Skip Headers

Oracle E-Business Tax Implementation Guide
Release 12.1
Part Number E13629-03
Go to Table of Contents
Contents
Go to previous page
Previous
Go to next page
Next

Managing Migrated Data

Migrated Tax Data in Oracle E-Business Tax

Oracle E-Business Tax provides a common model for setting up and using existing Release 11i tax data for tax determination and tax calculation. This includes tax data that was originally set up in Payables, Purchasing, Receivables, and Projects.

Note: This chapter discusses background information and user tasks that are required to manage migrated tax data using the E-Business Tax user interface. For a complete discussion of Release 11i data migration, please see the Oracle Applications Upgrade Guide: Release 11i to Release 12.

The E-Business Tax solution for Release 11i migrated data includes these features:

The Release 11i migration solution lets you begin using E-Business Tax according to your existing tax setup with a minimum number of changes. This solution allows for a gradual adaptation of the E-Business Tax setup and tax determination processes according to your needs. Once you complete the transition to E-Business Tax processes, you can disable the Release 11i migrated solution with no loss of service.

Data Ownership

In Release 11i, each application owned and maintained its own tax codes and rates for use with its application-specific transactions. Because E-Business Tax provides a single source for all transactions for tax determination and tax calculation services, the ownership of the tax setup moves to the E-Business Tax shared ownership model. In this model all legal entities and operating units of the company can share the same tax setup, while individual operating units may need to own tax setup for specific requirements as defined by the tax authority.

Existing operating units with Release 11i tax setup migrate as party-specific configuration owners, with the operating unit owning the tax setup. If a Receivables or Projects tax setup contains location-based tax codes, then these tax codes migrate as part of the common configuration, with the global configuration owner owning the location-based tax setup.

If you designate an operating unit with migrated tax setup to use the subscription of the legal entity, you can still make use of the tax classification code model for tax determination and tax calculation. See: Tax Classification Codes in Oracle E-Business Tax.

Transaction Handling

In Release 11i, Payables held summary tax distributions and allocations without showing taxable amount details or tax line information. Procurement transactions did not carry explicit tax lines and distributions, and every transaction query was a recalculation.

In E-Business Tax, there are these improves to the management of transaction handling and display:

Note: Tax lines existing on an 11i item line, that are migrated to R12 will be recalculated, however, no new tax lines can be added to the 11i migrated item lines.

Tax Code Migration

In Release 11i, the application-specific tax code performed many tax-related functions. These included the tax type, tax rate, offset taxes, recovery rules, taxable basis determination, tax calculation, and maintenance of related tax accounts. The Receivables tax group let you combine tax codes to calculate multiple taxes on single taxable items. In keeping with the E-Business Tax setup, the functions of Payables and Receivables tax codes migrate to E-Business Tax records according to the E-Business Tax Regime-to-Rate model.

Note: For the Latin Tax Engine, tax regime codes are created based on the Tax Rule Set (global_attribute13) in AR_SYSTEM_PARAMETERS and taxes are created based on Latin Tax Categories. If you are using the Latin Tax Engine to calculate taxes, do not create new tax regimes and taxes, but continue to use the Latin tax categories, tax codes, and tax groups.

This table describes the major features of tax code migration.

AP/AR Tax Codes E-Business Tax Record
OU country + Tax Type Tax Regime Code
Tax code name Tax Code and Tax Rate Code (minus numeric identifiers)
All tax codes Tax Status of value Standard
Tax rate details:
  • Percentage rate

  • Effective date range

  • Default recovery rate

  • Offset tax code

Tax Rate record
Location-based tax rates
  • TCA geographies (locations)

  • Tax jurisdictions

  • Tax rates

Tax account details:
  • Set of books

  • Tax code combination

Tax Rate tax account record:
  • Ledger

  • Recoverable/Non-recoverable code combination

Tax calculation details Tax classification code
Tax group with tax compounding
  • Tax regime and tax

  • Taxable basis formula

Global Descriptive Flexfield Migration

In Release 11i, you used the global descriptive flexfield to hold tax-specific information for Payables and Receivables transactions.

Release 11i global descriptive flexfield values migrate either as E-Business Tax entities or entity attributes. This table describes the migration of global descriptive flexfields to E-Business Tax.

