To Party
I n
• Party fiscal classification
l e
- Bill From Party
c
- Bill To Party
r a - Point of Acceptance Party (AR transactions)
O - Point of Origin Party (AR transactions)

Chapter 8 - Page 10
- Ship From Party
- Ship To Party
• Transaction input factor
- Not applicable
The transaction input factor determining factor class groups together additional factors entered
on the transaction line that can influence tax determination. Transaction input factors can apply
to the parties, products, or processes involved in a transaction.
See: Oracle E-Business Tax: Fiscal Classifications for a discussion of legal party and party
fiscal classifications.
See: Oracle E-Business Tax: Tax Profiles and Registrations for a discussion of registration
information.
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Chapter 8 - Page 11
Determining Factor – Product
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Determining Factor – Product
c l
The Product determining factor includes the following determining factor classes and their
class qualifiers:
• Product – Inventory linked r a
- Not applicable O ly
• Product – Non-Inventory linked
l & On
n a e
- Product fiscal classification level (Levels 1-5)
• Transaction input factor (intended use, product override)
- Not applicable
t e r U s
I n
See: Oracle E-Business Tax: Fiscal Classifications for a discussion of Product – Inventory
linked and Product – Non-Inventory linked product fiscal classifications.
c l e
r a
O

Chapter 8 - Page 12
Determining Factor – Place
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Determining Factor - Place
c l
The Place determining factor includes the following determining factor classes and their class
qualifiers:
• Geography r a
- Bill From O ly
- Bill To
l & On
n a e
- Point of Acceptance (AR transactions)
- Point of Origin (AR transactions)
- Ship From
t e r U s
- Ship To
• Tax Zones
I n
l e
- Bill From
c
- Bill To
r a - Point of Acceptance
O - Point of Origin

Chapter 8 - Page 13
- Ship From
- Ship To
See: Oracle E-Business Tax: Part 1: Oracle E-Business Tax Basic Tax Configuration for a
discussion of geography types and tax zones.
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Chapter 8 - Page 14
Determining Factor – Process
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Determining Factor - Process
c l
The Process determining factor includes the following determining factor classes and their
class qualifiers:
• Document r a
O ly
- Document fiscal classification level (Levels 1-5)
& On
• Transaction fiscal classification
l
- Not applicable
n a e
• Transaction generic classification
e r s
- Classification level (Levels 1-5)
t U
• Accounting event
I n
- Accounting segments of the selected ledger
l e
• Transaction input factor
c
- Not applicable
r a
The transaction generic classification determining factor class references fiscal classification
O codes belonging to the designated level in the corresponding fiscal classification type.

Chapter 8 - Page 15
See: Oracle E-Business Tax: Fiscal Classifications for a discussion of document and
transaction fiscal classifications.
See: Oracle E-Business Tax: Part 2: Oracle E-Business Tax Basic Tax Configuration for a
discussion of tax accounts.
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Chapter 8 - Page 16
Agenda
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Chapter 8 - Page 17
Tax Determining Factor Set
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Tax Determining Factor Set
c l
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(N) Tax Managers > Advanced Setup Options > Tax Determining Factor Sets > (B) Create
O ly
Use the Create Tax Determining Factor Set page to set up a tax determining factor set. The tax
determining factor set groups together related tax determining factors for use in tax rules
& On
determination and tax regime determination.
l
Tax Rules
n a e
Associate a tax determining factor set with a rule type to use in the creation of tax rules for the
each tax rule.

t e r U s
rule type. Tax determining factors are the building blocks in the creation of tax conditions for
I n
You associate one determining factor set with each tax rule to create the tax condition sets for
the tax rule. You can maintain and reuse a tax determining factor set that you create for one
l e
rule with another rule for a different tax or a different rule type, where requirements are
c
identical. You can also reuse a tax determining factor set within the same rule type for a
r a
different condition set. You can set up determining factor sets in advance to use with tax rules,
or set up a determining factor set during the creation of a tax rule.
O Regime Determination

