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Japan to increase Consumption Tax and introduce other reduced rates

The Japanese government has recently announced an increase of Consumption Tax from 8% to 10%, along with the introduction of a reduced rate of 8% that will be levied on basic foodstuffs and beverages.

This is currently due to take effect on the 1st of April 2017, however this rise has already been delayed once in 2015 and because of the current lack luster economy there is potential for it to be delayed yet again.

The decision to bring in a reduced rate on basic foodstuffs and beverages is being considered to ease the burden on consumers after recent similar rate increases pushed the economy back into a recession. This was the case in 2014 when Consumption Tax was increased from 5% to 8%, raising indirect tax from Yen 8 trillion to Yen trillion in just two years.

Nevertheless, this time it appears that they will still go ahead as Mr Aso, the Finance Minister, told parliament “Without attaching conditions about the state of the economy, we will certainly raise consumption tax to 10 per cent in April 2017”. So companies should start preparing for this as soon as they can to be ready for the tax rate increase and the introduction of a reduced rate early next year.

Hungary to cut VAT on Restaurants and Basics

The Hungarian government has announced its plans to cut VAT on restaurants, café services, milk, eggs and poultry by 2017.

According to this recent proposal as from the 1st of January 2017, the VAT on food basics – milk, eggs and poultry will be cut from the current rate of 27% down to 5%. In addition to this the VAT on restaurant and café services will drop from 27% to 18% with plans to cut this further to 5% in 2018. This is a follow on from early cuts which brought the VAT on pork down from 27% to 5%.

Whilst this will bring a shortfall in revenue for the government they believe that it will have no operational deficit as this loss will be covered by higher expenditure and faster growth, with GDP expected to pick up to 3.1% next year from 2.5% expected this year.

There is also the potential that internet will also be cut from 27% to 18%.

Will Sri Lanka implement increased VAT rate?

Sri Lanka’s Ministry of Finance have recently announced that they will be increasing the current VAT rate of 11% to 15% as of 2nd May 2016. This announcement causes some confusion and doubt as similar recent proposals have been scrapped at the 11th hour. In 2015 it was announced that from the 1st January 2016 the flat rate of 11% would be replaced by 3 different tax rates;

1. All Services to be subject to 12.5% VAT
2. All Goods to be subject to 8% VAT
3. The export of all Goods and Services for foreign currency receipt, subject to 0% VAT. Continue Reading

Canada – New Brunswick increase HST

The Canadian province of New Brunswick has announced plans to increase its Harmonized Sales Tax (HST) rate from 13% to 15% as of 1st of July 2016 in a hope to bring in about $300 million in revenue for the cash-strapped provincial government. They are also increasing Corporate Tax from 12% to 14% in order to draw in more revenue to cover their large budget deficit.

HST is a combination of Canadian Federal Goods and Services Tax, currently 5%, plus the local provincial tax, this is the part that New Brunswick are increasing from 8% to 10%. See the governments recently released transitional rules for the HST increase for further information on the subject.

 

Puerto Rico Delay VAT Implementation Until June 1st

Puerto Rico aimed to introduce the implementation of Value Added Tax (VAT) or ‘IVA’ (its Spanish equivalent) on April 1st 2016, however, the Puerto Rican Treasury Department issued an Administrative Determination (DA16-04) on March 8th officially postponing this change until June 1st 2016. It is believed by some that the introduction of VAT could be postponed altogether.

The main reason for this postponement is so that the Legislature and Governors’ office have time to review a number of proposals for a tax reform that may supplement or replace the implementation of VAT altogether. Another issue that has affected the decision is the increasing concern shown by many businesses operating out of Puerto Rico at not being able to comply with their VAT requirements by April 1st. A 60-day grace period established within Act 72-2015 has allowed for this delay to be officially enforced.

More on Act 72-2015 Continue Reading

OAUG COLLABORATE 16

It’s that time of year again and we’re getting ready to head off to Las Vegas for Collaborate 16.

Produced by three independent user groups – IOUG, OAUG and Quest, Collaborate is the ONE event that delivers powerful Oracle Applications and Technology education to maximize results for the future.