Global Descriptive Flexfield E-Business Tax Destination
Tax Codes window
  • Tax attributes of taxes, tax statuses, and tax rates

  • Tax reporting types.

First and Third Parties Attributes in party tax profiles, tax registrations, and party fiscal classifications
Items window Product fiscal classifications
Payables Invoices window Payables Invoices named columns
Payables Distributions window Payables Invoice Lines named columns
Tax group with tax compounding
  • Tax regime and tax

  • Taxable basis formula

Related Topics

Oracle E-Business Tax, Oracle Financials and Oracle Procurement Functional Upgrade Guide: Release 11i to Release 12

Tax Classification Codes in Oracle E-Business Tax

The migration of Release 11i tax codes and related tax setup to E-Business Tax is designed such that after migration you can arrive at the same tax result for the same transactions. Release 11i tax codes migrate to E-Business Tax as tax classification codes. The tax classification code is a tax determining factor under the Transaction Input Factor determining factor class. You can use tax classification codes and the Direct Tax Rate Determination rule type to set up a tax determination model similar to Release 11i. The elements of the direct tax rate determination model are:

At transaction time, E-Business Tax uses the tax classification code that is defaulted to the transaction line to determine the tax status and tax rate for applicable taxes. You can also manually enter a tax classification code on the transaction line.

Related Topics

Setting Up Lookup Codes

Using Application Tax Options, Oracle E-Business Tax User Guide

Using Tax Classification Codes, Oracle E-Business Tax User Guide

Setting Up Tax Determining Factor Sets, Oracle E-Business Tax User Guide

Tax Configuration Migration Path

The automated migration process converts Release 11i tax data to E-Business Tax tax configuration data. Once the automated migration process is complete, you can begin using your migrated tax data in E-Business Tax without any additional modifications or updates.

Over time, you can apply incremental updates and modifications to migrated tax data in order to gradually move from the Release 11i tax code model to the E-Business Tax regime-to-rate and tax rules model. This gradual change can include:

As you become familiar with E-Business Tax setup tasks, you can create new tax data directly in E-Business Tax, according to your requirements.

This table provides guidelines for using Release 11i tax data in E-Business Tax, and indicates, where applicable, ways to increase your use of E-Business Tax features for your tax determination needs.

Feature Release 11i Steps Release 11i Usage in E-Business Tax Using E-Business Tax
Tax Definition
  • Define a tax code for a new rate.

  • Create a tax group code for tax codes that occur together.

  1. Define a tax classification code and create a direct rate determination rule with this code.

  2. Define a tax rate code in the context of a tax regime, tax, and tax status.

  • Use Place of Supply or Applicability rules to determine which taxes apply.

  • Use Status or Rate rules, if necessary.

  • Use jurisdiction rates.

  • Use Recovery Rules, if applicable.

Tax Code Defaulting Hierarchy Define the defaulting hierarchy using system options and select a tax code for each source. Update/define the defaulting hierarchy using Application Tax Options and select a tax classification code for each source. Replace the defaulting hierarchy with tax rules for specific tax regulations.
Tax Jurisdictions Define location values under a location structure and associate each value with a tax rate. Update/define location values and rates under:
  • TCA geography hierarchy and tax zones

  • Tax jurisdictions

  • Tax rates

Define multiple tax rates for a jurisdiction, for different statuses and rates.
Tax Compounding Define compounding in tax groups.
  • Compounding setup upgraded with taxes.

  • Compounded taxes upgraded as taxable basis formulae.

  • Define compounding at tax level.

  • Define multi-level compounding or surcharges in combination with base rate modifiers.

  • Enable/disable cross-regime compounding.

Tax Inclusive Settings
  • Define Standard Inclusive Handling and Standard Non-Inclusive Handling at Receivables System Options, Tax Codes and Tax Groups levels.

  • Set Tax Inclusiveness at the customer/site and supplier/site levels.

Update/define Standard Inclusive Handling, Standard Non-Inclusive Handling, and Special Inclusive Handling at the tax regime, tax, and tax rate levels.
  • Set Tax Inclusiveness on invoices at the party/party site and account tax levels.

