Intended Use Fiscal Classifications

Use intended use fiscal classifications to classify items for tax determination and reporting.

Intended use fiscal classifications can be defined in two ways. When you use the intended use fiscal classification interface for the first time, you can choose how the classification is defined.

Link it to an Oracle Fusion Inventory catalog, which in turn can be used to group items. Items can be grouped using the standard Inventory functionality. To do this, select the Inventory Based option.
Use the hierarchical classification functionality in Oracle Fusion Tax. To do this, select Noninventory based in the Intended Use Classification field.

During transaction time, the application derives the default intended use fiscal classification. Override the default value if necessary. The overridden intended use fiscal classification code is used to determine tax.

Inventory-Based Intended Use Fiscal Classifications

Use inventory-based intended use fiscal classifications to define a classification that uses the Inventory catalog functionality.

During transaction time, when an item is used on the transaction line, the application looks for a default intended use fiscal classification and uses that on the transaction line. At transaction time you can override the default intended use fiscal classification. The overridden value is used for tax determination and reporting. However, unlike product fiscal classification, you define only one level for the intended use fiscal classification.

Set up the following options in the Inventory catalog:

Do not select the Enable hierarchies for categories option.
Select Items at leaf level in the Catalog Content field.
Select the Allow multiple item category assignments option.
Select the Enable automatic assignment of categories option.
Select None in the Source Catalog field.
Do not select a value in the Sharing Control field.

Tip: Care should be taken when defining intended use fiscal classifications based on catalogs as the application may automatically create a default. This default isn't easily visible on the transaction user interface and therefore, you may not be aware that a default has been derived and that you may need to change it.

Noninventory-Based Intended Use Fiscal Classifications

Use noninventory-based intended use fiscal classifications to define classifications that use the functionality within Oracle Fusion Tax. It let you define single level classification codes.

Optionally, link each classification code to a country code. This country code is used to restrict the list of noninventory-based intended use fiscal classifications when you enter them in tax rules and during transaction time.

By matching this country code to the tax regime country the list of noninventory-based intended use fiscal classification codes is restricted. Similarly, the taxation country is used to restrict the list of intended use fiscal classification codes displayed at transaction time. In both cases, the list contains the fiscal classification codes with the matching country or where the country field is blank.

Note: If the code is applicable to multiple countries, leave the country field blank.

Intended Use Fiscal Classifications in Tax Rules

The intended use fiscal classification tax determination factors allow you to use the intended use fiscal classification in tax rules. A combination of determination factor class and determining factor represents these determination factors.

Use the Transaction input factor as the determining factor class and Intended use as the determining factor.

Inventory-Based Intended Use Fiscal Classifications at Transaction Time

During transaction time, when an item is defined on the transaction line, the application automatically derives the default intended use fiscal classification. Override this default intended use fiscal classification at the time of transaction, if necessary.

The intended use fiscal classification is stored in the tax reporting ledger and is available for reporting.