Example of Tax Point Handling on Order-to-Cash Transactions

Specify the events for the tax point basis to identify the appropriate date to account and report your transaction taxes to the tax authorities.

You can define the event for reporting of taxes at various levels within tax setup for determining the tax point date. The following scenario illustrates tax calculation using the tax point basis and tax point date on order-to-cash transactions.

Transaction dates for the scenario are:

Transaction	Date
Sales order	01-Mar-yy
Goods shipment	08-Mar-yy
Customer billing	15-Mar-yy
Bill accounting	18-Mar-yy
Payment receipt	16-Apr-yy

Scenario

Assumptions in this scenario are:

• A delivery-based tax is mandated to be reported to the tax authority on its shipment date.

• The invoice document is considered as an official document for reporting and compliance purposes.

• Tax information is captured and reported directly on the invoice, although the shipment date becomes the basis for tax calculation.

The following table describes the tax point details for a sales invoice:

Tax Point Basis	Basis Transaction	Tax Point Date	Details Available on
Invoice	Customer billing	15-Mar-yy	Invoice tax lines
Delivery	Goods shipment	08-Mar-yy	Invoice tax lines
Accounting	Bill accounting	18-Mar-yy	Invoice distributions in General Ledger
Payment	Payment receipt	16-Apr-yy	Invoice payment distributions in General Ledger

When the tax point basis is Delivery, taxes are calculated on the invoice based on the tax attributes on the shipment, through Oracle Fusion Distributed Order Orchestration. The shipment date is considered as the tax point date and the tax liability is accounted as part of invoice accounting.