1.6.2 Define Issuer Taxes as Classes

This topic describes the systematic instruction to define issuer taxes as classes.

An issuer tax can be levied on the coupon paid, or on a cash dividend. The issuer of a security determines the tax. To process the tax levied on a security, you have to maintain Issuer Tax classes. An Issuer Tax class can be maintained in its corresponding section of the Tax Class Maintenance screen invoked from the Application Browser.

Note:

It is not necessary to associate tax rules to an Issuer Tax class. For an Issuer Tax component, you only have to furnish the following details:

• The Association Event
• The Basis Amount
• The Rate Code
• Other operational controls

(Optional) Enter task prerequisites here.

1. On the Treasury Tax Class Maintenance screen, click Issuer Tax.
   The Treasury Tax Class Maintenance- Issuer Tax page is displayed.

   Figure 1-10 Treasury Tax Class Maintenance- Issuer Tax

   
   Description of "Figure 1-10 Treasury Tax Class Maintenance- Issuer Tax"
2. Specify the fields.
   A security goes through different stages in its life cycle, such as:

   • Booking
   • Interest Accrual
   • Liquidation, etc.

   Each stage is referred to as an Event, in Oracle Banking Treasury Management. When defining an Issuer Tax class, you should specify the following:

   • The Association Event
   • Basis Amount

   The event at which you would like to associate a tax component to a security is referred to as the Association Event. The basis on which interest, charge or tax is calculated or levied is referred to as the Basis Amount. (An Issuer Tax can be on the basis of the coupon paid, or on a cash dividend.) The different basis amounts available in the Securities module are associated with a unique ‘tag’. When building a tax component, you have to specify the tag associated with the Basis Amount. When tax is calculated for a security, the basis amount corresponding to the tag will be picked up automatically.