E-Business Tax Engine PDF

Release 12 E-Business Tax Engine
Goetz Schmitz
Agenda Understanding the Past: Oracle Standard Tax Oracle E-Business Tax Engine Benefits and Features E-Business Tax Configurations E-Business Tax Third Party Integration E-Business Tax Reporting Module Integration Transactions Management Tax Simulator Summary
Copyright 2008 Solution Beacon, LLC All Rights Reserved Any other commercial product names herein are trademark, registered trademarks or service marks of their respective owners.
Release 12 Understanding Oracle Standard Tax
Standard Tax - Basics

US Based entities Lack of foreign entity controls Manual in nature Currency driven Rates both manual and subscription Common/main usage for Sales Tax Use Taxes are afterthoughts Despite Multi-national organizations (multi-org), previous releases do not address full global control of taxes, taxing authorities, regulatory and governmental compliance. No single source for oversight and control of taxes both foreign and domestic
Release 12 Oracle E-Business Tax Engine
Full Integration with Tax Providers
Subscribe to Vertex!
Global Control with E-Business Tax

Single Point Source Service oriented architecture within OEBS Self-Service User Interface:
Extended control for products-based tax Country-specific tax content Simple to complex country-specific legislations Cross-border transactions Local compliance requirements (domestic) Constant tax changes by local jurisdictions, legislation, rates and exceptions
Simplified Tax Configuration

Ease of Configuration and Control

Easy to follow Setup Task Required/Not Required Quick Link to Setup Task Global View/Global Control
New Features with E-Business Tax

Tax Repository Self-Assessment/Reverse Charge Tax Zone Types Tax Formulas Tax Condition Sets Tax Simulator: Simulates Tax Calculations based on What-If scenarios Parallel audit trail to review which Tax Rules were satisfied Can be used to replicate standard transactions for PO, Invoices, Invoices matched against POs, etc. typically integrated with the Tax Lines Interface A quick way to enter transactions to perform what-if scenarios on tax calculation, but not perform normal validation in the application forms. NOTE: Tax Simulator emulates, but does not trigger real transactions.
Service Oriented Architecture
Tax Management
Repository, Reports, Dashboards, etc.

Validate Address Calculate Taxes Determine Recovery Additional Services
Services Rules Engine Configuration Definition Setup
Tax Regimes Place of Taxes Supply
Registration Taxable Basis
Rates Recovery
METADATA
Taxonomy & Rules
Party
Product
Place
Process
Tax Regime
Tax
Tax Jurisdiction
Tax Status
Tax Rate
Recover Rate
OU Tax Accts
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Service Oriented Architecture
E-Business Tax Definitions

Operating Unit Tax Accounts
Tax Regime
Tax
Tax Jurisdictions
Tax Status
Tax Rate
Recovery Rate
Set of Tax rules that determine treatment of one or more taxes administered by tax authority
The geographical area where a tax is levied by a specific tax authority or where the specific tax rate applies
Taxable nature of a product or service in context of a transaction and a specific tax (taxable, exempt, nontaxable)
The rate specified for a tax status in effect for a period of time
The rate of Input Tax that is allowed to be recovered or offset against Output Tax
Tax Accounts that are associated with Tax Rates and Recovery Rates Accounting
FOUNDATION FOR E-BUSINESS TAX ARCHITECTURE
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Party Tax Profile - Required

Body of information that relates to a partys transaction tax activities Legal entities, legal establishments and operating units that have tax requirements must have tax profiles
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Tax Profile Party Types

First Party Legal Establishment Operating Unit Owning Tax Content Tax Authority Third Party Third Party Site
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Tax Regimes - Required

Term definition on setup form US Sales Tax is an example of a Tax Regime Or in our example US Pirate Treasure Tax!!!
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Next Step? Create Tax

Regime is setup whats next? Previous releases we would scramble to doco Here we see Create Tax is next
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Tax
Distinct charge imposed by a government through a fiscal or tax authority Notice geo structure is defined (Country and State)
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Next Step? Create Tax Status

Notice the evolving setup hierarchies / entities / steps Regime to Rate Flow steps you through the setups
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Tax Status
Taxable nature of a product in the context of a transaction and a specific tax on the transaction
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Next Step? Create Tax Rate
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Tax Rates and Accounts

Integration with Ledger here Notice the TX jurisdiction here this will all be populated with Vertex
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Tax Rates and Accounts

Accountant Joy!!!! Account setups Notice the Ledger is the intersection with operating unit
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Next: Tax Rules

