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Oracle E-Business Tax Implementation Guide
Release 12.1
Part Number E13629-03
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Setting Up Applications for Oracle E-Business Tax

Implementation Checklist for Oracle E-Business Tax

This table provides a checklist of the mandatory and optional implementation steps in other applications for E-Business Tax. Some optional implementation steps may be conditionally mandatory, depending on your overall setup.

Note: You must have access to the system administrator responsibility to perform many of these tasks.

Step Number Step Description Mandatory/Optional
1 Setting Up Tax Users Optional
2 Setting Profile Option Values Optional
3 Setting Up Lookup Codes Optional
4 Setting Up TCA Geography Hierarchy Optional
5 Setting Up Legal Entity Mandatory
6 Setting Up Operating Units Mandatory
7 Setting Up Accounts and Accounting Information Mandatory
8 Setting Up TCA Classifications Optional
9 Setting Up Oracle Inventory Optional

Setting Up Tax Users

Set up your tax users and assign each user a tax-related responsibility. Oracle E-Business Tax provides these seeded responsibilities:

You can also set up new E-Business Tax menus and responsibilities according to your requirements.

Related Topics

Responsibilities Window, Oracle Applications System Administrator's Guide – Security

Users Window, Oracle Applications System Administrator's Guide – Security

Menus Window, Oracle Applications System Administrator's Guide – Security

Data Access Sets, Oracle General Ledger Implementation Guide

Setting Profile Option Values

Set values for E-Business Tax profile options to control the availability of certain tax options and to maintain your Vertex or Taxware installation.

The table in this section summarizes E-Business Tax profile option information:

The key for this table is:

Profile Option Default User Access System Administration: Site System Administration: Application System Administration: Responsibility System Administration: User
eBTax: Allow Ad Hoc Tax Changes Yes No Access Update Update Update No Access
eBTax: Allow Manual Tax Lines Yes No Access Update Update Update No Access
eBTax: Allow Override of Customer Exemptions Yes No Access Update Update Update No Access
eBTax: Allow Override of Tax Classification Code Yes No Access Update Update Update No Access
eBTax: Allow Override of Tax Recovery Rate No Default No Access Update Update Update No Access
eBTax: Inventory Item for Freight Freight Charge No Access Update Update Update No Access
eBTax: Invoice Freight as Revenue No No Access Update Update Update No Access
eBTax: Read/Write Access to GCO Data Yes No Access Update Update Update No Access
eBTax Taxware: Service Indicator Non-Service View Only Update No Access No Access No Access
eBTax Taxware: Tax Selection Jurisdiction and Tax View Only Update No Access No Access No Access
eBTax Taxware: Use Nexpro No No Access Update No Access No Access No Access
eBTax Vertex: Case Sensitive Yes View Only Update No Access No Access No Access

eBTax: Allow Ad Hoc Tax Changes

The eBTax: Allow Ad Hoc Tax Changes profile option controls which users can make ad hoc tax changes on the transaction line, such as selecting a different tax status or tax rate. The changes that a user can make also depend upon the details of the applicable tax setups.

If the tax rate associated with a tax has the Allow Ad Hoc Rate option enabled, then users can override the calculated tax rate on the transaction line.

See: Setting Up Tax Rates, Oracle E-Business Tax User Guide for more information.

eBTax: Allow Manual Tax Lines

The eBTax: Allow Manual Tax Lines profile option controls which users can enter manual tax lines on the transaction for the tax setups that allow this update.

If the tax configuration has the related options enabled, then users can enter manual tax lines on the transaction for the applicable tax.

The related tax setups are:

eBTax: Allow Override of Customer Exemptions

The eBTax: Allow Override of Customer Exemptions profile option controls the display of the Tax Handling field on the transaction line. You use the Tax Handling field to apply and update customer tax exemptions to transactions.

If you set the eBTax: Allow Override of Customer Exemptions profile option to Yes, you must also complete the related setups for tax exemptions.

eBTax: Allow Override of Tax Classification Code

The eBTax: Allow Override of Tax Classification Code profile option controls whether users can update the tax classification code that is defaulted to the transaction line.

E-Business Tax defaults the tax classification code to the transaction line according to the defaulting hierarchy defined for the operating unit and application. See: Using Application Tax Options, Oracle E-Business Tax User Guide for more information.

eBTax: Allow Override of Tax Recovery Rate

The eBTax: Allow Override of Tax Recovery Rate profile option controls which users can enter or update the calculated tax recovery rates on the transaction for the tax recovery rate setups that allow this update.

If the tax recovery rate associated with a tax has the Allow Ad Hoc Rate option enabled, then users can override the calculated tax recovery rate on the transaction.

