Brown Field e Business Tax Not Sexy But Smart

E-Business Tax Engine Not Sexy but Smart
Karen Brownfield and Alyssa Johnson

March 23, 2012
Prepared for:
NOTICE: Proprietary and Confidential. This material is proprietary to Rolta / Karen Brownfield / Alyssa Johnson and contains trade secret and confidential information which is solely the
property of Rolta. This material is solely for Client's internal use. This material shall not be used, reproduced, copied, disclosed, and transmitted, in whole or in part, without the express
consent of Rolta / Karen Brownfield / Alyssa Johnson.
Agenda
Understanding the Past: Oracle Standard Tax

R12 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
Rolta / Karen Brownfield / Alyssa Johnson Proprietary & Confidential
March 26, 2012
UNDERSTANDING PRE-R12 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
March 26, 2012
R12 E-BUSINESS TAX ENGINE
Global Control with E-Business Tax

Single Point Source Service oriented architecture within
EBS
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
March 26, 2012
BENEFITS AND FEATURES
Ease of Configuration and Control

Easy to
follow Setup
Tasks
Required/Not
Required
Quick Link to
Setup Task
Global
View/Global
Control
March 26, 2012
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.
March 26, 2012
Service Oriented Architecture

Tax Management
Services
Rules Engine
Configuration
Definition Setup
Repository, Reports, Dashboards, etc.

Validate
Address
Calculate
Taxes
Tax Regimes Place of

Taxes
Supply
Party
Tax
Regime
Determine
Recovery
Registration
Taxable Basis
Product
Tax
Place
Tax
Jurisdiction
Tax
Status
10
Additional
Services
Rates
Recovery
METADATA
Taxonomy
& Rules
Process
Tax
Rate
Recover
Rate
OU Tax
Accts
March 26, 2012
CONFIGURATIONS
E-Business Tax Definitions

Tax Regime
Set of Tax
rules that
determine
treatment of
one or more
taxes
administered
by tax authority
Tax
Distinct charge
imposed by a
government
through a fiscal
tax authority
Tax
Jurisdictions
The
geographical
area where a
tax is levied by
a specific tax
authority or
where the
specific tax
rate applies
Tax Status
Taxable
nature of a
product or
service in
context of a
transaction
and a specific
tax (taxable,
exempt, nontaxable)
Tax Rate
The rate
specified
for a tax
status in
effect for a
period of
time
Recovery
Rate
The rate of
Input Tax
that is
allowed to
be
recovered
or offset
against
Output Tax
Operating
Unit Tax
Accounts
Tax
Accounts
that are
associated
with Tax
Rates and
Recovery
Rates
Accounting
FOUNDATION FOR E-BUSINESS TAX ARCHITECTURE
12
March 26, 2012
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
13
March 26, 2012
Tax Profile Party Types

First Party Legal Establishment
Operating Unit Owning Tax Content
Tax Authority
Third Party
Third Party Site
14
March 26, 2012
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!!!
15
March 26, 2012
Next Step? Create Tax

Regime is
setup
whats next?
Previous
releases we
would
scramble to
find it
Here we see
Create Tax
is next
16
March 26, 2012
Tax
Distinct
charge
imposed by
a
government
through a
fiscal or tax
authority
Notice geo
structure is
defined
(Country and
State)
17
March 26, 2012
Next Step? Create Tax Status

Notice the
evolving
setup
hierarchies /
entities /
steps
Regime to
Rate Flow
steps you
through the
setups
18
March 26, 2012
Tax Status
Taxable
nature of a
product in
the context
of a
transaction
and a
specific tax
on the
transaction
19
March 26, 2012
Next Step? Create Tax Rate
20
March 26, 2012
Tax Rates and Accounts

Integration
with
Ledger
here
Notice the
TX
jurisdiction
here this
could be
populated
with tax
partner
21
March 26, 2012
Tax Rates and Accounts

Accountant
Joy!!!!
Account
setups
Notice the
Ledger is the
intersection
with
operating
unit
22
March 26, 2012
Next: Tax Rules

Guided
Rule Entry
should
guide you
through
23
March 26, 2012
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
24
March 26, 2012
Tax Rules Build Guided (cont)
25
March 26, 2012
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
26
March 26, 2012
E-Business Tax Configuration
-Legal Party
Fiscal
Classification
-Registration
-Party Fiscal
-Goods and
Services
-Document
Party
Process
Product
Place
27
-Transaction
Fiscal
Classification
-Transaction
Generic
Classification
-Accounting Event
-Geography
associated with
the transaction(s)
March 26, 2012
Legal Entity Setup - Required
Mandatory or Required
setups are clearly noted
28
Quick link to
configurations
March 26, 2012
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
29
March 26, 2012
E-Business Tax Rules Engine
Projects
Receivables
Payables
Purchasing
Inventory
4Ps
determining
factors
Party
Process
Product
Place
Tax
Values
30
March 26, 2012
E-Business Tax Services
Does NOT provide services for:

for
*Payables withholding taxes
*Latin American receivables transactions
*India transaction taxes
31
March 26, 2012
THIRD PARTY INTEGRATIONS
Validated Partners
Vertex
- O Series Order to Cash, Procure to Pay
- 3.3.14, 3.3.15, 3.4, 4.0.5.3 Order to Cash
ADP/Taxware
- Enterprise Order to Cash, Procure to Pay
- 3.5 Order to Cash
Thomson Reuters/Sabrix Order to Cash, Procure to Pay

