Example of Setting Up VAT Reporting

This example demonstrates how you set up the appropriate tax registers for your organization in Italy to meet your tax reporting requirements.

Create a tax reporting entity for every unique combination of tax calendar, tax regime, and tax registration number.

Prerequisites

Here are a few tasks you must perform before setting up VAT reporting:

1. Set up legal entities and legal reporting units using the Legal Entity Configurator to represent your company and its offices. For example, set up Vision Italy as a legal entity.

2. Set up and maintain first-party tax profiles and tax registrations for your company's legal reporting units according to the tax regime. You can do this using Oracle Tax.

3. Set up the tax regimes for the taxes in each country and geographic region where you do business, and where a separate tax applies. For example, set up IT VAT as a tax regime for Italy. Enable the Use tax reporting configuration option on the first-party tax regime. This lets you enter tax reporting configuration details during tax registration setup for legal reporting units for these tax regimes.

4. Set up the tax and tax rates in Tax. You must define the tax with the reporting code enabled. EMEA lookup tax reporting codes, such as VAT and Exempt, are available as predefined tax reporting codes under the EMEA VAT Reporting Type.

5. Define tax reporting periods as accounting periods in Oracle General Ledger. For example, set up Accounting as an accounting period. The final reporting process maintains the tax reporting periods. If you use the same calendar for accounting and tax reporting, the application still maintains accounting periods independently from tax periods.

6. Specify document sequencing for tax transactions to use different transaction sequencing than reporting sequencing. Define document categories in General Ledger, Payables, and Receivables. Define document sequence names in General Ledger and assign them to document categories. For example, set up IT AX Payables as a document sequence name.

Setting Up VAT Reporting

1. On the Manage Tax Registrations page, select Legal Reporting Unit Tax Profiles in the Search For field.

2. Enter Vision Italy in the Legal Entity field and click Search.

3. From the Search Results section, select Vision Italy.

4. On the Tax Registrations tab, select Vision Italy and then click Create.

5. On the Create Legal Reporting Unit Tax Registration page, enter these values:

   Field	Value
   Tax Regime Code	IT VAT
   Registration Number	123456789

6. Click the Tax Reporting Configuration tab.

7. In the Common Configuration tab, enter these values:

   Field	Value
   Tax Calendar	Accounting
   Enable tax registers	Select
   Enable reporting sequence	Select

8. Click the Tax Registers tab and click Create to add a row in the table.

9. Enter these values in the new row:

   Field	Value
   Register Type	Purchase VAT
   Name	Purchase VAT
   Start Date	Current date
   End Date	Blank

   Predefined tax register types are provided for Italy. These include Deferred VAT, Purchase VAT, Sales (self invoice and EU VAT), and Sales VAT.

10. Click Create in the Document Sequence table to add a new row.

11. Select IT AX Payables in the Document Sequence Name field.

12. Click Save and Close.