Automatic Assignment of Third-Party Tax Registration Number During Transaction Creation

Automatically assign a third-party tax registration number to the bill-to customer in Receivables transactions during transaction creation.

Transaction creation includes:

• Import AutoInvoice process.

• Manual creation using the Create Transaction pages.

• REST API and PL/SQL API web services.

Note: The automatic assignment of the tax registration number only occurs during transaction creation, and not during any transaction edits.

Transactions include invoices, credit memos, and debit memos. Automatic assignment of the tax registration number to credit memos created manually only applies to on-account credit memos created using the Create Transaction: Credit Memo page. It doesn't apply to credit memos created using the Credit Transaction page.

You manually assign a third-party tax registration number to the bill-to customer in the Customer tabbed region of the Create or Edit Transaction page. The Third-Party Tax Registration Number field makes available for selection any tax registration numbers defined for the customer and its customer sites.

If you manually assign the third-party tax registration number during transaction creation, then this value is used and automatic tax registration number assignment is not used.

If you enable automatic assignment, the third-party tax registration number is assigned:

• For Import AutoInvoice, during the import and initial creation of the invoice.

• For Create Transaction pages and REST API and PL/SQL API web services, on the first save of the transaction. Any saves after the first save are considered as updates only.

Before you start

Automatic assignment of customer tax registrations numbers to transactions is useful for legal entities in countries and tax jurisdictions that require the third-party tax registration number on transactions.

Before you prepare for automatic assignment, you must ensure that you set up all the required tax regimes, taxes, and tax jurisdictions in Oracle Tax needed to comply with the tax authority requirements.

To automatically assign third-party tax registration numbers to transactions, you must also complete these setups:

• Determine which legal entities to enable for automatic assignment.

• Enable automatic assignment on the tax profile of the legal entity that processes customer transactions.

• Set country default controls for tax regime and tax for the applicable tax authority country, to account for cases where more than one tax registration number is defined for a country.

• Create and assign tax registration numbers to the applicable customers and customer sites.

Determine the Legal Entities for Automatic Assignment

Ensure that the legal entity or legal entities enabled for automatic assignment of the third-party tax registration number are assigned to the applicable transactions.

A legal entity is looked for and assigned to a transaction in this order:

• Legal entity of the transaction type assigned to the transaction.

• Legal entity of the transaction source assigned to the transaction.

• Default legal entity assigned to the business unit.

You can, for example, assign all transactions designated for automatic assignment of the third-party tax registration number the same transaction type or transaction source with the applicable legal entity defined. Alternatively, you can omit a legal entity from all transaction types and transaction sources and allow assignment of the default legal entity assigned to the business unit.

Enable Automatic Assignment

To enable automatic assignment on the legal entity:

1. Navigate to the Manage Legal Entity Tax Profiles page.
2. Search for and select the legal entity that you want.
3. In the Controls and Defaults tabbed region of the Edit Legal Entity Tax Profile page, enable the Assign third-party tax registration number during Receivables transaction creation option.
4. Save your work.

Set Tax Registration Default Controls by Country

Use Oracle Tax to set up a default tax registration level by country:

1. Navigate to the Manage Country Default Controls page.
2. Click the Plus (+) icon to open the Create Country Default Controls page.
   Note: If a record for the country exists, use the Country field to search for and select the country, click the country name to open the Country Default Controls page, then click the Edit button to open the Edit Country Default Controls page.
3. In the Tax Regime and Tax Defaults section, enter a tax regime in the Tax Regime Code field.
4. Optionally enter a tax name in the Tax field.
5. Complete the remaining sections and fields according to your requirements.
6. Save your work.

During automatic assignment of the third-party tax registration number to a transaction, if multiple tax registration numbers are defined for a country, the tax registration number that corresponds to the tax regime and tax defined in the Manage Country Default Controls page for the country is assigned to the transaction.

Create and Assign Tax Registration Numbers to Customers

Use Oracle Tax or Receivables to create the required third-party tax registrations for the applicable customers and customer sites.

In Tax:

1. Navigate to the Manage Tax Registrations page.
2. In the Search For field, select Third-Party Tax Profiles or Third-Party Site Tax Profiles.
3. Search for and display the party name you want.
4. In the Tax Registrations tabbed region, click the Plus (+) icon to open the Create Third-Party Tax Registration or Create Third-Party Site Tax Registration page.
5. In the Party Name field, enter the party name or party site number.
6. In the Tax Regime Code field, enter the applicable tax regime code.
7. If you want to define tax-specific or jurisdiction-specific tax registrations, complete the Tax field and Tax Jurisdiction Code field with the applicable tax and tax jurisdiction.
8. In the Registration Details section, enter in the Registration Number field the tax registration number.
9. Complete the remaining fields according to your requirements to define the tax registration and its usage.
10. Save your work.
11. Repeat these steps for each tax registration number.

In Receivables:

1. Navigate to the Manage Customers page.
2. Seach for and select the customer you want.
3. Open the Edit Customer or Edit Site page.
4. Navigate to Tax Profile > Tax Registrations.
5. Click the Plus (+) icon to open the Create Third-Party Tax Registration or Create Third-Party Site Tax Registration page.
6. Complete the page fields according to your requirements and save your work.
7. Repeat these steps for each customer and customer site tax registration number.
   Note:
   During automatic assignment of the third-party tax registration number to a transaction, the assignment process will select, if defined, a jurisdiction-specific tax registration over a tax-specific tax registration, and a tax-specific tax registration over a tax-regime-specific tax registration.

Automatic Assignment of the Third-Party Tax Registration Number

When automatic assignment is enabled, then during transaction creation the assignment process looks for a third-party tax registration number for the transaction in this order:

1. Bill-to Customer Site: The tax registration number of the default tax registration of the Bill-to Customer Site, if any.
2. Bill-to Customer: The tax registration number of the default tax registration of the Bill-to Customer, if any.
3. Bill-to Customer Site Country, in the order:
   1. Ship-from Customer Country (country of origin of goods or services).
   2. Ship-to Customer Country (country of the ship-to party site location).
   3. Legal Entity Country (country of the tax regime associated with the legal entity tax registration number, if provided on the transaction, or the country of the legal entity address).
   4. Bill-to Country (country of the bill-to party site location).
      Note:
      If more than one tax registration number is defined for a customer party site, then a jurisdiction-specific tax registration is assigned over a tax-specific tax registration, and a tax-specific tax registration is assigned over a tax-regime-specific tax registration.
4. Bill-to Customer Country, in the order:
   1. Ship-from Customer Country (country of origin of goods or services).
   2. Ship-to Customer Country (country of the ship-to party site location).
   3. Legal Entity Country (country of the tax regime associated with the legal entity tax registration number, if provided on the transaction, or the country of the legal entity address).
   4. Bill-to Customer Country (country of the bill-to party site location).
      Note:
      If more than one tax registration number is defined for a customer party, then a jurisdiction-specific tax registration is assigned over a tax-specific tax registration, and a tax-specific tax registration is assigned over a tax-regime-specific tax registration.
5. If more than one tax registration number is defined for a country, the tax registration number that corresponds to the tax regime or tax defined as the default tax registration level for that country in the Manage Country Default Controls page is assigned to the transaction.
6. If the automatic assignment process can't find any tax registration number, then the transaction is created without a tax registration number. If required by the tax authority, you must manually assign a tax registration number to these transactions.