Considerations for Specifying First-Party Tax Profile Options
Set up first-party tax profiles for all legal entities, legal reporting units, and business units in your organization that have a transaction tax requirements. How you set up your first parties can impact the tax calculation on your transactions.
The first-party tax profile consists of:
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Defaults and controls: Applicable to legal entities and legal reporting units. Business units that use their own tax setup don't have defaults and controls.
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Tax registrations: Applicable to legal reporting units.
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Party fiscal classifications: Applicable to legal entities and legal reporting units.
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Tax reporting codes: Applicable to legal entities, legal reporting units, and business units who don't use the tax setup of the legal entity.
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Configuration options: Applicable to legal entities and business units who don't use the tax setup of the legal entity.
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Service subscriptions: Applicable to legal entities and business units who don't use the tax setup of the legal entity.
Defaults and Controls
The following table describes the defaults and controls available at the first-party tax profile level:
|
Option |
Description |
|---|---|
|
Set as self-assessment (reverse charge) |
Automatically self-assess taxes on purchases. |
|
Rounding Level |
Perform rounding operations on the:
|
|
Rounding Rule |
The rule that defines how the rounding must be performed on a value involved in a taxable transaction. For example, up to the next highest value, down to the next lowest value, or nearest. Note: If you defined a rounding precedence hierarchy in
the configuration owner tax option settings for the combination of
configuration owner and event class, Oracle Fusion Tax considers the
rounding details in the applicable tax profile.
|
|
Set Invoice Values as Tax Inclusive |
This first party intends to send or receive invoices with invoice line amount inclusive of the tax amount. Note: This option overrides the tax inclusive handling setting
at the tax level, but not at the tax rate level.
|
Tax Registrations
Set up a separate tax registration to represent each distinct registration requirement for a first-party legal reporting unit. Oracle Fusion Tax uses tax registrations in tax determination and tax reporting. If your first party has more than one tax registration in the same tax regime, then the application considers the tax registration in the order: tax jurisdiction; tax; tax regime.
You must enable the Use tax reporting configuration option on the first-party tax regime to allow entry of global tax reporting configuration details during tax registration setup for legal reporting units for these tax regimes.
Party Fiscal Classifications
If applicable, associate first-party fiscal classification codes with this party. The party fiscal classification codes you enter become part of tax determination for invoices associated with this party. Specify start and end dates to control when these fiscal classifications are applicable for this party and transaction.
For legal entities, you can view the associated legal classifications that were assigned to the tax regime defined for this first party. The legal classifications are used in the tax determination process, similar to the party fiscal classifications.
Tax Reporting Codes
Set up tax reporting types to capture additional tax information on transactions for your tax reports for your first parties. Depending on the tax reporting type code, you either enter or select a tax reporting code for this party. Specify start and end dates to control when these tax reporting codes are applicable.
Configuration Options
The legal entities and business units in your organization are each subject to specific sets of tax regulations as designated by the tax authorities where you do business. Use configuration options to associate legal entities and business units with their applicable tax regimes. You can set up tax configuration options when you create a tax regime or when you create a party tax profile. Both setup flows display and maintain the same party and tax regime definitions.
Service Subscriptions
You can use a service subscription to reference a specific transaction tax offering or offerings provided by an external tax partner. The transaction tax offering provided by an external tax partner can be related to content, calculation services, or both. Oracle Fusion Tax supports the use of transaction tax offerings provided by external tax partners for transaction tax calculation processing. Depending on the specific depth and scope of an individual tax partner's offerings, you can use either Oracle Fusion Tax or a Partner Tax Application to perform the transaction tax calculation.