Tax Regimes

Set up tax regimes in each country and geographical region where you do business and where a separate tax applies.

The tax regime provides these functions:

• Groups similar taxes together

• Designates the geography within which taxes apply

• Applies as defaults the settings and values that you define for each tax in the tax regime

• Defines for which taxes the configuration options apply and a specific subscription option applies

• Provides a single registration for all taxes associated with the tax regime

• Defines the use of fiscal classifications as follows:

  • Transaction fiscal classifications

  • Product fiscal classifications

  • Party fiscal classifications

Tax Regime Setup

Define a tax regime:

• Per country per tax type, with the tax requirements administered by a government tax authority for the entire country.

• For standard geographical types or subdivisions within a country, such as a:

  • State

  • Province

  • County

  • City

  In these cases, you base the tax regime on the Oracle Fusion Trading Community Model standard geography.

• Based on disparate parts of a country or more than one country.

  In these cases, you can create one or more tax zones and set up tax regimes for these tax zones. You can also set up a tax regime as a parent tax regime to group related tax regimes together for reporting purposes.

You must set up a tax regime before you set up the taxes in the tax regime. Some tax regime values appear as defaults on the taxes that belong to the tax regime in order to help minimize tax setup.

You must associate a tax regime with all of the first-party legal entities and business units that are subject to the tax regulations of the tax regime. You can set up tax configuration options when you create or edit a tax regime or when you create or edit a first-party legal entity tax profile. Both setup flows appear and maintain the same party and tax regime configuration options.