Example of Additional Tax Determining Factors on a Receivables Transaction Line

Enter additional tax determining factor information about Oracle Fusion Receivables transaction lines. Tax is calculated on the transaction based on the tax configuration and tax rules setup, as well as any additional tax information that you enter. You can only enter additional information for

Scenario

After reviewing the tax calculated on a sales invoice, you determine that the tax calculation isn't as expected. You expected to see a reduced rate applied to line 2, but the full tax amount was calculated. You evaluate the additional tax determining factors and identify changes that must be done to correct the tax calculation.

Transaction Details

The transaction details are as follows:

• Transaction total: 3240 CAD

• Tax total for the PST tax regime: 240 CAD

  • Line 1: 1000 CAD Facilities Rental

  • Line 2: 2000 CAD Hotel Room

The tax total amount was more than you expected to be calculated, 8% on the transaction total. You review the detail tax lines and determined that tax was calculated for both lines for the PST tax regime. The tax was correct for line 1, but the tax for line 2 should have been calculated at a reduced rate.

Line 2 is for the hotel room, which is under the PST tax regime, but should have a reduced rate of 5%. The rate is driven by product fiscal classification and you determine that this attribute is currently not populated for this transaction line. To correct this, override the product fiscal classification with the hotel classification in the Additional Tax Determining Factors region.

Resulting Transaction Tax Amount

The product fiscal classification you entered satisfies a condition in a Determine Tax Rate rule for the applicable tax regime and tax. As a result, the tax determination process applied a reduced rate of 5% to line 2. The total tax amount for the transaction is 180 CAD ((1000*.08)+(2000*.05)), which is what you expected.