Setup/configuration considerations

Gulf States (GCC), India, Anguilla – fix price your Oracle VAT/GST solution now

The world is changing and more tax needs to be generated. For this reason, there are several new countries that are introducing VAT or GST in the next couple of years.

The countries listed below are all adopting VAT or GST;

  • Saudi Arabia
  • Kuwait
  • Bahrain
  • Oman
  • Qatar
  • UAE
  • India
  • Anguilla

As the leading experts for Oracle Indirect Tax configuration, we are in the best position to offer you a fully automated solution for all of these countries and whats more, we are fix pricing the cost of this solution now before we know how complex the requirements will be, thats how confident we are at being able to deliver.

 

So Oracle R12 or Oracle Cloud (Fusion), get in touch to find out more.

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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Oracle ebusiness tax – when to use a tax jurisdiction

Linking a tax jurisdiction to a tax rate.

Whether its R12 eTax, eBTax or Oracle Cloud (Fusion) Tax, with Oracle eBusiness Suite, every Tax created under a Tax Regime needs a ‘Tax Jurisdiction’ if it wants to be enabled for transactions. Under the Oracle tax engine, a tax jurisdiction only applies to certain types of taxes.

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Oracle Cloud Tax updated for Release 11

Fusion Tax Release 11 Updates

Below is a high level overview of the new functionality available for the Oracle Cloud tax engine. As you can see, there are quite a few changes.

Estimated Tax on Sales Order now possible.

Create a rule using tax determinant which includes transaction business category = Sales Transaction

Create a UD.

Enhanced Rapid Implementation Spreadsheets:

Data related to tax rules moved from tax config workbook to tax implementation workbook.

The following worksheets are new in the implementation workbook:

  • Tax Exemptions: Create tax exemption configuration for third parties and third-party sites.
  • Party Classifications: Associate party fiscal classifications with the parties.
  • Tax Reporting Codes: Create tax reporting codes and tax reporting types for downstream use in tax reports.
  • Tax Payer Identifiers: Define specific taxpayer identifiers for third parties and third-party sites for purposes of reporting.
  • Product Fiscal Classifications: Create product fiscal classifications for subsequent use in tax rules having a product inventory linked determining factor class.
  • Tax Rules: Define rules that look for a result for a specific tax determination process, such as determining place of supply or tax registration, in relation to a tax on a transaction.

Tax registrations have moved out of party tax profiles task. Now have their own task lists of:

  • Manage Tax Registrations: Use this task to create or edit details related to Tax Registrations, Withholding Tax Registrations, and Taxpayer Identifiers.
  • Manage Tax Exemptions: Use this task to create or edit details related to Tax Exemptions and Withholding Tax Exemptions.

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Oracle – VAT applicability between a parent company and a permanent establishment in Italy

Really this can apply to any EU country and comes under the tax engine rules for Same VAT Group and can apply to any VAT or GST based tax regime.

In reference to the original article by the TMF group on VAT in Italy between a parent company and its child, I thought that i would try and explain this in terms of setting up the tax in Oracle R12 eBTax or Oracle Cloud Tax.

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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.

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Oracle R12 – SQL to delete unwanted tax rates and tax statuses

How to delete tax rates and statuses from the back end

Here is the thing, you have just set up a country in eBTax, the full regime to rate then realised you need to change the naming convention but have all these rates and statuses in the system. Rates can be deleted but statuses cannot be so whlst there won’t be any logical issues, having old data int eh system is not great from a cosmetic point of view. So, a simple way of clearing out old statuses and rates is to do the following.

Step 1.

End date all the statuses that you no longer need

Step 2.

run the following scripts, putting in the Tax Regime where you have made the changes. Make sure you run them in this order.

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Oracle Fusion Tax: “You must enter a value in the Result attribute” issue in spreadsheet upload

If you get the following issue

“You must enter a value in the Result attribute” then have a look at the data you are loading. If your condition is names “bill form uk, bill to us” then there is an issue. The spreadsheet is a CSV file, so having a comma in the name of the condition causes it to fail! so, if you are using spreadsheet uploads in oracle fusion – don’t use commas!

Oracle Fusion Tax: Tax Registration Options

Tax Registration Options

Every legal entity needs to have its reporting registration options set, just like with Oracle R12.

