Examples of Using Tax Rules Processing Order

During tax determination processing, Oracle Fusion Tax considers the tax rules belonging to each rule type in the order that you defined them.

The following is an example of a tax regime that is subscribed to by a business unit with common configuration treatment. To meet the tax law requirements to determine the tax rates, the following tax rate rules are defined against the global configuration owner. The details shown in the following table are a summary of the rate rules including rule order, geography specific details, associated conditions sets, and the rate results associated to these condition sets:

Rule Order	Normal Event Class	Geography-Specific Rule	Condition Set	Condition Set Order	Result
10	Blank	Blank	CS-1 CS-2 CS-3	10 20 30	VAT10% VAT12% VAT15%
20	Purchase invoice	Location type: Bill from Geography name: California	CS-4	10	VAT12.5%
30	Purchase invoice	Blank	CS-5	10	VAT13%

Tax Rule Processing for a Payables Invoice

If a Payables invoice is involved and Texas is the bill-from party state, the tax rule processing sequence is as follows:

1. The tax rules are listed according to the sequencing logic. For example, the tax determination process evaluates tax rules involving normal event class qualifiers first regardless of having a lower rule order.

2. The tax determination process further evaluates condition sets listed within each tax rule.

The tax determination process is represented as follows:

Rule Order	Normal Event Class	Geography-Specific Rule	Condition Set	Condition Set Order	Result	Evaluation Status	Result
20	Purchase invoice	Location type: Bill from Geography name: California	CS-4	10	VAT12.5%	Condition set: Not evaluated Tax rule: Fail, because the bill-from party state is Texas	Move to next tax rule
30	Purchase invoice	Blank	CS-5	10	VAT13%	Condition set: Evaluated and passed Tax rule: Passed, because the condition set values match with the transaction details	Condition set result considered and exit rule evaluation
10	Blank	Blank	CS-1 CS-2 CS-3	10 20 30	VAT10% VAT12% VAT15%

Tax Rule Processing for a Receivables Invoice

If a Receivables invoice is involved, the tax rule processing sequence is as follows:

1. The tax rules are listed according to the sequencing logic. For example, the tax determination process evaluates tax rules involving normal event class qualifiers first regardless of having a lower rule order.

2. The tax determination process further evaluates condition sets listed within each tax rule.

Rule Order	Normal Event Class	Geography-Specific Rule	Condition Set	Condition Set Order	Result	Evaluation Status	Result
20	Purchase invoice	Location type: Bill from Geography name: California	CS-4	10	VAT12.5%	Condition set: Not evaluated Tax rule: Fail, because the event class criteria does not match	Move to next tax rule
30	Purchase invoice	Blank	CS-5	10	VAT13%	Condition set: Not evaluated Tax rule: Fail, Passed, because the event class criteria does not match	Move to next tax rule
10	Blank	Blank	CS-1 CS-2 CS-3	10 20 30	VAT10% VAT12% VAT15%	For CS-1: Condition set: Fail Tax rule: In process, because the condition set values do not match with transaction details For CS-2: Condition set: Pass Tax rule: Pass, because the condition set values match with transaction details	For CS-1: Move to next condition set For CS-2: Condition set result considered and exit rule evaluation