Tax Determining Factor Sets and Condition Sets

A tax determining factor is an attribute that contributes to the outcome of a tax determination process, such as a geographical location, tax registration status, or a fiscal classification. Determining factors are represented in tax rules as the following concepts:

• Determining factor class: Tax determining factors are categorized into logical groupings called determining factor classes, such as Accounting or Geography.

• Tax class qualifier: Use a class qualifier with a determining factor class when it is possible to associate a determining factor class with more than one value on the transaction. For example, you need to specify which location type, such as ship-to party, a specific geography level, such as country, is associated with.

• Determining factor name: Each determining factor class contains one or more determining factor names that constitute the contents of the class.

The result of a determining factor class, and its class qualifiers and determining factor names, is a list of available factors for use with tax conditions. Each tax condition within a tax condition set must result in a valid value or range of values for tax determination.

Conceptually, determining factors fall into four groups: party, product, process, and place. The following figure expands upon the determining factors within each grouping.

The relationship between the determining factor and condition sets and the party, product, process, and place is shown in the following table. The relationship value is a concept to group tax drivers and not an element in the tax rule definition. The determining factor, determining factor class, tax class qualifier, determining factor name, condition set operator, and condition set value are all components of tax rule setup.

Relationship	Determining Factor	Determining Factor Class	Tax Class Qualifier	Determining Factor Name	Condition Set - Operator	Condition Set - Value
Process	Accounting	Accounting		Line Account	Equal to	Flexible with range of qualifiers and segment or account values
Process	Document	Document	Document fiscal classification level (1-5) or blank	Document Fiscal Classification	Equal to Not equal to Is blank Is not blank	Document fiscal classification codes of the class qualifier level or all document fiscal classification codes if there is not class qualifier
Place	Geography	Geography	Location type which can be one of the following: Bill from Bill to Point of acceptance Point of origin Ship from Ship to	Geography type from Oracle Fusion Trading Community Model	Equal to Equal to determining factor Not equal to Not equal to determining factor Range Is blank Is not blank	Trading Community Model geography names of the geography type belonging to the location identified by the class qualifier, for example, country or state. If the operator is Equal to determining factor or Not equal to determining factor then the values are: Bill from Bill to Point of acceptance Point of origin Ship from Ship to The available values do not include the tax class qualifier value.
Party	Legal Party Classification	Legal party fiscal classification	First party	Legal activity codes for: Chile Colombia Peru United Kingdom Venezuela	Equal to Not equal to Is blank Is not blank	Legal classification codes of the legal classification activity
Party	Party Fiscal Classification	Party fiscal classification	Location type which can be one of the following: Bill-from party Bill-to party Point of acceptance party Point of origin party Ship-from party Ship-to party	Party fiscal classification type	Equal to Not equal to Is blank Is not blank	Fiscal classification codes of the party fiscal classification type assigned to the party identified by the class qualifier
Product	Product Inventory Linked	Product inventory linked		Name of a specific level of a product fiscal classification	Equal to Not equal to Is blank Is not blank	Fiscal classification codes of the applicable product fiscal classification type
Product	Product Noninventory Linked	Product noninventory linked	Product fiscal classification level (1-5) or blank	Product category product fiscal classification type	Equal to Not equal to Is blank Is not blank	Product classification codes of the class qualifier level or all product fiscal classification codes if there is no class qualifier
Party	Registration Status	Registration	Location type which can be one of the following: Bill-from party Bill-to party Ship-from party Ship-to party	Registration Status	Equal to Equal to determining factor Not equal to Not equal to determining factor Is blank Is not blank	The registration status defined in the registration status lookup. If the operator is Equal to determining factor or Not equal to determining factor then the values are: Bill-from party Bill-to party Ship-from party Ship-to party
Process	Transaction Fiscal Classification	Transaction fiscal classification		Transaction fiscal classification type	Equal to Not equal to Is blank Is not blank	Specific transaction fiscal classification code
Process	Transaction Business Category	Transaction generic classification	Classification level (1-5) or blank	Transaction Business Category	Equal to Not equal to	Transaction business category fiscal classification codes of the class qualifier level or all fiscal classification codes if there is no class qualifier
Process	Transaction Type	Transaction generic classification	Classification level (1-5) or blank	Transaction Business Category	Equal to Not equal to	Transaction business category fiscal classification codes of the class qualifier level or all fiscal classification codes if there is no class qualifier
Process	Intended Use	Transaction input factor		Intended Use	Equal to Not equal to Is blank Is not blank	Product intended use fiscal classification codes
Product	Line Class	Transaction input factor		Line Class	Equal to Not equal to Is blank Is not blank	Transaction event classes and activities Code list of line transaction types such as: Procure-to-pay Credit memo order-to-cash Miscellaneous cash
Process	Product Type	Transaction input factor		Product Type	Equal to Not equal to Is blank Is not blank	Predefined goods or services
Process	Tax Classification Code	Transaction input factor		Tax Classification Code	Equal to Not equal to Is blank Is not blank	Tax classification codes
Process	User-Defined Fiscal Classification	Transaction input factor		User-Defined Fiscal Classification	Equal to Not equal to Is blank Is not blank	User-defined fiscal classification codes
Place	User-Defined Geography	User-defined geography	Location type which can be one of the following: Bill from Bill to Point of acceptance Point of origin Ship from Ship to	Tax zone types	Equal to Equal to determining factor Not equal to Not equal to determining factor Is blank Is not blank	Tax zones of the tax zone type belonging to the location identified by the class qualifier

Tip:

Do not mix the interpretation of the party, product, process, and place and the associated determining factors if possible. For example, if the information you need to model concerns the geography associated with the locations on the transaction do not use party classifications to model this type of requirement.

Tip:

Whenever possible, use automatically determined or derived determining factors, such as party classifications, product fiscal classifications, or geography instead of using those that are reliant on information entered at transaction time, such as product category, intended use, or user-defined fiscal classifications. Those entering information at transaction time may not be familiar with the impact this information has on tax determination.

You can use multiple party and product fiscal classifications at the same time. However, only the primary product fiscal classification, as defined in the country defaults is displayed on the transaction line. When you override the product fiscal classification at transaction time that value is used in preference to the default product fiscal classification.