1.8.1 Grouping Tax Components into a Scheme

A Tax Scheme consists of a set of Tax Rules that will be made applicable on a product. Tax schemes can be two types:

• Schemes, which cater to Money Taxation. These tax schemes involve a combination of tax rules only. In Oracle Banking Treasury Management, money taxation schemes are made applicable on deposit, funds transfer, foreign exchange, money market and trade finance transactions.
• Schemes, which cater to Securities and Derivative taxation. These tax schemes involve a combination of tax classes. For instance a security could consist of one or more issuer tax components (a tax on coupons and a tax on redemption). You can define these components as tax classes. Since a Securities/Derivatives tax scheme is composed of one or more tax classes; by associating a tax scheme with a market, you can compute all the tax components for the securities used from the market.

The manner in which you can maintain Money and Security/Derivative scheme types has been discussed in detail in the subsequent sections.