Oracle R12 – Using percentage in the tax rate
My second question ( more a point to note) was related to a point you made in the UKOUG Financials SIG in Manchester.
I think you mentioned that it is better to put the tax rate value in the Name of the Status Code. That is define the Tax Status code as ‘Standard 20’, instead of ’Standard’.
Our experience was quite the opposite. We had defined Tax Statuses with the rate in the name initially. That is we had defined ‘Standard 15’, Standard 17.5’etc. When the VAT Rate changed from 17.5% to 20%, We had quite a cumbersome task to create a new Tax Status and change all the Tax rules to now use the new Tax Status ‘Standard’. If the VAT Rate changes now again ( to say 22.5%, looking at the way UK Debt is not getting tamed), we will just have to end date the existing Tax Rate under the ‘Standard’ Tax code and enter a new row, with the new rate. No changes to Tax rules required. It seems a far neater way to do it.
I think you mentioned something about the tax reports not displaying the tax rate as the reason for your suggestion. I think if the E-Biz Tax Reports are not displaying the Tax rate, the reports need to be modified or customised. They are so difficult to use that most of our Business Users are not using the reports anyway.
It will be interesting to see what other E-Biz Tax Users experience is on this.
ok, never put the rate % in the tax status as this cannot be changed nor can you delete a status. I suggest putting it in the tax rate name only. The reason for this is that when the rate changes, you can easily create a new tax rate with the new % and then simply change the default date on the rate so it knows the correct date when it should be used. This means that with the old tax rate, you don’t actually end date it – only put an end date to the default date. There is one major driving factor for this and that is for Credit memos in AR. If you use the Oracle suggested method of simply end dating the tax rate and entering a new line with the new rate then to do this you have to end date the first rate. By doing this, it is now impossible to chose this rate after the end date. So when you need to create a credit memo for an invoice that had the old rate – you can’t! However, if you add a completely new rate but simply change the default date then you can manually choose the old tax rate.
It also helps with reporting. So whilst you have not done it now, you can in the future.