Chapter 8 - Page 18
Associate a regime determination set with a combination of configuration owner and
application event class to identify tax regimes and candidate taxes on transactions belong to
this configuration owner and application event class.
Tax regime determination is the first step in the tax determination process. A regime
determination set differs from tax rule determining factor sets in that the determining factors
are location types only. E-Business Tax compares the location types in the active regime
determination set to the locations specified on the transaction to identify the countries
associated with each location and the tax regimes associated with each country.
Note: By default, E-Business Tax provides a seeded regime determination set for all Payables
and Receivables transactions for all configuration owners. This regime determination set
considers all location types (except Paying Location) to look for applicable tax regimes on a
transaction. In most cases, you create alternative regime determination sets for specific
configuration owners and application event class combinations in order to narrow the number
of location types that E-Business Tax evaluates to derive eligible tax regimes. This increases
regime determination efficiency for the related transactions.
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Chapter 8 - Page 19
Tax Determination Set Setup for Tax Rules
m y
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Tax Determination Set Setup for Tax Rules
c l
Before you can set up determining factor sets for tax rules, you may need to complete one or
more of these tasks.
Prerequisites r a
O ly
• Set up tax regimes, if you intend to create a determining factor set for use with a specific
l & On
tax regime, or if you intend to use a fiscal classification determining factor class that
requires a tax regime assignment.
n a e
• Set up ledgers, if you intend to use the Accounting determining factor class. The ledger
t e r U s
accounting segments become available for use as tax condition values.
• Set up TCA geography hierarchy structures, if you intend to use the Geography
I n
determining factor class.
• Set up TCA party classifications, if you intend to use the Party Fiscal Classification or
l e
Legal Party Fiscal Classification determining factor class.
c
• Set up party tax profiles, if you intend to use the Registration determining factor class.
r a
• Set up fiscal classifications, if you intend to use a determining factor class related to fiscal
O classifications.

Chapter 8 - Page 20
• Set up tax classification codes, if you intend to use the Transaction Input Factor
determining factor class for tax classification codes.
• Set up tax zones types and tax zones, if you intend to use the User Defined Geography
determining factor class.
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Chapter 8 - Page 21
Regime Determination Set Setup
m y
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ca
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Regime Determination Set Setup
c l
Before you can set up determining factor sets for regime determination, you may need to
complete one or more of these tasks.
Prerequisites r a
• Set up tax regimes. O ly
& On
• Optionally set up tax zone types and tax zones, if you want regime determination to take
l
a e
place at the tax zone level for a location type.
n
t e r U s
I n
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O

Chapter 8 - Page 22
Agenda
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Chapter 8 - Page 23
Tax Formulas
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Tax Formulas
c l
r a
(N) Tax Managers > Advanced Setup Options > Tax Formulas > (B) Create
O ly
Use the Create Tax Formula page to set up tax formulas for use in the tax rules Determine
Taxable Basis and Calculate Tax Amounts.
Determine Taxable Basis
l & On
n a e
The Determine Taxable Basis tax rule derives the amount or quantity on the transaction line
that E-Business Tax uses to apply the tax rate. The standard taxable basis formulas are:
e r
• Taxable Basis = Line Amount.
t
• Taxable Basis = Quantity.
U s
I n
If the tax requires the calculation of a taxable basis other than the line amount or line quantity
c l e
(for example, assessable value or prior tax), then create a taxable basis tax formula and either
associate it with a Determine Taxable Basis tax rule for the applicable tax regime and tax or set
r a
it as the default taxable basis for a tax.
Calculate Tax Amounts
O

