Archive for 2013

Oracle eBTax naming convention – when to use ZERO RATE


On many implementations I work on, the client will often have a ‘ZERO’ rate when in actual fact, they don’t have any zero rated produced under their tax regime. There are only a few exceptions to this, the UK being one of them with a genuine Zero Rate.
The reason why you should not call a rate ‘Zero’ when it is not a zero rated supply is due tot he following statement;

If you sell zero-rated goods or services, you can generally reclaim VAT on any purchases that relate to those sales. This is in contrast to if you sell only exempt goods or services, where you cannot normally reclaim VAT on your purchases – see the section on when VAT mustn’t be charged.

So use exempt, out of scope but not Zero unless your rate genuinely is zero rated.

Oracle R12 – cannot update legal entity tax registrations

Ever had the issue where you try and access your legal entity to assign the tax registrations to it and it either errors out or shows error messages

the issue is caused by a second tax created because tax rules exist both globally and for an OU/LE.

When the ‘Tax’ is created that has the OU as the owner, it copies the values from the Globally owned ‘Tax’. The issue is caused when a change is made to the globally owned tax but not the OU owner tax and as a reulst there is an inconsistancy int he tables that leads to the error.

contact me if you need further help on this.

Oracle R12 eBTax Tax Zone Issues

Ok,

so here is the set up,

Tax Zone Type = Economic Regions
Tax Zone Name = European Economic Community – has all 28 EU countries
Tax Zone Name = French Territories – has all the French Territories in it
Tax Zone Name = UK Tax Jurisdiction – has GB and Isle of Man in it

Tax Zone Type = Country Tax Zones Continue Reading

Oracle eBTax, removing the need for a separate tax rate to allow for inclusive tax


I had a discussion with a senior Oracle developer at openworld where they saying about changing the way the tax logic worked for the inclusive tax so that rather than having to create a separate tax rate that is set as inclusive, you would just use a tick box on the invoice. His reasoning was that the tax rate should not need to be duplicated just to be able to change the ‘standing’ of the rate. You really cannot have it as a manual tick box in the tax details as this would slow down users especially when rules are often needed to drive whether the tax is inclusive or not. However, I think from the design of the tax solution, I think removing the need to set the tax rate as inclusive or not is an excellent step forward but I think you need to go further.

Continue Reading

oracle apps13 ebtax upgrade presentation

I am pleased to announce that I will now be presenting at this years APPS13 for the UKOUG on Tuesday 15th October at 2.40pm

Fully Automating eBTax when upgrading from 11i to R12 with New E-Business Tax Rules

OAUG Tax Management SIG Presents: Simplified Configuration Templates for Fusion Tax

OAUG Tax Management SIG Presents: Simplified Configuration Templates for Fusion Tax

 
Join us for a Webinar on October 25 2013

Register Here 

Oracle eBTax – reasons not to use Tax on GL Journals

Any transaction that has VAT or Tax on it should be going through the sub ledgers, such as AP and AR and not directly entered into the GL as a journal.

Below is a list of points that should be considered highlighting the issues that may be faced if the choice is to  still use journals to capture VAT.

  • Not possible to determine if it is a sale or purchase (credit) so cannot be used easily for any allocations or VAT returns
  • There are no determining factors on a journal for the tax engine to work so the tax is 100% manual
  • Tax has to be entered and calculated in a certain way or risk accidental posting to a VAT account but not reporting it causing reconciliation issues
  • Not linked to any recovery rates so all AP accounts have to be manually overwritten
  • No Security so can choose a tax rate from a regime that is not linked to the LE/OU and so whilst calculated would not be reported
  • importing journals from ADI can be difficult if the tax is required

please contribute to this list

Recorded OAUG eBTax User Community Webinars, September 2013

For the most recent eBTax Webinars, follow the links

extreme tax hacks 1 – http://oaug.org/component/phocadownload/file?download=4112

extreme tax hacks 2 – http://oaug.org/component/phocadownload/file?download=4125

Oracle R12 eBTax Italy rate rise to 22%

Italy VAT rise to 22% on 1 Oct 2013

The planned rate rise that had been put off has now gone ahead and is in effect as of today, 1st October 2013. So please ensure you have updated your tax rates in Oracle R12 and Fusion tax, dont forget to also change your offse tax amounts!

