Oracle Modules

Adding Real Time Analytics to your Tax Department’s Indirect Tax Toolkit

eBiz Answers have recently added Real Time Tax Analytics to their indirect tax toolkit,  the application has designed specifically with the tax department in mind.   Real Time analytics is a user friendly web application which will inform the tax department of a transaction with a potential tax issue within seconds of it being entered.   This allows the tax department to identify and correct issues at source and empowering the tax department to be involved in the end to end process.

The ever increasing use of technology by Tax Authorities for tax compliance is directly impacting the inner workings of the tax department.     The VAT landscape is changing rapidly across the globe as Tax Authorities introduce technology to crackdown on tax avoidance and ensure corporate tax transparency.    From South American to Europe,  tax authorities are passing regulation to ensure companies provide accounting data in a standardised format, direct from their ERP applications on a monthly basis.  The tax authorities can then check the file, validate the data and ensure compliance.   Poland has introduced electronic filing with SAF-T files from the 1st July to join Portugal, Luxembourg, Austria and Lithuania who are already using the SAF-T filing format.

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To Global or Not to Global, that is the question – Oracle Configuration Owner

There should only be one choice

We would never set up a tax solution using anything other than the Global Configuration Owner, so why are so many companies configuring their oracle ebusiness tax engine with it set to be party specific? By that I mean when setting tax rates and rules up then linking them directly to an operating unit.

So why do people set them up this way? Well the short answer is because they don’t know what they are doing. That statement maybe a little harsh so let me justify it.

What is the Tax Configuration Owner?

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How to Transfer Invoice Tax Variances in Average Costing Organization

Oracle Payables will calculate Invoice Tax Variances when there is a non-recoverable tax that has been calculated at AP invoice entry that was not included on the Purchase Order.    In an average costing organization this tax variance should be transferred to the inventory valuation to ensure that the correct item cost is calculated.     Please see attached video for a demonstration of this functionality in Oracle R12.

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.

Fusion Tax – Run Maintain Geography Name Referencing

In R12, this was a nice simple process, a solution that has been refined over the years to a stable and great solution. Fusion on the other hand still has a few teething issues as you would expect with any new release of software.

In R12, when running the same process, you had a drop down list of values so you could choose the table name. No such luck with Fusion tax at the moment (maybe fixed in future release), you need to know the table names and manually type them in, any mistakes and your request will fail.

This is the parameters:

Fusion TaxThat’s it nothing else to help you!

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No Ship to on intercompany invoices – solution

This posting is a direct copy from the Oracle website based on note 1048431.6

For years we have been using a work around but Oracle have now provided the following solution to help with the missing ship-to information badly needed to correctly determine the tax.

Reference INCIAR – Ship-To/Shipto Address Does Not Appear On Intercompany AR Invoices (INCIAR) (Doc ID 1048431.6)

GOAL

The “ship to” address is not appearing on intercompany AR invoices.

The “ship to” address for Intercompany AR Invoices is not populated after the AR Autoinvoice process is completed.

This document includes all version of Oracle E-Business Suite 11i and Release 12.

SOLUTION

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Oracle R12 – US Tax Geography Validations

This post has been put together to demonstrate how you can correctly set-up your ‘Trading Community Architecture’ (TCA) for the United States in Oracle R12.
Step 1.

Navigate to the Trading Community Manager responsibility.
TCA > Administration > Geography Hierarchy

Then, search for ‘United States’ and then click on ‘Manage Validations’.

Oracle R12 - Manage Validations for TCA - Geography Hierarchy

Step 2.

HZ_LOCATIONS
HZ Locations will already be available but won’t have been correctly assigned. Set the values as shown below. HZ_Locations are your suppliers and customers.

Oracle R12 - Correctly Assign HZ_Locations
Step 3.

HR_LOCATIONS_ALL
HR Locations will need to be added as it is not seeded. Set the values as shown below. HR_Locations are your own locations.

Add your own HR Locations
Step 4.

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Oracle R12 – US Geography data clean up

This is not an approved Oracle approach but if you need to clean up bad data from an 11i upgrade where you have all sorts of States, Counties or Cities then the flowing SQL could help you.

 

DELETE

hz_relationships

where subject_id IN (

select geography_id

from hz_geographies where created_by_module = ‘EBTAX_MIGRATION’

)

and subject_table_name = ‘HZ_GEOGRAPHIES’

;

 

DELETE

hz_relationships

where object_id IN (

select geography_id

from hz_geographies where created_by_module = ‘EBTAX_MIGRATION’

)

and object_table_name = ‘HZ_GEOGRAPHIES’

;

 

The last step must be the delete of the HZ_GEOGRAPHIES as it is used in the queries above

 

DELETE hz_geographies where created_by_module = ‘EBTAX_MIGRATION’

;

Oracle R12: The problem with using Legal Entities for Tax!

