How to Manage Tax Calculation on Receipt Accounting Distributions

You can manage tax calculation on receipt accounting distributions per country-specific tax regulations in India.

Tax regulations in some countries mandate that taxes on inbound transactions (procure to pay) are calculated according to tax rates and tax applicability rules on that date of receipt of goods. To comply with the tax authority regulations, the Tax Calculation on Receipt Accounting Distributions feature recognizes recoverable taxes on Payables invoice of the inbound transaction.

Here’s what you can do using the Tax Calculation on Receipt Accounting Distributions feature:

• Calculate transaction taxes on receipt accounting distributions per tax determinants and tax rates prevailing on receipt of goods.
• View detailed tax lines for recoverable and nonrecoverable taxes on receipt accounting distributions, including tax lines whose tax point basis (TPB) is Invoice.
• Update tax determinants, such as the intended use, purchase order, and so on. Taxes are then calculated according to the updated tax determinants on receipt accounting distributions.
• Update tax determinants copied from receiving lines to Payables invoice lines upon receipt matching. Taxes are then calculated according to the updated tax determinants on the Payables invoice.
• Account recoverable taxes on Payables invoice.
• Create cost adjustment for Receipt matched Invoices if there is a difference between the taxes calculated on receipt accounting distributions and that on Payables invoice

Here are the prerequisites required for setting up transactional tax and calculate taxes on receipt accounting distributions:

• Assign the predefined job roles to the user to create and review receipt accounting distributions.

  For more information on predefined job roles, see the Oracle Applications Cloud Security Reference for Common Features guide.

• Model your enterprise to meet your legal and management objectives.

  For more information, see the Using Rapid Implementation Spreadsheets chapter in the Oracle Financials Cloud Getting Started with Your Implementation guide.

• Complete the common setups for Procurement and financials.

  For more information, see the Oracle Financials Cloud Getting Started with Your Implementation guide and the Implementing Supply Chain Management Cloud guide.

• Set up the required Tax Regime, Taxes, Tax Jurisdictions, Tax status, Tax rates, and applicable Tax rules to accommodate tax calculation on Transactions.

  For more information on tax configuration, see the Oracle Financials Cloud Implementing Tax guide.