Triangulation tax in Oracle R12 eBTax and Oracle Fusion Tax

There is often a look of distress on someone’s face when you want to discuss triangulation tax for indirect taxation but it’s not difficult to grasp the basic concepts. There is a slight difference between triangulation in its ‘legal’ terms compared to setting up a triangulation tax rate in an Oracle ERP system with the rules to go with it. Technically, triangulation is considered as a zero rate tax but in Oracle we want to give it a unique name, something like EU sales triangulation in order for us to clearly see the tax on the invoice and easily identify it on the reports.

Triangulation is used to describe the process when more than two entities are involved in the supply of goods that cross international borders. The ‘ABC’ flow of transactions will involve three different parties where goods are shipped directly from party A to party C but party B is the selling organisation and never physically receives the goods or handles them during the shipping process.

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