 

The reduced VAT rates of 10% and 4% will not change.

Contact us if you need help changing your tax rate in Oracle

Oracle Fusion Tax demo

We will be organizing a demo on Oracle Fusion Tax shortly, please let us know if you would be interested and then we can send you the information to be able to join us on the webinar.

Will we ever have DFFs as Tax Determining Factors?

We all know the limitations with the tax module, primarily with the limitations that the determining factors give us. Many of us who have worked with eBTax for a while have asked for the ability to have DFFs as determing factors.

But, will we ever have DFFs as Tax Determining Factors?

The answer is probably not. Having spoken with Oracle Product development at this years Oracle Open World, the key issue is that a DFF that maybe linked to a Purchase order line is not going to be available in the AP workbench meaning that the tax engine wont have the same info in AP that it had in PO!

Its a fair comment and I understand the limitations.

 So… Whats the alternative?

At present I am not at liberty to say but Oracle development do have a unique concept that would allow a very similar approach that would get over the issue of DFFs not being available to all modules. So, watch this space for further updates.

OAUG User Communities for the Bi-Annual Webinar Series 2013

Join the OAUG User Communities for the Bi-Annual Webinar Series on September 16 and 19, 2013

The OAUG User Communities bi-annual Webinar series, including 2 sessionon on eBTax will be held September 16 and 19, 2013. Each webinar is FREE and open to all members of the User Communities and OAUG.

Registration for the series is now open and you may register for one or more sessions. High quality content will be presented by multiple User Communities including:

  • AP SIG
  • AR, Credit and Collections SIG
  • Asset SIG
  • Cost Management SIG
  • EBS User Management SIG
  • Hyperion SIG
  • Multi-National / Multi-Organization SIG
  • OAUG NJ
  • OAUG NYC
  • Procurement SIG
  • SysAdmin SIG
  • Tax Management SIG

The Geo/SIG Committee looks forward to your participation in this series. Links to register for all sessions are available below. For questions or assistance, please contact the Geo/SIG Manager at geo-sig@oaug.com

The following OAUG Webinars are being presented the week of September 16-20

eBTax Extreme Hacks 1 with the Tax Management SIG on September 16, 2013

Legalize It (Round the World)  Statutory & Management Reporting in Global Implementation with the Multi-National SIG on September 16, 2013
Utilizing Asset Source Lines with the Asset SIG on September 16, 2013
Implementing Oracle Hyperion Profitability and Cost Management in a Professional Services Firm with the OAUG Nj on September 16, 2013
Working Effectively with Oracle’s Public APIs: Finding, Understanding, Using, Tuning & Extending with OAUG NYC on September 17, 2013
E-Business Suite DBA Best Practices with the SysAdmin on September 17, 2013
Finding Your Way Through Localizations & Globalizations  – Hitchhiker Guide for the Adventurous  presented by the Multi-National SIG on September 17, 2013
60 Inventory Orgs & 6 Ledgers? No Worries  – Reconcile Your G/L to Inventory Perpetual Balances with the Cost Management SIG on September 18, 2013
A Mobile Strategy for Oracle EPM with the Hyperion SIG on September 18, 2013
Understanding Asset Tables with the Asset SIG on September 18, 2013
Oracle Financial Close Management  Embrace the Change with the OAUG NYC on September 19, 2013
eBTax Extreme Hacks 2 with the Tax Management SIG on September 19, 2013
R12 Surprises in User Management with the EBS User Management SIG on September 19, 2013
AR, Credit and Collections SIG  Knowledge Through Shared Experiences with the AR, Credit and Collections SIG on September 19, 2013
Global Implementation Projects Which Are Considering Using Oracle Tax Manager with the AP SIG on September 20, 2013

Take the risks out of compliance by making your ERP work with VAT


Take the risks out of compliance by making your ERP work with VAT
There are many reasons why VAT can introduce variables into your ERP, variables that can be problematic. Something as simple as a change in the supply chain can make changes in the way VAT is handled in your company, and if your ERP doesn’t reflect this change it could lead to heavy penalties when you submit your return.