So, here is my problem. We have a client who has a UK legal entity but has several locations globally that are registered for local indirect tax and some other reporting but are not legal entities in their own right. According to Oracle, these are legal entity Establishments.

Oracle Definition of Legal Entity Establishment

“Legal Establishment: First party legal entities identify your organization to the relevant legal authorities, for example, a national or international headquarters. First party legal establishments identify each office, service center, warehouse and any other location within the organization that has a tax requirement. When you create a legal entity, the system automatically creates a legal entity establishment. You can create additional legal establishments according to your needs. For each legal establishment there are one or more tax registrations, depending upon the tax requirements of the applicable tax authority.”

More can be found at note 1064366.1

So what is wrong?

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Oracle R12 – Withholding Tax on Receivables (AR) Transactions

This article explains how in Oracle R12, you can create an invoice that has the correct total amount but with the lines adjusted down in accordance with the potential to automatically adjust the AR transaction to record the withholding tax.

To do this you will need to create a separate tax regime which takes a % based on the compounded GB VAT tax rate, as shown below.

Oracle R12 Withholding Tax for AR

 

 

 

 

 

 

In the example above you will see the original line amount was for 1000 but had 20% tax applied to it. By withholding 20% of the total invoice you would get 240, meaning that the original line amount of 1000 is now actually only 760.

By modifying the auto-accounting rules you can set the withholding tax line to be the same as the revenue account. In the example below you can see that 1. Is the original tax line and 2. Is the withholding tax line.

Oracle R12 Withholding Tax for AR

 

 

 

 

 

 

 

Whilst withholding tax is only applied to the AP transaction, it is often required to show what amount of withholding tax is required on the AR invoice that is sent to the customer. With a modification to the way the invoice is formatted, it is possible to automate the creation of the withholding tax line on the AR transaction without actually effecting any of the normal tax calculation.

 

 

Oracle R12 eTax: APP-SQLAP-97733 tax distribution error

If you get the following error when trying to look at distributions or validate your AP invoice, then this is caused by a currency issue.

ZX_GENERIC_TEXT

invoice validation issue

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Oracle R12 How to change a paid invoice when you need to make a tax corrections

Changing the tax rate or recovery rate on a paid invoice

First you need to make sure you know the policy of adjusting a paid invoice as many companies do not want to allow this option and by default it should certainly be set to NO. However, we have found that when a user applied the wrong tax code to a transaction and a correction is needed, it is far easier, cleaner and more accurate to change that invoice even if it has been paid.

Changing the original transaction instead of applying a credit note and reentering the invoice has many more benefits. Firstly, the time taken is much less than having to create a credit memo and a new invoice, both of which then have to be paid. Continue Reading

Oracle R12 – ‘Low-Level Diagnostics Logging is turned on’ – how to turn off

If you get the following message when logging on to the Tax Manager Responsibility;
“Low-level Diagnostic Logging is turned on. This may temporarily reduce performance”

lo-level-diagnostics

Oracle R12 Tax Manager Responsibility FND Diagnostics

Oracle R12 Tax Manager Responsibility FND Diagnostics

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Oracle Fusion Tax – the death of GL tax

Oracle are continuing their efforts to improve and simplify the tax module.

In R12 eBTax, the ability to enter tax on the GL line was possible but was 100% manual with no ability for rules to kick in. It also posed a risk because if the user did not flow the correct path, they could accidentally enter a journal line against a tax account but the system wold not have recognised it as a tax entry and this would cause issues with tax reporting.

So, Oracle development have stopped the ability to use assign tax rates at the GL level!

Instead, they have added new functionality, a new process which works much the same way as an ADI excel spreadsheet. You enter your journal lines in the spread sheets but can add additional information that would influence the tax determination. You then have the ability to generate the tax that then creates the tax journal lines which can then be uploaded into our GL. The main difference here is that Oracle now stores all the tax information in the common tax repository just like any AP or AR transaction and the link to the journal line in therefore maintained.

This solution ensures a much better tax capture in GL that actually allows rules and therefore reduces the risk of tax setup.

Oracle R12 eBTax, Upload your GL account codes to tax rates from excel!

As part of our eBtax Rapid Install™ solution, (https://ebizanswers.net/ebtax-downloads/Oracle-eBTax-11i-to-r12-Upgrade-Rapid-Install.pdf
We have managed to create a way of uploading all the tax rate GL codes directly form Microsoft Excel into Oracle so that all your rates get updated.

The quickest time to update a tax account manually either for a tax rate or a tax recvery rate is 30 seconds. We can load 7000 records in 10 seconds!

we can even prepare te file remotely for you to load in

contact us if you want further information enquiries@ebizanswers.net

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