Tax Configuration: Create Tax Authority Party Tax Profiles

Platform: R12

Create Tax Authorities Party Tax Profile

Tax Manager –> Tax Configuration –> Tax Authorities Party Tax Profiles

Party Tax Profiles

Select the Party Type ‘Tax Authority’. Search for the Party Name (the Legal Authority you created). Click on ‘Go’.

Note that unless your attach the Legislative Category ‘Transaction Tax’ to the Legal Authority you will not get the Legal Authority here.

Click on the ‘Create Tax Profile’ icon.

Create Party Tax Profile

Check the appropriate boxes if you want to set the Legal Authority as a Collecting Authority or as a Reporting Authority.

Click on the ‘Tax Reporting Codes’ tab to add Tax Reporting Codes.

Create Party Tax Profile - Tax Reporting Codes

See Document ‘E-Business Tax Lookup Codes’ to define quickcodes for E-Business Tax.

When you are done, click on ‘Apply’.

Party Tax Profile Confirmation

You will receive a confirmation message that the Party Tax Profile was successfully created.

E-Business Tax Setup: Tax Configuration

Platform: R12

Tax Configuration

E-Business Tax Setup - Tax Configuration

Once you are done with the external dependencies, you can begin with Tax Configuration.

The checklist for tax configuration is as follows:

1. Create Tax Authorities Party Tax Profiles
2. Create Tax Regimes
3. Create First Party Legal Entity Party Tax Profile
4. Create Tax
5. Create Tax Reporting Codes
6. Create Tax Status
7. Create Tax Jurisdictions
8. Tax Recovery Rates
9. Tax Rates

Only Tax Reporting Codes and Tax Recovery Rates are optional setups.

E-Business Tax Lookup Codes

Platform: R12

ZX_INPUT_CLASSIFICATIONS                                     Used to create tax classification codes for use in tax determination. Release 11i tax codes and tax groups migrate to E-Business Tax as tax classification codes. Payables and Purchasing tax codes migrate as tax classification codes under ZX_INPUT_CLASSIFICATIONS.

ZX_OUTPUT_CLASSICATIONS                                    Release 11i Receivables and Projects tax codes migrate as tax classification codes under ZX_OUTPUT_CLASSICATIONS.

ZX_WEB_EXP_TAX_CLASSIFICATIONS                    Tax Classification Codes for Internet Expense Transactions

ZX_EXEMPTION_REASON_CODE                              Reasons for Tax Exemptions

ZX_JEBE_VAT_TRANS_TYPE                                        Tax Transaction Types to be used when setting up tax rate. Tax Rate Transaction Types represent legal authority codes

ZX_REGISTRATIONS_REASON                                    Tax Registration Reason Codes (for reporting only)

ZX_REGISTRATIONS_TYPE                                           Allows the organization of Registration Types in Categories

ZX_REGISTRATION_STATUS                                        Tax Registration Status Codes. Tax Registration Status Codes are used as determining factors in tax rules. Seeded Values are: Agent, Registered, Not Registered.

ZX_TAX_TYPE_CATEGORY                                           Tax types to classify taxes. Seeded Values are: Sales, VAT, Excise, Custom Duty, Environmental.

Shameem Bauccha

1 July 2009

E-Business Tax setup: Other Prerequisites

Platform: R12

Other Prerequisites

Below is the list of other major prerequisites before you can configure tax.

1. Setup Accounts and Accounting Information
   1. Ledgers
   2. Legal Entity Balancing Segments
   3. Accounting Setup
   4. Complete Accounting Setup

Refer to ‘Accounting Setup Manager’ (Document to follow).

1. Setup Oracle Inventory
   1. Define Inventory Value Sets
   2. Define Inventory Item Category Structure
   3. Define Category Set
   4. Define Inventory Categories
   5. Associate Inventory Items to Category sets

Refer to ‘Inventory Tutorial’ (Document to follow).

Shameem Bauccha

30 June 2009

E-Business Tax Setup: Create E-Business Tax Lookups

Platform: R12

Create User Extensible Tax Lookup Codes

E-Business Tax Administrator –> Home –> Task List –> External Dependencies –> Create User Extensible Tax Lookup Codes

Click on the ‘Go to Task’ icon.

E-Business Tax Lookup Codes

Use this window to update existing lookup codes and add additional lookup codes

See also ‘E-Business Tax Lookup Codes in R12’.

Shameem Bauccha

1 Jul 2009

E-Business Tax setup: Create Tax Authorities

Platform: R12

Create Reporting and Collecting Tax Authorities

E-Business Tax Administrator –> Home –> Task List –> External Dependencies –> Create Collecting and Reporting Tax Authorities

Click on the ‘Go to Task’ icon.

Legal Authorities

If you have not yet defined a Legal Authority while doing GL setup (in the Legal Entity Configurator Module), you may do so now by clicking on ‘Create’.

Create Legal Authority

Click on ‘Save and Add Details’.