Chapter 8 - Page 24
The Calculate Tax Amounts tax rule determines the formula that E-Business Tax uses to
calculate the tax amount on the transaction line. The standard tax calculation formula is Tax
Amount = (Taxable Basis) * (Tax Rate). If the tax amount is to be altered by adding or
subtracting the tax amount of another tax , then create a tax calculation tax formula and either
associate it with a Calculate Tax Amounts tax rule for the applicable tax regime and tax or set
it as the default tax calculation formula for a tax.
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Chapter 8 - Page 25
Tax Formula Setup
m y
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Tax Formula Setup
c l
Before you can set up tax formulas, you must set up tax regimes and taxes for taxable basis tax
r a
formulas and for tax calculation tax formulas that you intend to assign to specific tax regimes
and taxes. If you do not assign a tax calculation tax formula to a specific tax regime, then it
becomes available to all tax regimes.
O ly
l & On
You must also enable cross-regime compounding and compounding precedence for the tax
regimes and taxes that will use tax formulas with compounding details.
n a e
t e r U s
I n
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O

Chapter 8 - Page 26
Agenda
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O

Chapter 8 - Page 27
Tax Condition Sets
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Tax Condition Sets
c l
r a
(N) Tax Managers > Advanced Setup Options > Tax Condition Sets > (B) Create
O ly
Use the Create Tax Condition Set and Create Tax Conditions pages to set up tax condition sets.
The tax conditions belonging to an individual tax condition set constitute the conditions to
l & On
consider in order to determine if the result of the condition is true for the applicable
transaction. The tax condition set or sets belonging to an individual tax rule constitute the logic
a e
of the tax rule—if any tax condition set belonging to a tax rule arrives at a true result, then the
n
t e r
tax rule applies to the transaction.
U s
You can set up tax condition sets in advance and apply them to a tax rule, or you can set up tax
I n
condition sets during tax rule creation.
The tax condition set specifies the factors to consider, and the resulting value that must exist
l e
for each factor, in order for the result of the tax rule to be true. Each tax condition in a tax
c
condition set consists of a tax determining factor (determining factor class/class
r a
qualifier/determining factor name), an operator, and a value.
When the elements of the transaction meet all of the tax regulations, then the rule result is true
O and the rule applies to the transaction.

Chapter 8 - Page 28
Tax Condition Sets Setup
m y
d e
ca
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Tax Condition Sets Setup
c l
Before you can set up tax condition sets, you may need to complete one or more of these tasks.
Prerequisites
r a
• Set up determining factor sets. O ly
l & On
• Set up values for the applicable determining factor classes. You should ensure that all of
n a e
the values that you need have been defined for the determining factor classes that you
intend to use in a tax condition set. For example, define all of the fiscal classification
t e r U s
codes that you need for each applicable fiscal classification determining factor class.
I n
c l e
r a
O

Chapter 8 - Page 29
Summary
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Chapter 8 - Page 30
Chapter 9
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Chapter 9 - Page 1
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Chapter 9 - Page 3
Objectives
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Chapter 9 - Page 4
Agenda
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Chapter 9 - Page 5
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n a e
e r s
This module discusses how to create a tax rule using the Expert Rule Entry.
t U
I n
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O

Chapter 9 - Page 6
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Chapter 9 - Page 7
Rules in Detail Example UK Rules Setup (Intra EU Sales)
m y
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Rules in Detail Example – UK Rules Setup (Intra EU Sales)
An example of how tax rules can be modeled in E-Business Tax includes the following
scenario:
r a
• You purchase goods from a VAT-registered business in another EU country.
• The goods are moved to the UK. O ly
& On
• You are required to account for VAT in the UK on the acquisition of the goods.
l
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Chapter 9 - Page 8
UK Rules Setup - Intra EU Sales
m y
d e
ca
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UK Rules Setup – Intra EU Sales
c l
You determine the tax rule components based on the applicable tax regulations. As indicated in
r a
this example, you set up your determining factor and tax condition sets as follows:
• Process – The tax rule is limited to purchases.
O ly
• Party – The supplier must be registered in another EC country.
& On
• Place – The goods must be delivered from an EC country into the UK.
l
Your tax rule attributes are:
n a e
• Product – The product type must be goods.
e r s
• Determine Place of Supply - The place of supply is the Ship To location.
t U
I n
• Determine Tax Registration - The ship to party must self-assess the tax.
• Determine Recovery Rate - The recovery rate rule is the default rate.
l e
The source of the tax regulations for this example is the HM Revenue and Customs – VAT
c
Guide – All Sections.
r a
O

