Oracle E-Business Tax provides a common model for setting up and using existing Release 11i tax data for tax determination and tax calculation. This includes tax data that was originally set up in Payables, Purchasing, Receivables, and Projects.
Note: This chapter discusses background information and user tasks that are required to manage migrated tax data using the E-Business Tax user interface. For a complete discussion of Release 11i data migration, please see the Oracle Applications Upgrade Guide: Release 11i to Release 12.
The E-Business Tax solution for Release 11i migrated data includes these features:
Migration of application-specific ownership of tax setup to the E-Business Tax shared ownership model for all Procure-to-Pay and Order-to-Cash transactions.
Migration of tax codes and rates (Payables tax codes and Receivables VAT taxes) to the E-Business Tax Regime-to-Rate flow.
Migration of existing tax codes and tax groups, and existing defaulting hierarchies, to E-Business Tax as tax classification codes.
Tax determination and tax calculation based on the tax classification code.
The Release 11i migration solution lets you begin using E-Business Tax according to your existing tax setup with a minimum number of changes. This solution allows for a gradual adaptation of the E-Business Tax setup and tax determination processes according to your needs. Once you complete the transition to E-Business Tax processes, you can disable the Release 11i migrated solution with no loss of service.
In Release 11i, each application owned and maintained its own tax codes and rates for use with its application-specific transactions. Because E-Business Tax provides a single source for all transactions for tax determination and tax calculation services, the ownership of the tax setup moves to the E-Business Tax shared ownership model. In this model all legal entities and operating units of the company can share the same tax setup, while individual operating units may need to own tax setup for specific requirements as defined by the tax authority.
Existing operating units with Release 11i tax setup migrate as party-specific configuration owners, with the operating unit owning the tax setup. If a Receivables or Projects tax setup contains location-based tax codes, then these tax codes migrate as part of the common configuration, with the global configuration owner owning the location-based tax setup.
If you designate an operating unit with migrated tax setup to use the subscription of the legal entity, you can still make use of the tax classification code model for tax determination and tax calculation. See: Tax Classification Codes in Oracle E-Business Tax.
In Release 11i, Payables held summary tax distributions and allocations without showing taxable amount details or tax line information. Procurement transactions did not carry explicit tax lines and distributions, and every transaction query was a recalculation.
In E-Business Tax, there are these improves to the management of transaction handling and display:
One single repository with detailed and fully-allocated tax lines.
Common single repository for tax distributions for Procure to Pay transactions.
Document level summary tax lines for Payables transactions.
Tax line and tax distribution IDs are stamped on Payables and Receivables tax lines for reconciliation with product transactions.
Tax line and tax distribution IDs from product transactions are carried to Subledger Accounting for account reconciliation.
Note: Tax lines existing on an 11i item line, that are migrated to R12 will be recalculated, however, no new tax lines can be added to the 11i migrated item lines.
In Release 11i, the application-specific tax code performed many tax-related functions. These included the tax type, tax rate, offset taxes, recovery rules, taxable basis determination, tax calculation, and maintenance of related tax accounts. The Receivables tax group let you combine tax codes to calculate multiple taxes on single taxable items. In keeping with the E-Business Tax setup, the functions of Payables and Receivables tax codes migrate to E-Business Tax records according to the E-Business Tax Regime-to-Rate model.
Note: For the Latin Tax Engine, tax regime codes are created based on the Tax Rule Set (global_attribute13) in AR_SYSTEM_PARAMETERS and taxes are created based on Latin Tax Categories. If you are using the Latin Tax Engine to calculate taxes, do not create new tax regimes and taxes, but continue to use the Latin tax categories, tax codes, and tax groups.
This table describes the major features of tax code migration.
| AP/AR Tax Codes | E-Business Tax Record |
|---|---|
| OU country + Tax Type | Tax Regime Code |
| Tax code name | Tax Code and Tax Rate Code (minus numeric identifiers) |
| All tax codes | Tax Status of value Standard |
Tax rate details:
| Tax Rate record |
| Location-based tax rates |
|
Tax account details:
| Tax Rate tax account record:
|
| Tax calculation details | Tax classification code |
| Tax group with tax compounding |
|
In Release 11i, you used the global descriptive flexfield to hold tax-specific information for Payables and Receivables transactions.
Release 11i global descriptive flexfield values migrate either as E-Business Tax entities or entity attributes. This table describes the migration of global descriptive flexfields to E-Business Tax.
| Global Descriptive Flexfield | E-Business Tax Destination |
|---|---|
| Tax Codes window |
|
| First and Third Parties | Attributes in party tax profiles, tax registrations, and party fiscal classifications |
| Items window | Product fiscal classifications |
| Payables Invoices window | Payables Invoices named columns |
| Payables Distributions window | Payables Invoice Lines named columns |
| Tax group with tax compounding |
|
Other Sources
Oracle E-Business Tax, Oracle Financials and Oracle Procurement Functional Upgrade Guide: Release 11i to Release 12