Manage Transaction Tax Lines

Enter and update detail and summary tax lines according to the requirements of your transactions. Depending on your security settings and options specified during tax setup, you can:

• Enter manual tax lines

• Enter tax only tax lines

• Change existing tax line information

• Cancel tax lines

Note: The Summary Tax Lines component is applicable only to Oracle Fusion Payables.

Entering Manual Tax Lines

These requirements apply to entering a manual detail or summary tax line:

1. Enable the Allow entry of manual tax lines option for the:

   • Configuration owner and application event class

   • Tax

2. Ensure that the Manual Tax Line Entry profile option is enabled. It is enabled by default.

3. Enter a unique combination for a tax regime and tax. You can't enter a manual tax line for a tax that already exists for the transaction line.

4. Enter a tax status to enter a tax rate.

5. Enter a tax regime, tax, tax status, and tax rate to enter a tax amount.

The tax calculation on a manual tax line is a standard formula of Tax Amount = Taxable Basis * Tax Rate. The tax determination process doesn't evaluate tax rules defined for the tax of any tax rule type.

Entering Tax Only Tax Lines

You can enter a tax-only invoice in Payables to record tax lines that aren't linked to a transaction. A tax-only invoice is used, for example, to record tax lines on purchases that are assessed and invoiced separately or to enter tax-only invoices from tax authorities or import agents that record import taxes.

These requirements apply to entering a tax only tax line:

1. Enable the Allow manual tax only lines option for the configuration owner and application event class.

2. Select a tax regime from the tax regimes belonging to the configuration option of the applicable legal entity or business unit.

3. Select a tax, tax status, and tax rate and enter a tax amount.

Note: When you select or deselect the Tax Only Line option on a tax line for the first time, the update doesn't take effect. You must select the specific tax line, click the row header or a noneditable area, and then select the Tax Only Line option.

Editing Tax Line Information

These requirements apply to changing an existing detail or summary tax line:

1. Enable the Allow override for calculated tax lines option for the:

   • Configuration owner and application event class

   • Tax

2. Ensure that the Manual Tax Line Entry profile option is enabled. It is enabled by default.

3. Optionally, enable the following options for the configuration owner and application event class:

   • Allow recalculation for manual tax lines option. The tax determination process recalculates the manual tax lines when there is an update to automatically calculated tax lines.

   • Tax line override impacts other tax lines option. The tax determination process recalculates the taxes on all other tax lines on the same transaction when there is an override of automatically calculated tax lines on transactions.

4. Save any changes to summary tax lines before you enter or change Payables summary tax lines.

5. Change the tax status if necessary. These requirements apply to changing tax statuses:

   • You can't update the tax status if the tax on the detail tax line is enforced from the natural account.

   • If you edit a tax only tax line and change the tax status, you must re-enter the tax rate code.

6. Change the tax rate if necessary. These requirements apply to changing tax rates:

   • The Allow tax rate override option is enabled for the applicable tax status.

   • The Allow ad hoc rate option is enabled for the applicable tax rate.

   • You may need to change the tax status to change to the appropriate tax rate.

   • You can change the calculated tax rate derived from the tax status by selecting another tax rate defined for the same tax regime, tax, and tax status.

7. Change the tax rate percentage or quantity rate if necessary. These requirements apply to changing tax rate percentages or quantity rates:

   • You cannot update the tax rate code and rate fields if the tax on the detail tax line is enforced from the natural account.

   • You can only update the tax rate percentage if the tax rate code has the Allow ad hoc rate option enabled.

8. Change the tax amount if necessary. These requirements apply to changing tax amounts:

   • When you change the tax amount the setting for the Adjustment for ad hoc amounts option of the tax rate determines which value is adjusted, the taxable amount or the tax rate.

   • You can only edit the tax amount if a detail tax line belongs to an historic transaction.

   • You can change the tax amount independent of the tax inclusive and compound tax settings.

   • If you defined tax tolerances for Payables transactions, then if you edit the tax amount and it exceeds the specified tolerance, Oracle Fusion Tax places the invoice on hold.

   • You can only enter 0 as the tax amount if the tax rate is 0.

9. Update the Inclusive option setting if necessary. The tax determination process recalculates the taxable amount and transaction amount.

For tax calculation, a limited evaluation of tax rules on certain updates to a tax line is performed.

Canceling Tax Lines

These requirements apply to canceling an existing detail or summary tax line:

1. Cancel tax lines on Payables transactions only.

2. Enter a new manual tax line to reverse a canceled tax line if necessary.

Note: On canceling the invoice or invoice lines, tax lines are automatically canceled.

When you cancel a tax line both the associated tax line and any distributions that were previously accounted are reversed. If the distributions weren't accounted, then the amounts are set to zero.

Note: When you select or deselect the Cancel option on a tax line for the first time, the update doesn't take effect. You must select the specific tax line, click the row header or a noneditable area, and then select the Cancel option.