Party Information
Party classification defines the different types of party. Use party classifications to define party types for tax determination and tax reporting purposes.
Oracle Fusion Tax uses two types of tax party classifications:
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Party fiscal classifications
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Legal party classifications
Both are used to classify parties to provide determining factors or building blocks on which tax rules are defined. They're also used to classify parties for reporting.
Party Fiscal Classifications
Use party classifications to classify your customers, suppliers, first-party legal entities, and first-party legal reporting units for tax determination and tax reporting.
Define the party classification categories and associated classification codes within the Oracle Fusion Trading Community Model party classification setup. Create the party fiscal classifications, and associate the specific Trading Community Model party classification category to these party fiscal classifications, one for each level of the specific Trading Community Model party classification category. Associate tax regimes to these party classifications to ensure that these relationships are only visible and usable where needed. Oracle Fusion Tax uses this relationship to indicate which Trading Community Model party classification categories are used for tax purposes. By reusing the Trading Community Model party classification category functionality, Oracle Fusion Tax can leverage and use the common classification setup for tax purposes where applicable.
Within the party fiscal classifications functionality, define the Trading Community Model classification level to use within Oracle Fusion Tax. For example, if you have a three level Trading Community Model party fiscal classification category, define three levels, giving each a specific party fiscal classification code and name. By naming each level, you can use the specific level as a determining factor when defining tax rules. Use the same party fiscal classification flow to define the tax regimes with which the party fiscal classifications are associated.
Once you have defined your Trading Community Model party classification and associated it with a party fiscal classification and tax regime, you can use it to classify your parties and party sites. These parties and party sites are:
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Customers
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Customer sites
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Suppliers
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Supplier sites
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Legal entities
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Legal reporting units
In the case of supplier and customer parties and party sites, you can associate the specific party classification codes used for tax purposes using either:
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Party tax profile flows within Customer Maintenance and Supplier Maintenance.
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Dedicated flows in Oracle Fusion Tax.
Legal Party Classifications
Legal party classifications are similar to party fiscal classifications. Both use the Trading Community Model party classification setup and allow you to classify the party to determine and report tax. However, the legal party classifications are predefined and are available when you implement the application.
The following legal classification codes are predefined:
|
Legal Party Type Code |
Legal Party Type Name |
|---|---|
|
LEGAL_ACTIVITY_CODE_CL |
Legal activity code for Chile |
|
LEGAL_ACTIVITY_CODE_PE |
Legal activity code for Peru |
|
LEGAL_ACTIVITY_CODE_VE |
Legal activity code for Venezuela |
|
LEGAL_ACTIVITY_CODE_CO |
Legal activity code for Colombia |
|
2003 SIC |
Legal activity code for United Kingdom |
Use legal party classifications to classify first-party legal entities within the Legal Entity setup functionality. Use these classifications as determining factors within tax rules. The legal party classification and specific legal parties are associated within the Legal Entity Maintenance flow.
No specific setup is required as the legal party classifications are predefined, and can be directly used in tax rule setup.