The meaning of ad hoc entry of tax recovery rates differs according to the source application for the transaction:

See: Setting Up Tax Recovery Rates, Oracle E-Business Tax User Guide for more information.

eBTax: Inventory Item for Freight (Oracle Order Management only)

The eBTax: Inventory Item for Freight profile option lets Order Management use an Inventory item defined as Freight on Receivables transaction lines. You can use the freight Inventory item to control the tax rate on taxable freight amounts.

The values for this profile option are:

You must also set the eBTax: Invoice Freight as Revenue profile option to Yes.

Note: You may also need to set the OE: Item Validation Organization profile option.

eBTax: Invoice Freight as Revenue (Oracle Order Management only)

The eBTax: Invoice Freight as Revenue profile option controls whether to consider freight amounts as taxable line items.

Set the eBTax: Invoice Freight as Revenue profile option to Yes, if you are required to tax freight amounts. The freight amounts entered in the Order Management Ship Confirm window are then passed to Receivables transactions as taxable line items.

If you set the eBTax: Invoice Freight as Revenue profile option to Yes, you must also set the eBTax: Inventory Item for Freight profile option.

eBTax: Read/Write Access to GCO Data

The eBTax: Read/Write Access to GCO Data profile option controls whether users can set up tax configuration data for the global configuration owner.

If you set the eBTax: Read/Write Access to GCO Data profile option to Yes, then the applicable users can set up taxes and related configuration data for the global configuration owner. Legal entities and operating units can then share the global configuration owner tax setups.

See: Configuration Options in Oracle E-Business Tax, Oracle E-Business Tax User Guide for more information.

eBTax Taxware: Service Indicator

The eBTax Taxware: Service Indicator profile option indicates whether taxes are calculated on service or a rental transactions.

The Taxware API parameter that accepts this profile option value is JurLink.ServInd.

The values for this profile option are:

eBTax Taxware: Tax Selection

The eBTax Taxware: Tax Selection profile option indicates whether Taxware uses jurisdiction-level jurisdiction codes to calculate taxes.

The Taxware API parameter that accepts this value is TaxSelParm of Taxfn_Tax010.

The values for this profile option are:

eBTax Taxware: Use Nexpro

The eBTax Taxware: Use Nexpro profile option indicates whether Taxware uses the Nexpro functionality. If you enable this option, additional configuration is required on the Taxware side of the integration to achieve nexus-based taxation.

The Taxware API parameter that accepts this value is TaxLink.UseNexproInd.

See: Technical Reference, Oracle E-Business Tax: Vertex Q-Series and Taxware Sales/Use Tax System Implementation Guide for information about the Nexpro functionality.

eBTax Vertex: Case Sensitive

the eBTax Vertex: Case Sensitive profile option enables case-sensitive searches of Vertex tax calculation data. The default value is Yes.

Set this profile option if you intend to use Vertex to calculate tax on transactions.

Setting Up Lookup Codes

Use the Application Object Library Lookups window to maintain existing lookup codes and define additional lookup codes for E-Business Tax lookup types.

Note: E-Business Tax does not perform validation on updated or disabled lookups. If you want to disable, update, or apply an end date to an E-Business Tax lookup type, please ensure that the applicable values are not in use in the E-Business Tax setup.

ZX_INPUT_CLASSIFICATIONS and ZX_OUTPUT_CLASSIFICATIONS

Use the ZX_INPUT_CLASSIFICATIONS and ZX_OUTPUT_CLASSIFICATIONS lookup types to create tax classification codes for use in tax determination.

Release 11i tax codes and tax groups migrate to E-Business Tax as tax classification codes. Payables and Purchasing tax codes migrate as tax classification codes under ZX_INPUT_CLASSIFICATIONS. Receivables and Projects tax codes migrate as tax classification codes under ZX_OUTPUT_CLASSIFICATIONS. You can set up additional tax classification codes for use with a migrated tax data model or as an additional determining factor in tax determination.

ZX_WEB_EXP_TAX_CLASSIFICATIONS

Use the ZX_WEB_EXP_TAX_CLASSIFICATIONS lookup type to create tax classification codes for use in tax determination for transactions originating from Internet Expenses.

ZX_EXEMPTION_REASON_CODE

Use the ZX_EXEMPTION_REASON_CODE lookup to create exemption reason lookup code for use in tax exemptions. The exemption reason is a user-defined code that lets you monitor the use of customer or product tax exemptions issued by the tax authority and applied to specific transactions.

When you set up a tax exemption, you can use the exemption reason to identify the reason for this exemption or to monitor a customer's application for an exemption. At transaction time, E-Business Tax only considers certain tax exemptions if the exemption reason and certificate number entered on the transaction line match the exemption definition.