Hear the buzz about all the new products, services and solutions, join us at COLLABORATE 16 for;

1200+ educational sessions crammed with case studies, first-hand experiences and practical application content – stay for the myriad networking opportunities spanning 4 1/2 action-packed days.

Content featured covers information from across 18 tracks, developed for both functional and technical users.

Enhanced features including four new learning journeys. Follow groups of sessions specifically dedicated to explaining Cloud, Mobility, Security and Big Data.

Interactive time with the Oracle development and management teams behind the products you use. Continue Reading

Join eBiz Answers at the UKOUG Financials SIG

Thursday 25th February, Prospero House, London.

Join Andrew Bohnet, Senior Director at eBiz Answers as he presents ‘Find the issue before it’s a problem – using eBTax Analytics’ at this months UKOUG SIG Financials meeting. Continue Reading

Register for Oracle Tax Management SIG webinars

eBiz Answers are pleased to announce that three members of the eBiz team, Andrew Bohnet, Alastair Doe & Hugo Mireles, will be joining forces with the OAUG – Oracle Tax Management SIG to present a series of webinars to discuss and demonstrate some of the setup issues surrounding Oracle eBTax and Fusion Tax.

Starting at 09.00am (PST) on Monday the 8th of February the Tax Management SIG will host a total of 9 webinars over a two week period, with sessions focusing on examples from a Financials perspective as well as providing technical and functional users with an overview of functions and features.

Webinar Agenda:

Basics of eBTax Setup: Regime to Rate Flow
09.00 -10.00am PST – Monday 8th February 2016
Presented By: Dev Singh, Manager, Tax-Process & Technology at KPMG

Basics of eBTax Setup: Conditions and Rules
09.00 -10.00am PST – Tuesday 9th February 2016
Presented By: Alastair Doe, Senior Principle Consultant R12 eBTax eBiz Answers

Basics of eBTax Setup: The Other Bits – Tax Reporting Codes, Tax Zones, Tax Formulas, Reverse Charge
09.00 -10.00am PST – Wednesday 10th February 2016
Presented By: Alastair Doe, Senior Principle Consultant R12 eBTax, eBiz Answers Continue Reading

Oracle eBTax: Warning – your PO Line Type

From a tax perspective, the line type is critical yet in the majority of cases is overlooked and issues arise. Why?

The line type allows you to either have Quatity or an Amount based but often it is set as Goods by amount or Service by Quantity. The issue is that anything that is Amount based will always have a product type of SERVICE and anything with Quantity based will always have a Product Type of GOODS. This will severely affect your tax determination and compliance if you are not careful.

How to get around the ‘Unable to retrieve content. Additional Information for Remote Region error #6’

During Fusion tax setups, if you come across this error ‘Unable to retrieve content. Additional Information for Remote Region error #6’ when searching for tax rules then the following video should help you out.

 

Oracle R12: Country localization requirements for Tax

This blog posting is to put together all the localisations that are required to complete eBTax setups for certain countries and the areas to look out for. Please post your comments so we can get this completed.

 

This is a work in progress document.

Continue Reading

R12:How to modify/override Recovery Rate in Invoice Workbench (Doc ID 1588011.1)

We recently tried to apply the process to allow for ad-hoc changes to recovery rates and recovery percentages after the recovery tax had been determined. The Oracle note is ‘R12:How to modify/override Recovery Rate in Invoice Workbench (Doc ID 1588011.1)’ and its almost comical in its approach, click here, do that, count to 10, spin around ten times, touch your toes and then click here again. Ok so its not quite as bad as that but not far off.

We have a client who enters invoices for Danish car leasing which usually commands a 50% recovery rate but instead of outlining the exact amount of recovery tax by line, the supplier have an annoying habit of just saying heres the total VAT and here is your recovery tax without linking the two. We desperately wanted to use the ability to change the amount of recovery tax and whilst we were able to change the recovery tax, the percentage was not possible.

The point of this article however is not a ‘how to’ guide but instead to let you know to approach with caution the Oracle note 1588011.1 and in our opinion use a workaround instead where you split the line amount to accommodate this requirement.