What happens when you are found to be at fault with VAT?
If you are found to be non-compliant, you are looking at heavy and punishing penalties. These penalties will have a direct impact on your bottom line. If the authorities find that your VAT is not compliant, you will have to re-invoice customers, ensuring that you pay for any debt that is missing.
The companies we know and visit use Oracle for ERP. However, they are not using it effectively for VAT management and returns. And the reason usually lies in the set-up of the tax module they have running with Oracle (eBTax). Whoever set up that module most likely configured it incorrectly, so vital aspects of VAT are managed poorly.
VAT has so many variables, especially with new policy and other aspects such as the status of a customer that it cannot be left to chance. However, some companies are still dealing with VAT manually.
 
Your configuration
Are you confident that your Oracle ERP tax solution has been correctly setup, and meets your fiscal and reporting requirements to ensure that you are fully VAT compliant?
The companies we work with have eBTax set up on Oracle. But it may have been set up incorrectly, and this poor quality configuration means that you aren’t using clear ‘tax logic’. The team that inputs your financial information through the module may be working with a poorly configured module, so that business ‘events’ like a change in supply chain details will have a negative effect.
Businesses that use Oracle and eBTax need to know if the configuration they are using is appropriate. If they don’t know this, the money spent on such a ‘solution’ could simply be a waste.
But how do you know if your configuration of eBTax is correct? How do you know if it is managing and reporting on VAT accurately?
That’s where we come in.
For more information contact us on info@ebizanswers.net or look at our website on www.ebizanswers.net
 

is there an alternative to vertex, taxware for a data file to load geographies and selected rates?

We have now built a database that will allow you to choose what rates you want to load into your Oracle R12 and Fusion application. It will contain all the geography structure that is loaded into  the TCA from State to Zip-code and then you can choose the rates.

What we have done is provide the raw data so we don’t maintain all the rates on an on-going basis. So if you are running a 2 year project and need the geographies for tax validation and are happy with a blank tax rate of 1% so you can test then we have the solution for a fraction of the cost. When you then decide to go to a 3rd party, you simply end date our tax solution and load theirs but all the geography will already be in place ready for you.

Or if you are an entity that has few on no customers but wants to use a managed tax solution then we can provide you with the data so that tax is only calculated on the locations you want.

get in touch with us www.ebizanswers.net

Italian Tax Black List

Ministry of Finance Decree of 04/05/1999 – art. 1 Title of the measure:Identification of states and territories having a preferential tax regime Title of document:States tax-privileged purposes income tax  Text: in force since 10/05/1999Are considered tax-privileged purposes of, the application of Article. 2, paragraph 2-bis of the Consolidated Income Tax, approved by Decree of the President of the Republic on 22 December 1986, no. 917, the following States and territories:

Alderney (Aurigny);