ZX_JEBE_VAT_TRANS_TYPE

Use the ZX_JEBE_VAT_TRANS_TYPE lookup type to create tax transaction types for use with tax rate codes. You use transaction types when you set up a tax rate.

Tax rate transaction types represent local tax authority codes both for reporting purposes and for controlling which rates appear on an invoice. See: Setting Up Tax Rates, Oracle E-Business Tax User Guide for more information.

ZX_REGISTRATIONS_REASON

Use the ZX_REGISTRATIONS_REASON lookup type to create tax registration reason codes. You use registration reason codes when you set up a tax registration to represent the reason for the tax registration.

The tax registration reason code is for tax reporting purposes only. See: Setting Up a Tax Registration, Oracle E-Business Tax User Guide for more information.

ZX_REGISTRATIONS_TYPE

Use the ZX_REGISTRATIONS_TYPE lookup type to create tax registration type codes. You use tax registration type codes when you set up a tax registration to organize your tax registrations into categories.

E-Business Tax provides these seeded tax registration types: CNPJ; CPF; CUIL; CUIT; DNI; NIT; OTHERS; VAT. The tax registration types CPF, CNPJ, and OTHERS are used in tax registration number validation for Brazil. All other seeded tax registration types, and the tax registration types that you define, are for tax reporting purposes only.

See: Setting Up a Tax Registration, Oracle E-Business Tax User Guide for more information.

ZX_REGISTRATION_STATUS

Use the ZX_REGISTRATION_STATUS lookup type to create tax registration status codes. You use tax registration status codes as determining factors in tax rules.

E-Business Tax provides these seeded tax registration types:

Lookup Code Description
Agent The company acts as a withholding agent for the tax authority for the applicable tax.
Registered The company is registered for the applicable tax.
Not Registered The company is not registered for the applicable tax.

See: Setting Up Tax Rules, Oracle E-Business Tax User Guide for more information.

ZX_TAX_TYPE_CATEGORY

Use the ZX_TAX_TYPE_CATEGORY lookup type to create tax types. You use tax types when you set up a tax.

You can use tax types to classifies taxes for tax reporting purposes. See: Setting Up Taxes, Oracle E-Business Tax User Guide for more information.

The ZX_TAX_TYPE_CATEGORY lookup type contained these seeded tax types:

Lookup Code Description
Sales Direct taxes that are collected from the consumer by the supplier and paid to the tax authority.
VAT Value added or cascading taxes.
Excise Taxes on the production and manufacture of goods.
Customs Duty Taxes charged on imported and exported products.
Environmental Taxes charged as a result of environmental regulations.

Setting Up TCA Geography Hierarchy

Set up and maintain the TCA geography hierarchy for each country where you have a tax requirement. The TCA geography hierarchy provides a single reference source for all geographical and location-based information for all E-Business Suite applications.

You use the TCA geography hierarchy in these cases:

You must set up and maintain the TCA geography hierarchy before you can perform these tax-related setups:

Use TCA administration to maintain these aspects of the geography hierarchy:

Related Topics

Setting Up Real-Time Address Validation, Oracle Trading Community Architecture Administration Guide

Administrating Geography Hierarchy, Oracle Trading Community Architecture Administration Guide

Geography Name Referencing Process, Oracle Trading Community Architecture Administration Guide

Setting Up Legal Entity

Use the Legal Entity Configurator to set up these parties:

When you set up a legal entity or establishment, you can also set up party tax profile details, including general information, rounding rule, and tax registrations. See: Party Tax Profiles in Oracle E-Business Tax, Oracle E-Business Tax User Guide for more information.

If you set up country default controls for the countries where you do business, then the applicable tax regime and tax values default to the legal establishment tax registration record. See: Setting Up Country Default Controls, Oracle E-Business Tax User Guide for more information.

Setting Up Legal Entities

Set up the legal entities that represent your company. You must set up your company as a legal entity before you can perform these tax-related setups:

When you set up legal entities for your company, set the Transacting Entity option to Yes. See: Creating a Legal Entity, Oracle Financials Implementation Guide for more information.

After you set up legal entities, set up the legal establishments that belong to the legal entity.

Setting Up First Party Legal Establishments

Set up a legal establishment record for each office, service center, warehouse and any other location within the company that requires a registration with a tax authority for one or more taxes. You set up legal establishments under a parent legal entity.

When you set up legal establishments, you can also perform these tax-related setups:

Use the Associate Business Entities region to link a tax-related business entity to a legal establishment. See: Creating Establishments, Oracle Financials Implementation Guide for more information.

Setting Up Legal Authorities

Set up a legal authority record for each tax authority that administers taxes in a tax regime where you do business. While not mandatory, you can set up legal authority records before you perform these tax-related setups:

When you set up a legal authority, set the Legislative Category to Transaction Tax. See: Creating and Updating Legal Authorities, Oracle Financials Implementation Guide for more information.

