VAT Configurations

This page is accessed via Financials > Taxes > VAT Configuration.

VAT Configurations are used by the Calculate VAT and Calculate Provincial Tax actions, which are run against invoices and bills.

After identifying the VAT Configuration, select whether the Tax Type is a Provincial VAT or a European VAT. Provincial VAT is a value added tax used in Canada and Australia, while a European VAT is a value added tax applicable in the European Union.

VAT Configurations include one or more perspectives for which the value added tax is applied. Click New Perspective to launch the perspective page.

Perspective

After the perspective page launches, different fields display depending on whether you selected Provincial VAT or European VAT as your tax type.

Tax Type - Provincial VAT

Use the Perspective field to specify whether the VAT is applicable for buy-side shipments, sell-side side shipments, or both.

Enter the Country Code for which the VAT is applicable. The country codes use the three-digit ISO 3166 country code format.

Selecting the appropriate Goods Location Type determines how the VAT is applied. VAT is applied to invoices and bills. If Shipment is selected, the VAT calculation is based on the geography of the shipment. If Order is selected, the VAT calculation is based on the geography of the order.

When Goods Location Type is Order and the Allocate check box is selected, OTM allocates invoice amounts to order releases so that the proper VAT amounts can be calculated using the geographies of those orders. The final VAT amount is applied to the Invoice.

Note: If Shipment is selected as the Goods Location Type, then the Allocation field is ignored.

The Customer Involved Party Qualifier specifies the qualifier for the invoice or bill involved party that should be considered.

Use the Import VAT Code to specify a tax added to the invoice or bill for a move that is an import into the country specified in the Country Code field above.

Use the Export VAT Code to specify a tax added to an invoice or bill for a move that is an export from the country specified in the Country Code field above.

Province Code Profiles are groups of related province codes and are defined as sets of Country Codes and Province Codes. You assign a Source Province Code Profile and a Destination Province Code Profile for the source and destination of the shipment. You also assign a VAT Code Ordered Set, which defines the sequence in which provincial taxes are applied, as well as a Province Source. For moves that fit the source and destination province profiles, the VAT codes in the VAT Code Order Set will be applied. If there are multiple province codes that apply, then Oracle Transportation Management uses the province of the customer, order source, order destination, service provider, shipment source, or shipment destination, which you selected in the Province Source field.

Tax Type - European VAT

Use the Perspective field to specify whether the VAT is applicable for buy-side shipments, sell-side shipments, or both.

Selecting the appropriate Goods Location Type tells Oracle Transportation Management how to apply the VAT. If shipment is selected, then the appropriate VAT is applied to the entire shipment. If order is selected, then Oracle Transportation Management reviews the shipment and applies any VAT to the appropriate orders.

If the Allocate field is checked, the allocation logic is run first, and VAT is calculated and added to each allocated line item for each order.

Note: If shipment is selected as the Goods Location Type, then the Allocation field is ignored.

The Customer Involved Party Qualifier specifies the qualifier for the invoice or bill involved party that should be considered.

When the Calculate VAT action is run, it goes through a series of scenarios, with varying outcomes, known as VAT Outcomes. VAT Outcomes are predefined and are shipped with Oracle Transportation Management. You can assign any or all of these VAT outcomes to your VAT Configuration. When the Calculate VAT action is run, it uses this VAT Configuration as well as the VAT outcomes you have listed here to determine what VAT to apply.

When the action is run, it looks at the VAT Outcome ID field to know what to do. You assign a VAT Code ID to it so Oracle Transportation Management knows what VAT rate to apply when this VAT Outcome is the result. When multiple country codes apply, Oracle Transportation Management looks at the VAT Country Source field and pulls the country code from the customer, order, service provider, or shipment. If the Calculate VAT action is run and the result yields multiple VAT Outcomes, then Oracle Transportation Management looks at the Priority field to see what VAT code should be applied.