Tax Configuration Options
Set up configuration options to associate tax regimes with the parties in your company that have a tax requirement for these tax regimes.
There are two fundamentally different approaches to tax configuration options, namely:
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Using tax configuration setup defined directly in Oracle Fusion Tax.
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Using external tax partner content uploaded for use with Oracle Fusion Tax.
Using Tax Configuration Setup Defined Within Oracle Fusion Tax
Use the tax configuration setup in Oracle Fusion Tax to calculate, record, and account for transaction taxes on transaction taxable transactions.
The following concepts control how this setup is managed, used, and shared:
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Tax configuration owner
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Tax content subscription
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Existing tax option
Tax Configuration Owner
The tax configuration owner is a business unit, legal entity, or the global configuration owner that owns the data. The global configuration owner is an abstract owner. It is used to define the owner of content that can be shared by any business units and first-party legal entities.
Identify a specific first-party legal entity as a parent first-party organization. This allows the configuration to be owned by a specific first party and shared by other parties. You can then share this setup with another first-party legal entity or business unit for their transactions. Use a parent first-party organization tax configuration to share among a group of first-party organizations. However, you still have the tax setup managed by a single first-party organization.
As the global configuration owner, if you have the Create Tax Regime privilege (ZX_CREATE_TAX_REGIME_PRIV), you can update all tax configuration data.
Tax Content Subscription
Use tax content subscriptions to define which configuration owner's setup is used for transactions for a specific first-party legal entity or business unit for a specific tax regime. Also, use tax content subscriptions to specify whether any shared content can be overridden by the subscribing party to allow unique, separate setup for certain tax content.
Party override is permitted for the following setup:
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Tax
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Tax status
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Tax rate
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Tax recovery rate
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Tax rules
Do this indirectly by adding higher priority rules specific to the subscribing first-party legal entity or business unit.
The content subscription options are:
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Tax Content Subscription |
Description |
|---|---|
|
Common configuration |
For tax processing, the tax determination process uses the shared tax content defined and maintained by the global configuration owner. |
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Party-specific configuration |
The specified first-party organization defines and maintains its own tax content. For tax processing, the tax determination process uses only the tax content owned by the specific first-party legal entity or business unit. |
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Common configuration with party overrides |
This option is similar to the common configuration because it lets you use the tax content owned by the global configuration owner. However, you can also maintain party-specific content which is used in preference to the common configuration content. In the absence of tax content owned by the specific first-party organization, the tax determination process uses the tax content owned by the global configuration owner. |
|
Parent first-party organization with party overrides |
This option is similar to the common configuration with party override subscription with one difference. The tax content here is owned by a specific first-party legal entity instead of the global configuration owner.. You can override the specific first-party setup. |
A similar concept is used to define where you use tax exceptions for a specific tax configuration. The tax subscription option available for product exceptions is dictated to some extent by the main tax content subscription as follows:
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Options Defined for Tax Content Subscription |
Content Subscription Options Available for Product Exceptions |
Description |
|---|---|---|
|
Common configuration |
Common configuration |
For tax processing, the tax determination process uses tax exceptions defined and maintained by the global configuration owner. |
|
Party-specific configuration |
Party-specific configuration |
The specified first-party organization defines and maintains its own tax exceptions. For tax processing, the tax determination process uses only the tax exceptions owned by the specific first-party organization. |
|
Common configuration with party overrides |
Common configuration |
For tax processing, the tax determination process uses tax exceptions defined and maintained by the global configuration owner. |
|
Common configuration with party overrides |
Party-specific configuration |
The specified first-party organization defines and maintains its own tax exceptions. For tax processing, the tax determination process uses only the tax exceptions owned by the specific first-party organization. |
|
Parent first-party organization with party overrides |
Party-specific configuration |
The specified first-party organization defines and maintains its own tax exceptions. For tax processing, the tax determination process uses only the tax exceptions owned by the specific first-party organization. |
Set up tax configuration options when you create a tax regime or when you create a party tax profile for a first-party legal entity or business unit. Both setup flows display and maintain the same party or regime definitions. Specify effective start and end dates to identify which configuration should be used based on the transaction date. You can enable the business unit so that Oracle Fusion Tax automatically uses the configuration of the legal entity. Once you set this option the application records the date it occurred as the start date. This date is used and compared to the transaction dates to identify if the application uses the legal entity subscription in preference to the subscription of the business unit. The specific first-party legal entity that is used is defined by the legal entity associated with the transaction.
Existing Tax Option
Copy a tax from an existing tax in the Manage Taxes page to share tax registrations and tax jurisdictions. This will create two versions of the same tax, owned by two different tax configuration owners each with their own tax statuses, tax rates, and tax rules. For example, this is useful when you set up US sales and use tax that requires a significant number of tax registrations and tax jurisdictions.
Using External Tax Partner Offerings
Oracle ERP Cloud integration is currently available with comprehensive transaction tax management solutions provided by tax partners for tax content, tax calculation, and tax reporting. You can leverage these partner transaction tax solutions independently or together based on different transaction tax requirements across market segments and industries.
Individual tax partners can offer transaction tax solutions in the following areas:
Tax Partner Content
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Offerings may include geographies, tax jurisdictions, tax rates, and taxability rules for products and services.
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Updates are available on a periodic basis for statute changes.
Tax Partner Calculation
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Cloud-to-Cloud integration of the Oracle ERP Cloud and a Partner Tax Application Cloud for performing transaction tax calculation.
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Neither tax software nor tax integration components are required on the Oracle ERP Cloud.
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Streamlined data flow between Oracle ERP
Tax Partner Reporting
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Signature ready returns for automatic transaction tax filings in specific countries.
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Tax partner can manage the entire tax compliance function from tax returns generation to payment remittances.
The following table lists cases of customer implementations using tax partner offerings:
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Tax Implementation Variation |
Customer Tax Solution Uptake |
|---|---|
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Case 1: Partner Tax Content + Oracle Fusion Tax Calculation |
Case 1 uptake:
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Case 2: Partner Tax Content + Partner Tax Reporting + Oracle Fusion Tax Calculation |
Case 2 uptake:
|
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Case 3: Partner Tax Content + Partner Tax Reporting + Partner Tax Calculation |
Case 3 uptake:
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However, each individual tax partner is different with regard to specific transaction tax solutions they can offer and tax implementation cases that they can fulfill in practice.
You must follow up with an individual tax partner to understand the level of coverage and capabilities of their respective transaction tax offerings, including any prerequisite configuration.