  • Use Configuration Owner Tax Options for a combination of configuration owner and application event class to define the order in which parties/registrations are checked for tax inclusiveness and to override tax inclusive handling on transactions.

Tax Recovery
  • Allow Recoverable Taxes setting defined at Financials System Options.

  • Recovery rates and recovery rules associated with tax codes.

  • Allow Tax Recovery setting appears at both tax regime and tax levels, for more granular control.

  • Recovery rates upgraded under the tax Primary Recovery Type.

  • Accounting-based recovery rules upgraded as tax rules for recovery.

  • Add tax recovery rules by intended use and/or product fiscal classification.

  • Optionally define a secondary recovery type and rates for Canadian taxes.

Tax Rounding
  • Procurement: Set Rounding Rule and Rounding Level under Supplier/Supplier Site.

  • Receivables: Set Rounding Rule and Rounding Rule Override in Receivables System Options

  • Update/define Rounding Rule and Rounding Level under third party tax profiles.

  • Define Rounding Rule and Rounding Rule Override at tax regime and tax levels, independent of product.

Use Configuration Owner Tax Options for a combination of configuration owner and application event class to define a rounding precedence hierarchy for deriving the rounding level and rounding rule to use on a transaction.
Tax Profile Options Set tax-related profile options under Payable, Receivables, and Cash Management. Set tax-related profile options under E-Business Tax.
  • Use the Tax and Configuration Owner Tax Options settings in conjunction with profile options for more granular control.

  • Set the eBTax: Read/Write Access to GCO Data profile option to restrict user access to creating and modifying installation-level tax configurations.

Tax Overrides
  • Receivables: Allow Tax Rounding Override and Allow Override of Inclusive Tax Lines.

  • Tax Codes level: Allow Tax Rate Override.

  • Responsibility level: Allow Override of Customer Exemptions and Allow Override of Tax Codes.

  • Party tax profile: Allow Tax Rounding Override and Allow Override of Inclusive Tax Lines.

  • Tax Status level: Allow Tax Rate Override.

Use Configuration Owner Tax Options for a combination of configuration owner and application event class to define specific override settings.
Tax Registrations Define separate single tax registrations for:
  • Supplier

  • Supplier site

  • Customer

  • Customer site

  • HR organization

Backward compatibility for:
  • Tax reporting registration number and tax registration type for supplier/supplier site party tax profiles.

  • Tax registrations for customer/customer site uses level.

  • Tax registration for first party legal establishment tax profile.

  • Define multiple tax registrations for the same party and different tax regimes, taxes, and tax jurisdictions.

  • Define detailed information each tax registration.

  • Set up user-definable tax registration types, statuses, and reasons.

  • Use tax registration statuses in tax rules.

Tax Exemptions
  • Define tax exemptions for both items and parties.

  • Use Customer Exemptions set at Receivables System Options.

  • Allow Tax Exemptions set for tax code.

  • Define tax exemptions for a combination of party and tax code.

  • Tax exemptions refer to customer exemptions only; set up item exemptions as tax exceptions.

  • Allow Exemptions set at Configuration Owner Tax Options for a combination of configuration owner and application event class.

  • Allow Tax Exemptions set at tax regime level to apply to all taxes, and at tax level for further granularity.

Set up tax exemptions as part of a third party tax profile for a customer/customer site and tax regime, and optionally for a tax, tax jurisdiction, tax status, and tax rate.

Note: Exemptions are applicable only at the party site level for ship-to. Bill-to exemptions are applicable only when the exemption is defined at that party level.

Tax Exceptions
  • Define tax exemptions for both items and parties.

  • Use Item Tax Rate Exception set at Receivables System Options.

  • Define item exception rates in the Tax Rate Exceptions window.

  • Define item tax exemptions for a combination of item and tax code.

  • Allow Exemptions set at Configuration Owner Tax Options for a combination of configuration owner and application event class.

  • Set up tax exceptions for a combination of Inventory item, tax regime, and tax.

You can also set up tax exceptions for non-Inventory items, and optionally apply them to tax jurisdictions, tax statuses, and tax rates.
Tax Formulas Define PL/SQL for tax codes, and only for taxable basis formulas. Define tax formulas for tax regimes, or tax regime and tax. Define several formula types, including taxable basis, calculate tax amounts, and tax compounding.