CCH, a Wolters Kluwer business Order to Cash
- Procure to Pay slated for validation April 2012
Contact Vendor for support

- For older versions Vertex/Taxware, see 1335680.1 for link to
implementation guide
How To: R12: What versions of Vertex, ADP/Taxware and Thomson
Reuters/Sabrix are validated with E-Business Tax (EBTax) [ID 465260.1]
33
March 26, 2012
Third Party Tax Integration

E-Business Tax Engine standard package integration (Pre-bundled)
Integration and Configurations:
Licensing required
Auto Upgrade of existing server-side version if existing, and certify if
necessary the more recent versions (compared to CD versions)
Setups may include
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).
Business Processes:
Service Provider Codes definitions (Vertex=Geocodes,
Taxware=Jurisdiction Code)
Handling Exemptions
Reconciliations and Procedures
34
March 26, 2012
Regime to Rate Flow
Integration for current

rates, and location based
tax controls
Tax Relationship Flow - Detail
36
March 26, 2012
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
38
March 26, 2012
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
39
March 26, 2012
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
40
March 26, 2012
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
41
March 26, 2012
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
43
March 26, 2012
Simulation Example - Receivables
44
March 26, 2012
UPGRADE FROM 11I
Tax Code Upgrade from 11i to 12

11i Tax codes become R12 Tax Classification
Codes
Tax classification codes are entered on the
transaction lines and the tax rate associated with
the tax classification code is then applied to the
transaction
Contact support to verify have latest scripts to
upgrade 11i transactions to R12 with correct
taxes and rates
- Test changes to upgraded transactions
46
March 26, 2012
What does this look like in Ebiz Tax

A tax regime is created for each operating unit defined in 11i. Tax regimes
are named as 2 digit country code (from the Operating Unit Address)
TAX, (ex: US-TAX) and hold the tax setup that has been upgraded
Regimes created for use with integration partners such as Taxware and
Vertex have a slightly different naming convention and are typically upgraded
as "US-Sales-Tax-101"
A Tax is created for each tax code
A Tax Status is created for each tax code
A Tax Rate is created for each tax code
Tax codes are created and stored in a lookup table as "Output" tax
classification codes for O2C and Input for P2P
The tax regime has a "subscription" defined to the operating unit(s) where
taxes are to be calculated for the regime Country.
A Tax "Rule" is then created as a "Direct rate rule". This simple rule hardcodes the relationship between the tax classification code and the tax, tax
status and tax rate. When a transaction is entered and the user picks the tax
classification code, the direct rate rule automatically retrieves and associates
each of these items to the transaction and does the tax calculation
47
March 26, 2012
Tax Groups
Similar to tax codes except in a few key areas
In both cases the user enters the tax
classification code
The key difference is that the Direct Rate rule
that is created has additional formulas that are
used to determine when each of the underlying
tax rates should apply
48
March 26, 2012
Locations Based Taxes

Jurisdictions are migrated for these records and
are associated to tax rates
Each Tax Rate will have an associated
jurisdiction that includes the state, county and
city/postal code
These jurisdictions are linked to geography
records that tie back to actual registered location
in the TCA
As in 11i, Location based taxes calculate using
the jurisdiction and do not require specific tax
codes
49
March 26, 2012
What is the STCC?

After the upgrade, the system will set "Configuration
Owner Tax Options" for each product and event class
(e.g. Invoices, Credit Memo, etc). This will be set as
"Standard Tax Classification Code" or STCC following an
upgrade
Combined with the Direct Rate Rule that are created
during the 11i upgrade result in a unique branch of code
to be called when calculating taxes
R12 "Fresh" setup uses the "Determine Tax Regime" tax
determination method not STCC
See MOS ID 1062897.1 Case Study: How to Switch
From an Upgraded Tax Regime to a New Tax Regime Canada HST example
50
March 26, 2012
Tax Location Flexfield

In release 12, the tax location flexfield has been
replaced by the TCA geography hierarchy
Geography and Tax validation must be reviewed and
configured to meet organizational needs
Critical to configure address validation early in the
upgrade process. Failure to do so will cause issues
if any customer data is entered or imported. This is
particularly relevant if migrating data from a nonOracle legacy system into R12
State, County and City must all be defined in TCA for
US-based setups where the organization taxes at all
three levels
51
March 26, 2012
Exemptions
Exemptions are migrated and have much the same
capabilities
In 11i
- Exemption records linked to the customer or ship to
customer site record
In R12
- Exemption records tied to the Party or ship-to Party site
With the broader adoption of the TCA structure to

include Vendors and Employees, this is an important
distinction that should be noted if you define any
custom reports or query base tables to report on
exemptions
52
March 26, 2012
Restrictions on Migrated Setups

