Tax Overrides and Tolerances on Payables Transactions

You can override taxes calculated on a transaction depending on the controls you configure within the tax setup. You can place certain restrictions on the maximum override amount for a Payables event class transaction belonging to a configuration owner.

Define these tolerances at the configuration owner tax options level and specify the maximum tax override amount or the maximum allowed percentage deviation between the originally calculated tax amount and the overridden amount.

When you override the automatically calculated taxes on a transaction and if the variance between them exceeds the specified tolerance limits, the Oracle Fusion Payables invoice is placed on hold. The logic for placing the invoice on hold evaluates the overridden amount compared against both the tax tolerance percentage and the tax tolerance amount and the lower of the two values is considered.

For example, if you define the tolerances as maximum allowed amount 15 USD and the maximum allowed percentage 10%, then the application of invoice hold based on the tax override tolerances is as follows. All dollars are in USD currency.

Calculated Tax Amount	Overridden Tax Amount	Net Overridden Amount	Maximum Tolerance Amount	Maximum Tolerance Percentage (10% of the tax amount)	Invoice Hold Status
100	112	12	15	10	Invoice is placed on hold as the variation exceeds the maximum tolerance percentage, though it's lower than the maximum tolerance amount.
200	218	18	15	20	Invoice is placed on hold as the variation exceeds the maximum tolerance amount, though it's lower than the maximum tolerance percentage.
300	314	14	15	30	No hold is placed on the invoice as the variance is within the maximum tolerance amount and maximum tolerance percentage.