Manage Tax in Oracle Pricing

Manage how Oracle Pricing applies tax when it prices an item.

Include or Exclude Tax on List Price

Specify whether to include or exclude tax on the list price:

1. Go to Home > My Enterprise > Setup and Maintenance > Tasks > Search > Manage Tax Regimes.

2. On the Manage Tax Regimes page, open your tax regime for editing.

3. On the Edit Tax Regime page, set the inclusion method:

   Tax Inclusion Method	Description
   Standard Inclusive Handling	Include tax as part of the list price.
   Standard Noninclusive Handling	Don't include tax as part of the list price. Instead, add it to the list price.

   Assume the list price for the item is 100:

   Tax	Price in Sales Order
   Inclusive tax of 10%.	Total Net Price, $90 Total Tax, $10 Pay Now, $100
   Exclusive tax of 10%.	Total Net Price, $100 Total Tax, $10 Pay Now, $110

Use Amounts in the Transaction Currency to Calculate Tax

You can use Oracle Pricing to calculate tax so it more closely matches the tax calculations in Oracle Receivables. Control whether to use amounts in the transaction currency or the charge currency when you calculate tax for each transaction.

Pricing uses the charge currency to calculate tax, by default. If you want to use the transaction currency instead, then:

1. Go to the Setup and Maintenance work area, then select the Order Management offering.
2. On the Opt In page, click the pencil in the Pricing row.
3. Click Change Feature Opt In.
4. Enable the Use Amounts in the Transaction Currency to Calculate Tax feature.

If you use more than one currency in your transactions, then we recommend that you create different series of test data to determine whether the transaction currency or the charge currency provides the optimal results for your tax calculations.

Use Extended Precision

Use extended precision to round the amount for the unit tax from tax line details. If you don't enable this feature, then Oracle Pricing will use standard precision.

Consider an example. Assume a quantity of 12. Here's how it works when you don't use this feature. . .

	Unit Price	Extended Amount
List Price	10.08	10.08 * 12 = 120.96
Net Price	10.08	10.08 * 12 = 120.96
6% Tax, rounded to standard precision	10.08 * 6% = 0.6048 Rounded to 0.61	0.61 * 12 = 7.32
Net Price plus Tax	10.08 + 0.61 = 10.69	10.69 * 12 = 128.28

. . and how it works when you do use this feature:

	Unit Price	Extended Amount
List Price	10.08	10.08 * 12 = 120.96
Net Price	10.08	10.08 * 12 = 120.96
6% Tax, rounded to extended precision	10.08 * 6% = 0.6048 Rounded to 0.60480	0.60480 * 12 = 7.2576 Rounded to 7.26
Net Price plus Tax	10.08 + 0.60480 = 10.68480	10.68480 * 12 = 128.2176 Rounded to 128.22

Opt in to the Use Extended Precision to Round Unit Tax feature. Its under the parent Set Your Options for Pricing Calculation feature under the Pricing functional area in the Order Management offering.