Tax Calculation Influencers

Transactions using Oracle Fusion Tax services pass key tax determinants of parties, products, places, and processes captured on a transaction to the tax determination process.

Using these details and other derived determinants, the tax determination process performs a series of process steps and determines various components of the applicable taxes.

Use the derived tax components and apply the generic calculation logic (Taxable Basis * Tax Rate = Tax Amount) to get the basic tax amount applicable on a transaction.

The key processes within the tax determination process and the resulting tax components influencing tax calculation logic, other than the tax rate determination, are:

• Taxable basis formula: Influences taxable basis.

• Tax inclusiveness requirements: Influences the taxable basis and the tax amount. It's part of the Determine Taxable Basis process.

• Tax calculation formula: Influences the tax amount.

• Tax rounding requirements: Influences the tax amount. It's part of the Calculate Tax Amounts process.

The taxable basis formula determines the taxable basis amount or quantity for each tax that's processed on the invoice line.

The tax calculation formula determines the calculation process to be applied on the transaction line for arriving at the tax amount.

The inclusiveness and rounding aspects determine:

• The need to calculate the tax amount as inclusive of the transaction line amount.

• The rounding criteria to be used on the calculated tax amount.