Guided Rule Entry should guide you through
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Regime to Rate Flow
Integration to either Vertex or Taxware for current rates, and location based tax controls
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Tax Jurisdiction Optional..
Geographic Region or Tax Zone where tax is levied Tax Status must be setup Multiple-Jurisdiction taxes can be enabled for all counties, or all provinces for a particular type of tax within a particular region/state One Tax Jurisdiction must be setup for a tax before transactions can be performed on that jurisdiction
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E-Business Tax Configuration
-Legal Party
-Document
Fiscal Classification -Registration -Party Fiscal
Party
Process
-Transaction Fiscal Classification -Transaction Generic Classification -Accounting Event
-Goods and
Services
Product
Place
-Geography
associated with the transaction(s)
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Legal Entity Setup - Required
Mandatory or Required setups are clearly noted
Quick link to configurations
27
Party Classifications - Optional

Geographic Region or Tax Zone where tax is levied Tax Status must be setup Multiple-Jurisdiction taxes can be enabled for all counties, or all provinces for a particular type of tax within a particular region/state One Tax Jurisdiction must be setup for a tax before transactions can be performed on that jurisdiction
28
E-Business Tax Rules Engine
Projects
Receivables Payables
Purchasing
Inventory
Party
Process
4Ps determining factors
Product
Place
Tax Values
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Tax Rules Build - Guided
Oracle-guided setup for building Tax Rules Multiple-Jurisdiction tax rules can be enabled for both foreign and domestic tax regimes Easily updateable Choice either self or Oracle guided rule building
30
Tax Rules Build Guided (cont)
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E-Business Tax Services
Does NOT provide services for: for *Payables withholding taxes *Latin American receivables transactions *India transaction taxes
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E-Business Tax Management

Fully Integrated Solution for: Formatting, Managing and Delivering Your Business Documents Meets Business Requirements by removing complexity normally attributed to disparate transactions both to and from source systems.
Invoices
Checks
Labels
Reports
XML Publisher
Order Confirmations
Fund Transfers
33
E-Business Tax Management Process

Data Sources
Tax Reporting Ledger
Tax Repository
PDF RTF HTML XML EDI Excel
XML Publisher
Publishing Engine
Output Formats
Destination -Email
-Printer -Fax
Sub ledger Accounting
AR
Letters
Templates
AP
Order Confirmations
Funds Transfers
Online Payroll Checks
PA
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Release 12 Third Party Integrations
Third Party Tax Integration

E-Business Tax Engine standard package integration (Pre-bundled) Vertex and Taxware Integration and Configurations:

Business Processes:
Licensing required Support only for US State and Local taxes within OTC cycle Certified prepackaged in R12 OEBS; Database objects on CD Auto Upgrade of existing server-side version if existing, and certify if necessary the more recent versions (compared to CD versions) Install scripts, profile options, lookup codes (tax exemption reasons), providerspecific tax regimes and taxes, client-side tax software, load rates, setup tax accounts (liability), turn-on address validation (make sure before creating new addresses), jurisdiction codes, validate/test provider implementation (test cases). Service Provider Codes definitions (Vertex=Geocodes, Taxware=Jurisdiction Code) Handling Exemptions Reconciliations and Procedures
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Vertex/Taxware Integration - Custom

Tax Calculation API from provider gathers input from this view: (ZX_O2C_CALC_TXN_INPUT_V). This view has extra columns not found or mapped in Oracle. Customizable Functions: ARP_TAX_VIEW_TAXWARE and ARP_TAX_VIEW_VERTEX Use of Descriptive Flexfields predefined to enter ship-from information: HR_LOCATIONS_V User-defined Descriptive Flexfields to store tax information: AR_RECEIVABLES_TRX (ATTRIBUTE15) and RA_CUST_TRX_TYPES_ALL (ATTRIBUTE1)
37
Release 12 Relationship Flow
Tax Relationship Flow - Detail
Tax Relationship Diagram E-Business Tax Engine

Vertex
Vertex API
Definition Setup Configuration Rules Engine Services Tax Mgt.
Oracle E-Business Suite

Taxware
Taxware API Procure to Pay (PO, AP) Order to Cash (OM, AR, PA)
39
Tax Relationship Flow - Detail
Release 12 Tax Management Reporting
Tax Reporting Ledger Single reporting solution to address complex global tax requirements from P2P transactions in a summary format of tax information from AR, AP and the GL. Tax Extract copies the data to the interface tables Use Oracle Reports, XML Publisher, or RXi tools to specify which data columns to use and what format you want. TRL supports Deferred Output Tax Register, Recoverable/Non-Recoverable Tax Register, Single Cross Product Tax Register, Standard Input and Output Tax Registers
42
E-Business Tax Reporting Setups and Programs

Common Report Parameters:

Reporting Level (multi-org access) Reporting Context (reporting level=ledger, OU, etc) Company Name Accounting Status (accounted, unaccounted, both) Currency GL Date Transaction Date
XML Publisher Reports generation E-Business Tax Transactions Upgrade On Demand
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E-Business Tax Reports - Examples
Customers with 0 VAT and no VAT Registration Number Financial Tax Register Intra-EU Audit Trail Report Tax Received Tax Reconciliation/ by Taxable Account Tax Register Tax Audit Tax-Only Open Invoices Report
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E-Business Special Tax Reports
EMEA VAT reporting: Oracle Financials for Europe, using E-Business tax data extracts to retrieve VAT for EMEA. EMEA VAT reports are XML reports Latin America Tax Reporting: Makes use of the Latin Tax engine for country-specific reports Asia Pacific Tax Reporting: Makes use of both Payables and Receivables tax transactions for reporting requirements Some Asia Pacific Tax Reports are XML reports
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Release 12 Module Integration
Standard Applications Flow
47
Application Integrations
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Release 12 Transactions Management
E-Business Tax Handling of Common Transactions

Tax calculated on transactions based on legal entity and/or operating unit setups Tax Configurations and Tax Rules Setups Transactions Tax Used = Tax Regime = LE/OU Tax Rates Used and Derived are based upon:
1st Party of the transaction = LE/OU Tax Registrations of 1st and 3rd parties Tax Configuration Setup Tax Rules for Configuration Owner and Taxes Application Event Class Option Settings Customer Tax Exemptions Product Tax Exceptions
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E-Business Tax Common Transactions

Order to Cash transactions from PA and AR Procure to Pay transactions from PO and AP Other transactions from Source Applications (Applications that feed data to AP and AR Trade Management) Payables Invoices Matched to Purchase Orders Prepayment Invoices Debit and Credit Memos Intercompany Transactions Tax Only Lines Etc.
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Release 12 Tax Simulator What If?
Simulation Key Functionality
Ability to test tax changes and rules Test bed for entering POs, Invoices, Invoices matched against POs integrated with Tax Lines Interface Create What-If scenarios on tax calculations without affecting environment with real transactions Ability to enter transactions with fewer validations to test your What-If scenarios
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Simulation Example - Receivables
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Release 12 E-Business Tax Engine - Summary
Summary Global Benefit

Greater Efficiencies through automated processes Improved Consistencies utilizing global tax rules, allowing the business to conform to governmental requirements both foreign and domestic. Allowing Better Control of the decision-making process through increased global visibility of the enterprise Ease of configurability and usage Ability to test/pre-determine taxable scenarios
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Release 12 E-Business Tax Engine

Release 12 Understanding Oracle Standard Tax

Standard Tax - Basics

Release 12 Oracle E-Business Tax Engine

Full Integration with Tax Providers

Global Control with E-Business Tax

Simplified Tax Configuration

Ease of Configuration and Control

New Features with E-Business Tax

Service Oriented Architecture

Repository, Reports, Dashboards, etc.

Services Rules Engine Configuration Definition Setup

Tax Regimes Place of Taxes Supply

Registration Taxable Basis

Taxonomy & Rules

Service Oriented Architecture

E-Business Tax Definitions

FOUNDATION FOR E-BUSINESS TAX ARCHITECTURE

Party Tax Profile - Required

Tax Profile Party Types

Tax Regimes - Required

Next Step? Create Tax

Next Step? Create Tax Status

Next Step? Create Tax Rate

Tax Rates and Accounts

Tax Rates and Accounts

Next: Tax Rules

Regime to Rate Flow

Tax Jurisdiction Optional..

E-Business Tax Configuration

Fiscal Classification -Registration -Party Fiscal

-Transaction Fiscal Classification -Transaction Generic Classification -Accounting Event

associated with the transaction(s)

Legal Entity Setup - Required

Mandatory or Required setups are clearly noted

Quick link to configurations

Party Classifications - Optional

E-Business Tax Rules Engine

4Ps determining factors

Tax Rules Build - Guided

Tax Rules Build Guided (cont)

E-Business Tax Services

E-Business Tax Management

E-Business Tax Management Process

Sub ledger Accounting

Online Payroll Checks

Release 12 Third Party Integrations

Third Party Tax Integration

Vertex/Taxware Integration - Custom

Release 12 Relationship Flow

Tax Relationship Flow - Detail

Tax Relationship Diagram E-Business Tax Engine

Oracle E-Business Suite

Tax Relationship Flow - Detail

Release 12 Tax Management Reporting

E-Business Tax Reporting Setups and Programs

XML Publisher Reports generation E-Business Tax Transactions Upgrade On Demand

E-Business Tax Reports - Examples

E-Business Special Tax Reports

Release 12 Module Integration

Standard Applications Flow

Release 12 Transactions Management

E-Business Tax Handling of Common Transactions