Consumption Tax Management for Expense Leases

Manage the consumption tax on leases that is calculated and paid upfront to the tax authorities. Capture the consumption tax amounts, take appropriate input tax credits, generate payment schedules, process tax payments to lessors, and generate accounting for recoverable tax amounts.

Configure the Lease System Options to enable Upfront Tax.

Configure System Options

Configure Payment Templates and define the Tax Rate and Tax Recovery Rate to calculate payment schedules for Upfront Tax.

Configure Payment Templates

Lease administrators can then assign the upfront tax attributes from payment templates when creating lease payments.

Update Payments Page

SCHEDULES

Validate the lease and generate schedules. The schedule contains all lease payments including recoverable and non-recoverable upfront tax payments. Use the Schedules tab to view the schedules before lease activation. Activate lease contracts to complete the lease creation process. The activation process generates the lease booking transaction to account for the lease liability, right-of-use asset, recoverable upfront tax, and upfront tax reserve. The nonrecoverable upfront tax is included in the calculations of lease liability and right-of-use asset.

Payment Schedules Page

PAYMENT PROCESSING

Use the Process Expense Lease Payments scheduled process to approve lease payments including upfront tax payments and transfer to Payables for payment processing.

Process Expense Lease Payments

Business benefits include:

• Ensure compliance with accounting for consumption tax.
• Automate tax schedule generation and payment processing to suppliers, increasing productivity, and reducing the risk of error.

Steps to Enable

Use the Opt In UI to enable this feature. For instructions, refer to the Optional Uptake of New Features section of this document.

Offering: Financials  No Longer Optional From: Update 25B

Access Requirements

You do not need any new role or privilege access to set up and use this feature.