HCM Organization Setup for China

Setting up enterprise structures for use with Oracle Fusion Human Capital Management involves several related tasks.

Specifically, you must define these entities in the order listed:

1. Legislative data group

2. Legal jurisdictions

3. Legal authorities

4. Legal addresses

5. Legal entities and legal reporting units

Legislative Data Group

You can partition payroll and related data using legislative data groups (LDGs). At least one legislative data group is required for each country where an enterprise operates.

Use the Manage Legislative Data Groups task to create a Chinese LDG. Set the Country to China and the Currency to Yuan Renminbi. Complete other fields as appropriate for your implementation.

Legal Jurisdictions

A jurisdiction is a physical territory, such as a group of countries, country, province, city, or county, where a particular piece of legislation applies. Beijing Social Insurance is an example of social insurance legislation that applies to organizations operating in Beijing City. You must register with an identifying jurisdiction first to do business in a country or a territory within the country. China Income Tax is the predefined identifying jurisdiction for China.

Because individual income tax, public housing fund (PHF), and social insurance are all managed locally, you must define the appropriate jurisdictions, including an identifying jurisdiction, for each territory where you operate. Jurisdiction information is necessary to ensure that statutory deductions are calculated and reported correctly.

Use the Manage Legal Jurisdictions task in Setup and Maintenance to create jurisdictions.

• You must select a territory and legislative category. China supports these legislative categories:

  • Income tax

  • Public housing fund

  • Social insurance

  • Enterprise annuity

• Select Yes in the Identifying Jurisdiction field if this is the identifying jurisdiction in the territory.

• In the Legal Entity Registration Code field, select Legal Entity Registration Number.

• In the Legal Reporting Unit Registration Code field, select Legal Reporting Unit Registration Number.

• Complete the optional fields as appropriate for your implementation.

Legal Authorities

A legal authority is a government or legal body charged with powers to make laws, levy and collect fees and taxes, and remit financial appropriations for a given jurisdiction. Defining legal authorities for China is optional.

Use the Manage Legal Authorities task to create legal authorities. For each authority you create, set the Tax Authority Type to Collecting and Reporting.

Legal Addresses

A legal address is the mailing address of a legal entity or legal authority. You use legal addresses when you send correspondence, such as invoices, bills, reports, and so on, to a legal entity or authority. A legal address is also the address a legal entity uses to register with a legal authority. You must create a legal address for each legal entity you plan to define.

Use the Manage Legal Address task to create legal addresses. For each address you create, select China as the country so that the Chinese address style is used.

Legal Entities and Legal Reporting Units

After you complete the earlier tasks, you can create legal entities, such as legal employers and payroll statutory units, and legal reporting units.