Andorra (Principat d’Andorra); 
Anguilla;
Antigua and Barbuda (Antigua and Barbuda);
Netherlands Antilles (Netherlands Antilles); 
Aruba;Bahama (Bahamas); 
Bahrain (Dawlat al-Bahrain); 
Barbados;
Belize; 
Bermuda;
Brunei (Negara Brunei Darussalam);
Cyprus (Kypros); 
Costa Rica (Republica de Costa Rica); 
Dominica; 
United Arab Emirates (Al-al-Imarat, the Muttahida Arabiya);
Ecuador (República del Ecuador);
Philippines (Pilipinas);
Gibraltar (Dominion of Gibraltar); 
Djibouti (Djibouti);
Grenada; 
Guernsey (Bailiwick of Guernsey);
Hong Kong (Xianggang);
Isle of Man (Isle of Man);
Cayman Islands (The Cayman Islands); 
Cook Islands;
Marshall Islands (Republic of the Marshall Islands);
British Virgin Islands (British Virgin Islands); 
Jersey;Lebanon (Al-Jumhuriya to Lubnaniya);
Liberia (Republic of Liberia);
Liechtenstein (Principality of Liechtenstein); 
Macao (Macau); 
Malaysia (Persekutuan Tanah Malaysia);
Maldives (Divehi);
Malta (Republic of Malta); 
Mauritius (Republic of Mauritius); 
Monserrat; 
Nauru (Republic of Nauru); 
Niue;
Oman (Saltanat, Oman); 
Panama (Republica de Panama ‘);
French Polynesia (French Polynesia);
Monaco (Principaute ‘de Monaco); 
San Marino (Republic of San Marino);
Sark (Sark); 
Seychelles (Republic of Seychelles);
Singapore (Republic of Singapore); 
Saint Kitts and Nevis (Federation of Saint Kitts and Nevis); 
Saint Lucia; 
Saint Vincent and the Grenadines (Saint Vincent and the Grenadines);
Switzerland (Swiss Confederation); 
Taiwan (Chunghua MinKuo); 
Tonga (Tonga Pule’anga); 
Turks and Caicos (The Turks and Caicos Islands); 
Tuvalu (The Tuvalu Islands);
Uruguay (Republica Oriental del Uruguay); 
Vanuatu (Republic of Vanuatu);
Samoa (Independent State of Samoa).


This decree will “Gazzeta published in the Gazette of the Republi Italian.

Ministry of Economy and FinanceDecree of 21/11/2001Title of the measure:Identify countries or territories with preferential tax regime ofArticle. 127-bis, paragraph 4, of the consolidated taxincome (ed.black list “).(Published in the Official Gazette no. 273 of 23/11/2001)PreamblePreamble.Text: in force since 24/11/2001THE MINISTER AND ECONOMICS AND FINANCEHaving regard to Articles 2 and 23 of the Legislative Decree of 30 July 1999, no. 300,concerning the establishment of the Ministry of Economy and Finance; In view of art. 127-bis, paragraph 4, of the consolidated income tax,approved by Decree of the President of the Republic on 22 December 1986, no.917, introduced by Art. 1, paragraph 1, letter a) of the Law of 21 November2000, no. 342, which provides that by decree of the Minister, the economy andfinance are identified states or territories with a regimeprivileged tax;Since, according to the provisions of the aforementioned paragraph 4 of Art.127-bis of the Consolidated predicted income tax, must beconsidered privileged tax regimes of countries or territories on the basisthe level of taxation significantly lower than that applied inItaly, the lack of an adequate exchange of information or ofother criteria equivalent;Considered that, for the purposes of that legislation, and, taking into accountthe category of income from business and that, for them, the measuretaxation applied in Italy includes l, income taxlegal persons el, regional tax on business’ production;Considering that the Chamber of Deputies, in its meeting of 4 October 2000,during which, and was approved the Law of 21 November 2000, n. 342, hasformally committed the Government “in the first application of the newdiscipline to define a transitional measure, what level of taxationsignificantly lower than that on average it differs by at least 30%from the average level of taxation applied in Italy “;Considering, finally, that the list of countries and territories with apreferential tax regime for the purposes of Article. 127-bis of the Consolidatedincome tax and, in any case subject to change andintegrations based on the possible acquisition of additional elementsinformation relating to the tax legislation of foreign states;Decrees:art. 1Been to favorable tax regime.Text: in force since 24/11/20011.  

For the purposes of, the application of Article. 127-bis of the Consolidated income tax, approved by decree of the President of the Republic December 22, 1986, n. 917, are considered states and territories with a regime privileged tax: 
Alderney (Channel Islands), Andorra, Anguilla, Netherlands Antilles, Aruba,Bahamas, Barbados, Barbuda, Belize, Bermuda, Brunei, Cyprus, Philippines,Gibraltar, Djibouti (formerly Afars and Issas), Grenada, Guatemala, Guernsey (IslandsChannel), Herm (Channel Islands), Hong Kong, Isle of Man, Cayman Islands,Page 1Decree of 21/11/2001Cook Islands, Marshall Islands, Turks and Caicos Islands, British Virgin Islands,The U.S. Virgin Islands, Jersey (Channel Islands), Kiribati (formerly IslandsGilbert), Lebanon, Liberia, Liechtenstein, Macau, Maldives, Malaysia,Montserrat, Nauru, Niue, New Caledonia, Oman, French Polynesia, SaintKitts and Nevis, Solomon, Samoa, Saint Lucia, Saint Vincent and the Grenadines,St Helena, Sark (Channel Islands), Seychelles, Singapore, Tonga, Tuvalu(Formerly Ellice Islands), Vanuatu.art. 2 

