Oracle EBTax Implementation

( A Case Study for EU Regimes)

- Donald Fernandes
2012
 About Company ABC
• Public Internet-services based Company
• US headquarters with Int’l Operations
• Oracle R12.1.3 Financials and HRMS
• 50 End-Users + 5 Power-Users (Oracle)
 Agenda
• Business Requirements
• Implementation
• Business Process Changes
• Reporting
• Challenges and Limitations
• Next Steps and Q&A
 EBTax: Business Requirements
• Maintain Tax Rates for specific EU Jurisdiction
• Record VAT ID for eligible Customers
• Record VAT Rate on AR Invoices
• Record VAT Rate on AP Invoices
• Print VAT details on AR Invoices
• Automate Accounting for Input and Output VAT
• Generate regulatory reports (example VIES)
• Perform AR Invoice Adjustments for Tax
Implementation Summary
 Implementation: EBTax Basics
Debut Platform R12
Current Patchset Level 12.1.3
Application Short Name ZX
Subscribing Oracle Modules AR, AP, PO, GL, TCA, INV
Seeded Oracle Responsibilities Tax Managers
Tax User
 Configuration Specifications
• Global Ownership of EU Tax Regimes
• Multiple EU Tax Authorities
• One Tax Regime, Jurisdiction per EU Country
• Multiple Legal Entities per Jurisdiction
• Manual Maintenance of Tax Codes and Rates
• Legal Justification Message Text
• Allowance for Manual Tax Rate Overrides
• Integration with AP and AR Transactions
• Provision for Tax Recoverability
EBTax Data Model
Extensions
(to Standard EBTax)
 Extensions Summary
• Automated Computation of Tax
• Generation of Regulatory VIES Report
• Third-Party determination of Tax Code for
standard AutoInvoice program
• Capture Customer VAT Id within standard
Customer Interface program
• Printing of appropriate LJM on Customer
Invoices
 Automated Tax Computation

Tax Determination Factor Set

Tax Condition Set

 Regulatory VIES Reporting
• Data Sourced from Receivables
• Quarterly and Annual Versions
• Custom Concurrent Program w/ XML Output
• Electronic Filing
Autoinvoice Plug-in
Impacted Interface
Columns
LINE_TYPE=TAX
TAX_RATE_CODE
TAX
TAX_RATE
EU Invoice Printing
Business Process Change
Highlights
 Business Process Changes
• Offline Validation of Customer VAT ID
• Determination of VAT Codes for Receivables
• Regulatory Reporting of Output VAT for VIES
• Internal Reconciliation of Output and Input VAT,
using standard Financial Tax Register EBTax report
• Manual Maintenance of VAT Tax Rates by
Jurisdiction
• Tax-Only Adjustment in Receivables
 Business Process Changes
• Validation of Customer VAT ID
 Business Process Changes
• AP Invoice Validation, Accounting, Application
 Business Process Changes
• Tax-Only Receivable Adjustment
 Report Listings
• Financial Tax Register
• VIES Reports
• Exception Reports
EBTax: Challenges and Limitations
Does not replace 1099 Tax Processing and Reporting
Does not provide Withholding Tax functionality
Does not provide interface to upload Tax content data
Does not compute Payroll Tax
No public APIs to incorporate custom Tax Rules
Out-of-box cannot meet all statutory Reporting Needs
Technical Data Model does not adhere to EBS standards
Overall design is too “location-centric”
Most configurations are irreversible; only may be end-
dated
 Next Steps
• Automated Validation of Customer VAT
• Automated update/load of VAT Rates
• Custom Reports for detecting Taxation
exceptions
• Record Customer Tax Exemptions
• Automated Self-Assessment for Taxes on
Payables Invoices