If the configuration owner tax options are set to
STCC, users CANNOT
-
Create new tax rules

Modify or add to existing tax rules
Modify existing tax formulas
Newly implement partner integrations such as Vertex or
Taxware
- Set up new tax groups
- Patch 9723745 allows users to add new tax rates to an
existing tax rate (not create new rates). For example if
a jurisdiction rate has changed from 5% to 6%, the old
rate could be end dated and create the new rate
53
March 26, 2012
Pro/Cons for Upgrading or Fresh

Implementation of Regimes
Upgraded Regime
- Faster
- Exemptions are regime specific so a new regime
means all new exemptions must be defined
- Few changes for the end user
Fresh Implementation
- More flexibility to add/remove tax codes
- 11i PL*SQL rules do not migrate
- Able to automate many of the tax decisions through the
creation of tax rules
54
March 26, 2012
SUMMARY
Helpful Documentation
E-Business Tax (EBTax) Information Center [ID 1117544.1]
Information Center: Use E-Business Tax Release 12 and
later [ID 1336679.2]
EBusiness Tax Seed Data [ID 463001.1]
Case Study: Setup R12 E-Business Tax (EBTax) for Canada:
Includes 2010 HST Changes [ID 577996.1]
E-Business Tax For Oracle Purchasing [ID 464243.1]
eBusiness Tax Release 12 Error Messages: Causes and
Actions [ID 744185.1]
How to obtain debug logfile for R12 E-Business Tax (EBTAX)
[ID 417238.1]
56
March 26, 2012
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
57
March 26, 2012
Release 12 Books by Rolta Employees
The ABCs of Workflow for

Oracle E-Business Suite
Release 11i and Release 12
The Release 12 Primer

Shining a Light on the
Release 12 World
Available from Amazon.com,

Barnes & Noble (bn.com)
Lulu.com
58
March 26, 2012
Questions?
Thank You !!
Karen Brownfield
Karen.Brownfield@roltasolutions.com
Alyssa Johnson
Alyssa.Johnson@roltasolutions.com
59
March 26, 2012

Brown Field e Business Tax Not Sexy But Smart

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E-Business Tax Engine Not Sexy but Smart

Karen Brownfield and Alyssa Johnson

Understanding the Past: Oracle Standard Tax

Rolta / Karen Brownfield / Alyssa Johnson Proprietary & Confidential

March 26, 2012

UNDERSTANDING PRE-R12 STANDARD TAX

Standard Tax - Basics

Rolta / Karen Brownfield / Alyssa Johnson Proprietary & Confidential

March 26, 2012

R12 E-BUSINESS TAX ENGINE

Global Control with E-Business Tax

Extended control for products-based tax

Simplified Tax Configuration

Rolta / Karen Brownfield / Alyssa Johnson Proprietary & Confidential

March 26, 2012

BENEFITS AND FEATURES

Ease of Configuration and Control

March 26, 2012

New Features with E-Business Tax

Rolta / Karen Brownfield / Alyssa Johnson Proprietary & Confidential

March 26, 2012

Service Oriented Architecture

Repository, Reports, Dashboards, etc.

Tax Regimes Place of

Rolta / Karen Brownfield / Alyssa Johnson Proprietary & Confidential

March 26, 2012

E-Business Tax Definitions

FOUNDATION FOR E-BUSINESS TAX ARCHITECTURE

Rolta / Karen Brownfield / Alyssa Johnson Proprietary & Confidential

March 26, 2012

Party Tax Profile - Required

Rolta / Karen Brownfield / Alyssa Johnson Proprietary & Confidential

March 26, 2012

Tax Profile Party Types

Rolta / Karen Brownfield / Alyssa Johnson Proprietary & Confidential

March 26, 2012

Tax Regimes - Required

Rolta / Karen Brownfield / Alyssa Johnson Proprietary & Confidential

March 26, 2012

Next Step? Create Tax

Rolta / Karen Brownfield / Alyssa Johnson Proprietary & Confidential

March 26, 2012

March 26, 2012

Next Step? Create Tax Status

Rolta / Karen Brownfield / Alyssa Johnson Proprietary & Confidential

March 26, 2012

Rolta / Karen Brownfield / Alyssa Johnson Proprietary & Confidential

March 26, 2012

Next Step? Create Tax Rate

Rolta / Karen Brownfield / Alyssa Johnson Proprietary & Confidential

March 26, 2012

Tax Rates and Accounts

March 26, 2012

Tax Rates and Accounts

Rolta / Karen Brownfield / Alyssa Johnson Proprietary & Confidential

March 26, 2012

Next: Tax Rules

Rolta / Karen Brownfield / Alyssa Johnson Proprietary & Confidential

March 26, 2012

Tax Rules Build - Guided

Oracle-guided setup for building Tax Rules

March 26, 2012

Tax Rules Build Guided (cont)