Legal Authority Confirmation

You will get a confirmation message that the Legal Authority has been created.

You can go to the ‘Contact Information’ tab to add contacts and addresses.

Note:

You may also create the Legal Authority as follows:

Legal Entity Manager –> Setup –> Legal Authorities

Legal Entity Configurator - Legal Authorities

Click on ‘Create’ and proceed as already explained.

You can query and search for the Legal Authority.

Legal Authority Search

Note that you can add legislative categories if required. Click on the ‘View Details’ icon.

Legal Authority

Click on ‘Update’.

Update Legal Authority

Click on ‘Add Legislative Category’.

Add Legislative Category

The ‘Search and Select: Add Legislative Category’ window is opened. Click on Go. Check the appropriate categories and click on ‘Select’.

Note: When you set up a Legal Authority, set its Legislative Category to ‘Transaction Tax’.

Refer to Document ‘Legislative Categories’ (Document to follow).

Updated Legal Authority

Click on ‘Apply’.

Shameem Bauccha

1 July 2009

Shameem Bauccha

1 July 2009

E-Business Tax Setup: Create First PartyLegal Entity and Establishment

Platform: R12

Create First Party: Legal Entity and Establishments

This is a required step if you want to use E-Business Tax. If you are using General Ledger, then you will have already defined the Legal Entity and Establishment.

Refer to the following documents:

-          Accounting Setup Manager

-          Legal Entity and Establishment

You need to define the following:

-          Legal Entity

-          Legal Establishments for the Legal Entity

Note that Legal Establishments are setup under a parent Legal Entity.

Click on the ‘Go to Task’ icon. Alternatively you may also navigate as follows:

Legal Entity Manager –> Legal Entity Configurator

Legal Entity Configurator Homepage

First Party: Legal Establishment

Setup a Legal Establishment for each office, warehouse, centre etc. which requires registration with a tax authority for one or more taxes. You can setup Party Tax Profiles for each Legal Establishment.

First Party Legal Entity and Establishment

Set the following for each Legal Establishment:

-          Party Tax Profiles

-          Tax Registrations

Establishment

Also setup your Operating Unit.

See Document ‘Operating Unit’ (Document to follow).

Shameem Bauccha

1 July 2009

E-Business Tax Setup: External Depedencies

Platform: R12

External Dependencies

E-Business Tax Setup - External Dependencies

E-Business Administrator –> Home

When you navigate to the E-Business Tax Homepage, you will see a task list that need to be configured before you can use tax in any module.

The task list is broken down in 2 major sections:

1. External Dependencies
2. Tax Configuration

External Dependencies refers to setups on other applications that need to be completed before we can complete with tax configuration.

External Dependencies:

1. Create First Party: Legal Entity and Establishments. This is a required step. You need to create a legal entity and an establishment
2. Create Reporting and Collecting Tax Authorities. You need to have at least one Legal Authority defined. You can set the Legal Authority as Reporting and Collecting Tax Authorities. In some cases these may be two separate Legal Authorities.
3. Create User Extensible Tax Lookup Codes. Preset values already exist. You may decide to alter/add values according to your own requirements.
4. Create Item Category sets. This is at Inventory level.
5. Create Item Categories. This is at inventory level.
6. Create Party Class Category.
7. Create Class Category Codes.
8. Create Geography. If you have taxes that vary depending on geographical location, then you need to configure geography. This setup will be specific to country requirements where the Operating Unit has transactions.
9. Create Tax Zone Types. You can go at levels lower than country level also in case taxes vary within a country (from state to state for example).

In this long list, only the first two tasks are required in all cases.

Shameem Bauccha

1 July 2009

E-Business Tax Setup: Setting Up TCA Geography Hierarchy

Platform: R12

E-Business Tax TCA Geography Hierarchy

In case taxes are levied at a level lower than country level (example at province level) or tax characteristics vary at a level lower than country level, TCA Geography hierarchy must be defined.

TCA Geography hierarchy much be set for each country where there is a tax requirement. The TCA geography hierarchy provides a single reference source for all geographical and location-based information for all E-Business Suite applications.

TCA Geography must be set-up before you can define the following tax-related setups:

-          Legal Entities and Establishments

-          Tax Zones

-          Tax Regimes

-          Taxes

-          Tax Jurisdictions

-          Tax Rules

Use TCA Administration to maintain the following aspects of Geography hierarchy:

-          Country Structure

-          Geography Types

-          Address Validations

In our case we are not using TCA Geography Hierarchy as we have only one tax levied at country level.

Shameem Bauccha

1 July 2009

E-Business Tax Setup: Profile Options

Platform: R12

E-Business Tax Profile Options

All E-Business Tax profiles start with ‘eBTax:’

Navigate to the ‘System Administrator’ Responsibility and query for ‘eBTax:%’

EBTax Profile Options

Set the profiles as required at the level required.

Refer to the following documents on profiles:

Define System Profile Values

Shameem Bauccha

30 June 2009