Considerations for Setting Up Withholding Tax

You can set up withholding tax using Oracle Fusion Payables or Oracle Fusion Tax. Which application you use depends on your withholding tax requirements.

Use:

• Payables withholding tax setup to meet the basic withholding tax requirements for most countries

• Oracle Fusion Tax for more complex tax requirements

Payables Withholding Tax Setup

Payables uses:

• Tax data setup for a business unit

• Taxes at a country level

• Tax classification codes consisting of one or more taxes populated on Payables documents from supplier details

Oracle Fusion Tax Withholding Tax Setup

Oracle Fusion Tax uses:

• Shared tax setup data for a:

  • Company

  • Legal entity

  • Business unit

• Taxes at various levels such as for:

  • Country

  • State

  • Province

  • City

• Tax rule defaults for simple tax determination, such as for:

  • Tax jurisdiction

  • Tax status

  • Tax rate

• Tax rules for more complex tax determination, such as for:

  • Place of supply

  • Tax applicability

  • Tax rates

• Both payment and invoice withholding tax calculation

• Withholding tax exceptions and exemptions for a tax defined at lower levels, such as for a particular item

• Period-based tax amount thresholds or taxable basis thresholds maintained at the legal entity or business unit level

• Period-based rate schedules maintained at the legal entity or business unit level