Chapter 9 - Page 9
m y
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c l
Note that the tax regulation that limits this tax requirement to Purchases is modelled as a rule
However, the same principle applies. r a

restriction rather than a determining factor, to increase efficiency during tax processing.
O ly
l & On
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Chapter 9 - Page 10
m y
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c l
The assumption in this example is that regular intra EU suppliers have already been validated
r a
to ensure that they have a registration in another EU country. The exception should be that they
do not have a registration and you set up this exception, if needed, as a registration status, party
O ly
classification, or as a specific tax classification and additional rule to prevent intra-EU
processing.
l & On
Note. This is a condition that requires additional supplier/supplier site setup. The assumption
a e
used is that most suppliers/supplier sites have been validated as part of the manual setup
n
procedure.
t e r U s
I n
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Chapter 9 - Page 11
m y
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c l
This tax regulation applies to goods only. Therefore, set up the product type equal to goods.
r a
O ly
l & On
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Chapter 9 - Page 12
m y
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c l
In order to indicate that this tax regulation refers to goods shipped from another EU country to
• Country of Ship To equal to UK. r a

the UK, you set up your determining factor and tax condition sets as:
O ly
• Economic region of Ship From equal to EEC.
& On
• Country of Ship From is not equal to UK.
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Chapter 9 - Page 13
m y
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c l
Bringing these concepts together, if the conditions are true, then the result of the Tax
r a
Registration rule is Bill To Party (for example, the customer must self-assess the tax and
charge themselves VAT based against their own registration number).
O ly
l & On
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I n
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O

Chapter 9 - Page 14
m y
d e
ca
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c l
Bringing these concepts together, if the conditions are true, then the result of the Place of
r a
Supply rule is Ship To Location (for example, the customer must self-assess the tax and charge
themselves VAT using the tax of the country where the goods have been sent to).
O ly
l & On
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t e r U s
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O

Chapter 9 - Page 15
Agenda
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Chapter 9 - Page 16
Rules in Detail Example Summary UK Rules Setup (Intra EU
Sales)
m y
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ca
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c l
Rules in Detail Example Summary – UK Rules Setup (Intra EU Sales)
r a
Based on the example, you set up determining factor and tax condition sets as follows:
O ly
• Process – The tax rule is limited to purchases.
• Party – The supplier must be registered in another EU country.
l & On
• Place – The goods must be delivered from an EU country into the UK.
a e
• Product – The product type must be goods.
n
t e r U s
Results associated with the tax condition set:
• Determine Applicable Tax Regimes and Candidate Taxes - The tax is UK VAT in the tax
regime UK VAT.
I n
• Determine Place of Supply - The place of supply is the Ship To party and the tax
l e
jurisdiction is the UK.
c
• Determine Tax Registration - The registration party type is the Ship To party, and the ship
r a to party must self-assess the tax.
O • Determine Tax Status and Tax Rate - The applicable status and rate for UK VAT.

Chapter 9 - Page 17
Note. The first three columns (Determining Factor, Determining Factor Class, and Class
Qualifier) represent tax determining factors and the elements of a tax determining factor set.
Each line represents a tax condition (Determining Factor + Operator + Resulting Condition).
One or more tax conditions comprise a tax condition set, with the determining factors of the tax
conditions drawn from the one determining factor set assigned to the tax rule.
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Chapter 9 - Page 18
Guided Demonstration - Set Up a Tax Determination Set for Tax
Rules
Sign on
Field Value
User Name XXUSER
Password welcome
created.
Responsibility: Tax Managers Vision UK
1. Navigate to the Create Tax Determining Factor Sets page.
• (N) Advanced Setup Options > Tax Determining Factor Sets
• (B) Create
Note. You are setting up a tax determining factor set for the UK Rules Setup example: tax
regulation referring to goods shipped from another EU country to the UK.
2. Enter general information:

m y
Field Value
d e
Tax Determining Factor Set UK GEOG DF 00
ca
Name
Set Usage
e
UK GEOG DF 00
Tax Rules A
c l
3.
Field
r a
Associate tax determining factors based on the following information:
Value
Determining Factor Class
O ly Geography
Class Qualifier
l & On Ship To
Determining Factor Name
n a e Country
•
Required
(B) Apply t e r U s Yes
I n
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O