Applying End Dates to Legal Entities

If you apply an end date to a legal entity or legal establishment, you must manually apply the same end date to any related E-Business Tax entities that refer to the legal entity or establishment.

Setting Up Operating Units

Set up the operating units that you need to process your tax transactions. An operating unit is an organization that uses Oracle Cash Management, Order Management and Shipping Execution, Oracle Payables, Oracle Purchasing, or Oracle Receivables.

For tax-related transactions:

You must set up and maintain operating units before you can perform these tax-related setups:

You can set up operating units using Oracle Human Resources, Oracle Inventory, or Oracle General Ledger. The setup of operating units requires a number of prerequisite setups. The number and kind of prerequisite setups depends upon your organization and your tax implementation.

Related Topics

Updating Establishments, Oracle Financials Implementation Guide

Setting Up Accounts and Accounting Information

Set up accounts and accounting information for your tax transactions. You must set up and maintain accounting information before you can set up tax accounts for the applicable operating units. You set up tax accounts by operating unit for taxes, tax rates, tax jurisdictions, tax recovery rates, and tax registrations of first party legal establishments. See: Setting Up Tax Accounts, Oracle E-Business Tax User Guide for more information.

Review and complete these accounting setup tasks according to your requirements:

Related Topics

Setting Up General Ledger, Oracle General Ledger Implementation Guide

Creating Accounting Setups, Oracle Financials Implementation Guide

Setting Up TCA Classifications

Set up TCA classifications to classify third parties for tax purposes. You can define a TCA class category and class codes specifically for use in tax determination. You can also use standard classifications, such as the US Standard Industrial Classification (SIC) codes, and assign these codes a party fiscal classification.

You must set up and maintain TCA classifications before you can perform these tax-related setups:

Use TCA administration to set up and maintain classifications for use in party fiscal classifications:

Related Topics

Classifications Overview, Oracle Trading Community Architecture Administration Guide

Administering Classifications, Oracle Trading Community Architecture Administration Guide

Setting Up Oracle Inventory

Use the Inventory Item Category functionality in Oracle Inventory to model product fiscal classifications. You can create either a single product fiscal classification type or a hierarchy of product fiscal classification types that matches the segments of the Inventory category.

You can either use existing Inventory category sets or set up new Inventory category sets for use with product fiscal classifications. After you set up Inventory item categories and associate them with product fiscal classifications, the corresponding product fiscal classification code defaults to the transaction line for any item that belongs to the inventory category set. See: Setting Up Product Fiscal Classifications, Oracle E-Business Tax User Guide for more information.

You can also specify a default Inventory category set for a given country. The Inventory category associated with the item for this default category set defaults to the transaction line. See: Setting Up Country Default Controls, Oracle E-Business Tax User Guide for more information.

To model Inventory item categories for product fiscal classifications, you create categories and category sets and associate product fiscal classification types to the Inventory item category set.

The Inventory setup tasks to model product fiscal classifications are:

You complete this setup task flow for each Inventory-based product fiscal classification type that you plan to define.

Define Inventory Value Set

Define a value set with the value type that the segments of the item category structure will use. Select a value type for the product fiscal classification codes that you intend to define, for example, alphanumeric code or numeric codes.

Define Inventory Item Category Structure

Define a category structure for the Inventory category set that you will use to create product fiscal classification types. If you are modeling a hierarchical classification system, then create a segment for each level in the hierarchy.

Set subcategory segments as Not Required.

Define Category Set

Define a category set for the category structure that you created. Use a naming convention that corresponds to the product fiscal classification type that you intend to create.

Define Inventory Categories

Define the values for each segment of the category structure. The values represent the product fiscal classification codes.

This is a sample representation of numeric codes for the Brazilian CNAE and NCM product fiscal classification:

Structure Category Description
BR CNAE 3901... Polymers of ethylene, in primary forms
BR CNAE 3901.10.10 Linear polyethylene
BR CNAE 3901.10.90 Other

Associate Inventory Items to Category Sets

Assign one or more Inventory categories belonging to the category set to the Inventory items that you intend to use on transactions.

After you set up an Inventory item category set, use E-Business Tax to set up one or more product fiscal classification types and associate them with the Inventory item category set. If you are setting up a hierarchy of product fiscal classification types, define the starting point and the number of digits that make up each level code value in the hierarchy. See: Setting Up Product Fiscal Classifications, Oracle E-Business Tax User Guide for more information.

Related Topics

Defining Categories, Oracle Inventory User's Guide

Defining Category Sets, Oracle INventory User's Guide