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Oracle E-Business Tax

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Oracle E-Business Tax

Overview:
•    Oracle E-business tax is a new product in R12.
•    It provides the infrastructure for transaction tax knowledge management and delivery using a global system architecture that is configurable and scalable for adding country-specific tax content.


•    It is a single point solution for managing transaction-based tax.
•    Uniformly delivers tax services to all E-Business Suite business flows through one application interface.
•    It Consists of a tax knowledge base, a variety of tax services that respond to specific Tax events, a set of repositories (for tax content and tax recording) that  allows customers to manage their local tax compliance needs in a proactive  manner, as well as the ability to integrate with external tax content providers  through a single integration point.

Features:Oracle E-Business Tax
Features of E-Business Tax include:
•    Date affectivity on your tax configuration.
•    Tax simulator which enables you to test your tax configuration.
•    Classify your tax exceptions:
– Item.
– Intended use.
– Place of supply.
•    Look for commonalities:
– Define a classification rule to apply to many suppliers.
– Define a classification rule to apply to many suppliers.
E-Business Tax Benefits:
•    Migration to Release 12 from Release 11i.
•    Minimize the need for detailed regional tax knowledge.
•    Simplified setup.
•    Minimize the risk associated with tax compliance.
•    Automatic tax handling for:
– Sales and use tax
– Compound tax and surcharges.
– Deferred tax.
– Multiple tax registrations.
E-Business Tax Setup Steps:

E-Business tax Setup Steps
Tax Authority
“A government entity that regulates tax law, administers, or audits one or more taxes”.

Tax Regime
“The set of tax regulations that determine the treatment of one or more taxes administered by a tax authority”
Examples of a tax regime include:
•    A sales and use tax in the United States includes rules for state, county, and city sales and use taxes.
•    An excise tax regime in India includes rules for excise tax and additional excise tax.
•    A VAT tax regime in Argentina includes rules for standard VAT, additional VAT, and perception VAT.

Tax
“A distinct charge imposed through a fiscal or tax authority”
Examples of a tax include VAT for the United Kingdom and TVA for France.

Tax Jurisdiction
“A geographical area where a tax is levied by a specific tax authority or where a specific tax rate applies”
Examples of tax jurisdictions include:
•    The tax jurisdiction for VAT in Germany is the country of Germany.
•    The tax jurisdiction for a San Jose city tax is the City of San Jose, California.
•    The tax jurisdiction for Provincial Goods and Services tax (PST) in Canada is a particular Province, such as Ontario or British Columbia.

Tax Status
“The taxable nature of a product or service in the context of a transaction for a tax type”
Examples of a tax status include taxable standard rate, zero rated, exempt, and non-taxable. A tax status is similar to the concept of the tax type definition used within Payables and receivables in releases prior to Release12.

Tax Rate
“The rate specified for a tax status in effect for a period of time. You can express the tax rate as a percentage or as a value per unit quantity”
An example of a tax rate is 7.5% for a state sales and use tax.

Recovery Rate
The rate of input tax that is allowed to be recovered or offset against output tax. The recovery rate is applicable to VAT taxes. For example, organizations that only produce VAT applicable goods and services can use 100% recovery rate on most purchases.
Organizations that produce VAT exempt goods and services, for example, financial institutions, have a 0% recovery rate.

Operating Unit Tax Accounts
The tax accounts that the system uses to post the tax amounts derived from your transactions.
The tax accounts you define serve as default accounting information for taxes, tax rates, tax jurisdictions, and tax recovery rates.

Naveed

// A new product in R12and a single point solution for managing transaction-based tax.
This article includes of the Features, Benefits and a comprehensive setup steps details of E-Business tax. //

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