Define Legal Reporting Units and Tax Reporting Units

Legal Reporting Units (LRUs) are the lowest level components of a legal structure that require registration.

You can create a legal reporting unit whenever the legal entity needs to support several registrations of the same kind or same legislative category. The legal reporting unit is created automatically when the legal employer is created. The legal reporting unit (terminology used in Fusion Financials Applications) is known as the Tax Reporting Unit (TRU) in HCM.

Navigation: Navigator > Setup and Maintenance > Tasks > Search > Manage Legal Reporting Unit

Use the following steps to define a LRU:

1. Select Manage Legal Reporting Unit in the Define Legal Reporting Units for Human Capital Management task group.
2. Click Go to Task.
3. You'll be prompted to either Select and Add the previously created Legal Entity to edit further or Create New Legal Reporting Unit:
4. When creating an LRU for Income Tax, select India in the Territory list of values. For other types of LRUs (PF, PT, ESI and LWF), the territory would typically be one of the states in India.
5. Enter the Name of the Legal Reporting Unit, the Start Date and End Date.
6. The Identifying Jurisdiction for the territory will be displayed by default when the Territory is selected. Select a different jurisdiction if required. For example, when creating a LRU for Income Tax (with India as the territory), you need to change the default jurisdiction India Company Law to India Income Tax.
7. Enter the Legal Reporting Unit Registration Number or the TAN Number.
   The field name is different based on the selected jurisdiction.
8. Select the Legal Address defined earlier.
9. Optionally choose if this is the Main Legal Reporting Unit and associated effective start date.
10. Save the details and proceed.
    Usually a legal entity is a LRU and you don't need to create additional ones. However, you might need to create other LRUs if there's a specific reporting requirement where registrations aren't the same as that of the legal entity.
    You need to add more information for LRUs to choose them as TRUs. To define the legal reporting unit as a TRU:
    1. Select the Manage Legal Reporting Unit HCM Information task.
    2. On the Legal Reporting Unit HCM Classification page, select the checkbox Tax Reporting Unit to choose the LRU as a TRU, and proceed.
    3. On the Tax Reporting Unit Details page, complete the fields as shown below:

    Field	Description
    Tax Reporting Unit Type	Select the required TRU from the list. Note: You need to create separate TRUs for each type: income tax, provident fund, professional tax, employee state insurance, national pension scheme, and labour welfare fund.
    Associated Legal Employer	Select the associated legal employer from the list.
    Tax Reporting Unit Currency	Select the required currency. For India, its INR.