Chapter 9 - Page 19
Guided Demonstration - Set Up a Tax Condition Set
Sign on
Field Value
User Name XXUSER
Password welcome
created.
1. Navigate to the Create Tax Determining Factor Set page.
• (N) Advanced Setup Options > Tax Condition Sets
• (B) Create
Note. You are setting up a tax condition set for the UK Rules Setup example: tax regulation
referring to goods shipped from another EU country to the UK.
2. Enter general information:

Field Value
m y
Tax Condition Set UK GEOG CS 00
d e
Name UK GEOG CS 00
ca
Determining Factor Set
e
UK GEOG DF 00
A
• (B) Continue
c l
3. Enter tax condition options:
r a
Operator
Field
O ly Equal To
Value
Value / From Range

l & On United Kingdom
To Range
n a e Blank
Ignore Condition
t e r U s Cleared
• (B) Finish
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O

Chapter 9 - Page 20
Agenda
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Chapter 9 - Page 21
Tax Rules
m y
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Tax Rules
c l
E-Business Tax provides two entry flows for setting up your tax rules:
r a
• Guided Tax Rule Entry - The guided tax rule entry provides a five-step flow that lets you
build determining factors and tax conditions as you create the tax rule. See: E-Business
O ly
Tax: Part 1: Setting Up Tax Rules for a description of the guided tax rule entry.
l & On
• Expert Tax Rule Entry - The expert tax rule entry provides a concise, three-step entry flow
that makes use of determining factor sets and tax condition sets that you have previously
a e
defined. Setting up tax rules using the Expert Tax Rule Entry is discussed in this module.
n
t e r U s
I n
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O

Chapter 9 - Page 22
Tax Rules – Expert Rule Entry
m y
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Tax Rules – Expert Rule Entry
c l
r a
(N) Tax Managers > Tax Rules > (I) Expert Rule Entry
O ly
Set up tax rules using the expert rule entry when you are more familiar with the concepts of tax
rules and tax determination. To use the expert rule entry, you must set up tax determining
l & On
factor sets and tax condition sets for use with the rules that you intend to create. You can
optionally set up a tax determining factor set during tax rule entry. Use the following pages to
set up tax rules:
n a e
• Tax Rules
t e r U s
• Create Tax Rule: General Information
I n
• Create Tax Rule: Condition Results
c l e
• Create Tax Rule: Rule Order
See: Oracle E-Business Tax: Part 1: Setting Up Tax Rules for general information about
r a
setting up tax rules.
See: Oracle E-Business Tax: Part 2: Setting Up Tax Rules for an explanation of tax
O determining factor sets and tax condition sets.

Chapter 9 - Page 23
Guided Demonstration - Set Up Determine Place of Supply Rule
Using the Expert Rule Entry
Sign on
Field Value
User Name XXUSER
Password welcome
created.
Note. This guided demo requires that a UK VAT model was created in Practice: Create a Regime
to Rate Tax Model.
2. Access the rule type for your tax regime and tax created in the Practice: Create a Regime to
Rate Tax Model.
m y
Field
Configuration Owner
Value
d e
Tax Regime Code UK VAT XX
ca
Tax
e
UK VAT XX
A
• (B) Go
c l
•
r a
(B) Create Expert Rule Entry (on the Determine Place of Supply row level)
O ly
Note. You are setting up a Determine Place of Supply tax rule for the UK Rules Setup example:
l & On
tax regulation referring to goods shipped from another EU country to the UK. We use the tax
determination set and tax condition set created in the previous guided demos.
n a e
3.
t e
Fieldr
Enter general information and determining factor set:
U s Value
I n
Tax Law Reference Blank
c l e
Description
Event Class Category
Blank
Blank
O ra Rule Code
Name
UK VAT RULE INS
UK VAT RULE INS