Option

Description

Impact

Tax Regime

Enter the tax regime for this registration. This is a mandatory value in order to set up your Tax Registration. We also advise that you set a separate Tax Regime for each tax registration number you may have.

If you are using duplicate registration numbers then you need to set the Tax too, however, leave this blank if you don’t care about duplicate tax registration numbers.

The tax regime and optionally and tax are used to determine the correct tax registration at transaction and reporting time.

Registration Type

If applicable, select a classification of the tax registration. Its not mandatory but always a good idea to put one in in case a seeded report requires this information now or in the future.

The predefined tax registration types are specified by the tax authority. The tax registration types are for reporting purposes only.

Registration Number

Enter the company tax registration number assigned by the tax authority – So go ask your tax department for this number. This is the tax number, not the company number!

If you set the tax regime option to use the legal registration number as the tax registration number, then select the registration number from the legal registration numbers in the list of values.

If you set the Allow duplicate tax registration numbers option for the tax, then multiple parties and party sites can use the same tax registration number for this tax.

Oracle Fusion Tax validates the number according to tax authority validation rules, if the validation exists for that country. This means that you need to get the format correct or it may not be accepted, so remove spaces or dashes if needed.

Registration Status

Enter the party’s tax registration status. Oracle Fusion Tax provides these predefined registration statuses:

  • Agent: The party acts as a withholding agent for the tax authority for the applicable tax.

  • Registered: The party is registered for the applicable tax.

  • Not registered: The party is not registered for the applicable tax.

  • XX 123456789 Same VAT Group (eBiz Answers Setup)

Use the tax registration status as a determining factor in tax rules. This values can be added to and used in tax rules

Source

Identify if this party is:

  • Explicit: The party is registered with the local tax authority and has a tax registration number. In this case, you know that the party is registered and the details including the tax registration number.

  • Implicit: The party is not formally registered with the tax authority, but the party is considered to meet one or more requirements for reporting taxes because of the level of business conducted. In this case, you determine that the party is registered but you do not know the tax registration number.

If the source is Explicit the tax registration number is required. If the source is Implicit the tax registration number is not required.

Rounding Rule

The rule that defines how the rounding should be performed on a value involved in a taxable transaction. For example, up to the next highest value, down to the next lowest value, or nearest. We also suggest that you set the rounding rules at the regime level and do not allow rounding override.

At transaction time, the values set at the tax registration level override the values set at the party tax profile level.

Set as self-assessment (reverse charge)

Set to automatically self-assess taxes on procure-to-pay transactions. A self-assessed tax is a tax calculated and remitted for a transaction, where tax was not levied by the supplier but is deemed as due and therefore, needs to be paid by the purchaser. If you set your solution up correctly then we suggest you set this to yes by default even if you don’t currently use Self-Assement!

You can set the self-assessment option at the tax profile level to default to the tax registrations that you create for this party. You can also set it at the tax registration level or on an individual tax line.

Oracle Fusion Tax applies self-assessment to Payable invoices received by the first party according to the tax registration setting. The specific tax registration record is derived either from the Determine Tax Registration rules or from the default tax registration.

Set Invoice Values as Tax Inclusive

Our recommendation is not to use this but if you select this because your party intends to send or receive invoices with invoice line amount inclusive of the tax amount you can use this option or for better control, use rules.

At transaction time, the values set at the tax registration level override the values set at the party tax profile level. In addition, this option at the tax registration level overrides the tax inclusive handling setting at the tax level, but not at the tax rate level.

Collecting Tax Authorityand Reporting Tax Authority

Enter the name of the tax authorities for:

  • Collecting Tax Authority: The tax authority responsible for managing the administration of tax remittances.

  • Reporting Tax Authority: The tax authority responsible for receiving and processing all company transaction tax reports.

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 Tax – Multiple Legal Entities one OU.

Do you need SLA to determine the tax?

Short Answer is yes!

For a further details please read our previous post:-

Oracle R12 – The problem with using legal entities for Tax

Oracle eBTax – End Dated your tax regime and need to reactivate it?

How to remove the end date from a tax regime

Ever accidentally end dated a tax regime in Oracle R12 and then needed to activate the tax regime again? Oracle wont let you – unless of course you follow this trick.

First, query back the end dated Oracle tax regime.

Oracle tax regime 1

You can see that the ‘effective to’ date is set as ’01-01-2000′.

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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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