Other states at subsidized regime.Text: in force since 14/01/2003 
1. Shall also be including among the states and territories whose wings
1) Bahrain, with the exclusion of the companies, which play exploration, extraction and refining in the oil sector; 
2) United Arab Emirates, with the exclusion of the company, oil and petrochemicals subject to tax; 
3) (Number repealed); 
4) Monaco, excluding companies that perform at least 25 revenue out of the Principality.art. 1: activities, of operating in art. 3 
Been to favorable tax regime with subjective and objective limits.Text: in force since 24/11/20011. The provisions specified in Art. 1 shall apply to the following States andlimited to those areas and activities “for each of them indicate 
 1) Angola, with reference to the companies’ oil that have obtainedexemption from, Oil Income TaxOf companies’ which enjoy exemptions orabatements, set in key areas of, and for the Angolan economyinvestments under the Foreign Investment Code; 
2) Antigua, with reference to international business companies,those carrying on their business outside the territory of Antigua, whichthose laid down in International Business Corporation Act, no. 28 of 1982 andsubsequent amendments and additions, as well as’ with reference to companies,that produce licensed products, such as those referred to local law no.18 of 1975 and subsequent amendments and additions; 
3) South Korea, with reference to companies, which enjoy thefacilities provided by the tax Incentives Limitation Law; 
4) Costa Rica, with reference to the companies’ proceeds of which flow into thefrom foreign sources, and, with regard to companies, carrying out activities,high-tech; 
5) Dominica, with reference to international companies merchants1’attività, abroad;
6) Ecuador, with reference to companies’ operating in the Free TradeZones which are exempt from income tax;
7) Jamaica, with reference to the company, the production forexport who enjoy the benefits of tax, Export IndustryEncourage Act and the companies’ located in the territories identified by theJamaica Export Free Zone Act; 
8) Kenya, with reference to the companies’ established in the ExportProcessing Zones;
9) Luxembourg, with reference to the company, the holding company of which the localLaw of 31 July 1929; 
10) Malta, with reference to companies’ whose proceeds flowed in from foreign sources, such as those of the Malta Financial Services Centre Act,companies’ referred to in Malta Merchant Shipping Act and the companies, Of whichat Malta Freeport Act; 
11) Mauritius, with reference to the companies’ “certified” thatinvolved in services exports, industrial expansion, tourism management,industrial buildings and clinics and are subject to Corporate Tax inlesser extent, to the Off-shore Companies and International Companies; Decree of 21/11/2001 
12) Puerto Rico, with reference to the company “carrying out activities”bank and the companies’ under the Puerto Rico Tax Incentives Act of1988 or from Puerto Rico Tourist Development Act of 1993;
13) Panama, with reference to companies’ whose proceeds flowed in from foreign sources, under the laws of Panama, the companies’ located in Colon Free Zone and companies, operating in the Export Processing Zones;
14) | Switzerland, with reference to companies’ are not subject to tax cantonal and municipal authorities, such as companies, holdings, auxiliary and “Home “; 
15) Uruguay, with reference to the companies ‘carry on the business’ bank and the holding company engaged exclusively, off-shore. 

2. The provisions of paragraph 1 shall apply also to the entities and theactivity ‘established in Member referred to in that paragraph which benefit from tax regimes broadly similar to those indicated above, in virtue ‘of agreements or provisions of, financial administration of the those States. 

This decree will be ‘published in the Official Gazette of theThe Italian Republic.