Chapter 9 - Page 24
Effective To Current Date
Note. Make the rule
effective for one day and
outside the effective date
for the tax. It won’t affect
the tax calculation on the
transaction (the system
will use the default for this
rule type).
Determining Factor Set Code UK GEOG DF 00
• (B) Next
4. Enter rule conditions:

Field Value
Condition Set Code UK GEOG CS 00
Result Ship To
5.
• (B) Next
Enter rule order options:

m y
Field Value
d e
Enable Select
ca
Rule Order
e
1
A
• (B) Finish
c l
r a
O ly
l & On
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O

Chapter 9 - Page 25
Summary
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Chapter 9 - Page 26

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R12 Oracle E-Business Tax

U.S. GOVERNMENT RIGHTS

Mary Kalway, Robert MacIssac

Technical Contributors and Reviewers

Ramasubramanian Balasundaram, Rajesh Bhatt, Nigel Chapman, Kevan Davies, Julianna

Oracle E-Business Tax Overview ...................................................................................................................1-1

Part 1: Oracle E-Business Tax Basic Tax Configuration...............................................................................2-3

Copyright © Oracle Corporation, 2007. All rights reserved.

R12 Oracle E-Business Tax Fundamentals Table of Contents

Tax Reporting Types .....................................................................................................................................3-29

Copyright © Oracle Corporation, 2007. All rights reserved.

R12 Oracle E-Business Tax Fundamentals Table of Contents

OPart 1: Setting Up Tax Rules ..........................................................................................................................7-1

Copyright © Oracle Corporation, 2007. All rights reserved.

R12 Oracle E-Business Tax Fundamentals Table of Contents

OPart 3: Setting Up Tax Rules ..........................................................................................................................9-1

Copyright © Oracle Corporation, 2007. All rights reserved.

R12 Oracle E-Business Tax Fundamentals Table of Contents

Guided Demonstration - Set Up a Tax Recovery Determination Rule ......................................................10-22

O Solution – Create Transactions with Applicable Tax ................................................................................11-35

Copyright © Oracle Corporation, 2007. All rights reserved.

R12 Oracle E-Business Tax Fundamentals Table of Contents

R12 Oracle E-Business Tax Fundamentals Table of Contents

• Basic knowledge of business accounting concepts.

• Working experience with business tax requirements.

• Thorough knowledge of Oracle Applications.

• R12 Navigate Oracle Applications

• R12 eBusiness Suite Essentials for Implementers

How This Course Is Organized

R12 Oracle E-Business Tax Fundamentals Table of Contents

• System release bulletins

• Installation and user’s guides

• International Oracle User’s Group (IOUG) articles

R12 Oracle E-Business Tax Fundamentals Table of Contents

R12 Oracle E-Business Tax Fundamentals Table of Contents

Passwords DROP USER scott

Lowercase Syntax variables CREATE ROLE role

Typographic Conventions in Oracle Application Navigation Paths

O (ST) = Sub Tab

Copyright © Oracle Corporation, 2007. All rights reserved.

R12 Oracle E-Business Tax Fundamentals Table of Contents

The following help navigation path, for example—

(Help) General Ledger > Journals > Enter Journals

—represents the following sequence of actions:

2. Under the General Ledger entry, expand Journals.

3. Under Journals, select Enter Journals.

R12 Oracle E-Business Tax Fundamentals Table of Contents

Oracle E-Business Tax Overview

Oracle E-Business Tax Overview

Oracle E-Business Tax Overview

Oracle E-Business Tax Overview

O • Date affectivity on your tax configuration.

Copyright © Oracle Corporation, 2007. All rights reserved.

Oracle E-Business Tax Overview

Oracle E-Business Tax Overview

Oracle E-Business Tax Overview

Oracle E-Business Tax Overview

Oracle E-Business Tax Overview