implementing tax in EBS - receivables.ppt

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Oracle E-Business Suite R12.1 Accounts Receivables Essentials Partner
Boot Camp Training Courseware

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Key Content Contributors
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© 2009 Oracle Corporation – Proprietary and Confidential

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© 2009 Oracle Corporation – Proprietary and Confidential
•Order to Cash Lifecycle overview
•Overview of Oracle Receivables Process
•Managing Parties and Customer Accounts
•Process Invoices Using Auto Invoice
•Process Invoices
•Bill Presentment Architecture
•Credit Management
•Implement Customer Invoicing
•Receipts
•Implement Receipts
•Tax Processing
•Period Closing Process
•Annexure
Bootcamp Objectives

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© 2009 Oracle Corporation – Proprietary and Confidential
Section Objectives
E-Business Tax Architecture Overview
Receivables Tax Process Overview
Receivables Setup Steps for Tax
Manage Tax Accounting and Tax Adjustments

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E-Business Tax Architecture Overview
Oracle E-Business Tax
Tax Services Request Manager
Services
Tax
Content
Services
Tax
Determination
Services
Tax
Administration
Services
Partner
Tax Content
Interface
Content
Repository
Record
Repository
Partner
Tax Services
Interface
Tax Partner
Tax Content Tax Services
E-Business Suite
Transaction Tax DataTransaction Data
For Oracle employees and authorized partners only. Do not distribute to third parties.
© 2009 Oracle Corporation – Proprietary and Confidential

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For Oracle employees and authorized partners only. Do not distribute to third parties.
© 2009 Oracle Corporation – Proprietary and Confidential
Section Objectives
E-Business Tax Architecture Overview
Receivables Tax Process Overview
Receivables Setup Steps for Tax
Manage Tax Accounting and Tax Adjustments

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Receivables Tax Process Overview
Invoice
Tax Rate Code
Tax Rules
Transaction with
Tax Distributions
Receivables
Tax Rules Engine
Receivables
For Oracle employees and authorized partners only. Do not distribute to third parties.
© 2009 Oracle Corporation – Proprietary and Confidential

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Tax Overview
•You use E-Business Tax to set up and maintain these taxes:
–Value Added Tax (VAT) - Imposed on the value added to goods or
services at each stage of their supply.
–Goods and Services Tax (GST) - Sales tax levied on many consumer
products and professional services.
For Oracle employees and authorized partners only. Do not distribute to third parties.
© 2009 Oracle Corporation – Proprietary and Confidential

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Tax Overview
•E-Business Tax processes Oracle Order Management and Oracle
Receivables Output Tax, which is charged on the supply of taxable
goods and services on customer invoices or revenue items. You
should report Output Tax whenever you account for sales.
•E-Business Tax processes Oracle Payables and Oracle Purchasing
Input Tax, which is paid on supplier invoices.
•Amount Due to the Tax Authority consists of Output Tax on customer
invoices minus any Recoverable Input Tax on supplier invoices.
For Oracle employees and authorized partners only. Do not distribute to third parties.
© 2009 Oracle Corporation – Proprietary and Confidential

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Value Added Tax (VAT)
•Value Added Tax (VAT) is imposed on the supply of goods and
services paid for by the consumer, but collected at each stage of the
production and distribution chain.
• The VAT charged on a customer invoice is called Output Tax.
•Any VAT paid on a vender invoice is called Input Tax.
•The amount due each period can be : Amount Due = Output Tax –
Input Tax.
For Oracle employees and authorized partners only. Do not distribute to third parties.
© 2009 Oracle Corporation – Proprietary and Confidential

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For Oracle employees and authorized partners only. Do not distribute to third parties.
© 2009 Oracle Corporation – Proprietary and Confidential
Section Objectives
E-Business Tax Architecture Overview
Receivables Tax Process Overview
Receivables Setup Steps for Tax
Manage Tax Accounting and Tax Adjustments

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Receivables Tax Setup
•In order to manage tax calculation on Receivables invoices, setup is
required in E-Business Tax as well as Receivables modules.
•E-Business Tax setup:
–Regime-to-rate flow
–First and third party tax profiles
–Configuration options
–Tax registrations
–Tax exemptions
–Profile options
–Service subscriptions
–Tax rules
•Receivables setup:
•
Transaction types
•
AutoAccounting
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© 2009 Oracle Corporation – Proprietary and Confidential

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Receivables Tax Setup: Transaction Types
To automatically
assign a default
tax classification
on transaction
lines, select the
Default tax
classification
box.
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© 2009 Oracle Corporation – Proprietary and Confidential

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Receivables Tax Setup: Tax Exemptions
Assign
exemption
on the
customer or
customer
site
•Set up tax exemptions in E-Business Tax for customers and customer sites that are
exempt from a particular tax
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© 2009 Oracle Corporation – Proprietary and Confidential

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Receivables Tax Setup: AutoAccounting for Tax
For Oracle employees and authorized partners only. Do not distribute to third parties.
© 2009 Oracle Corporation – Proprietary and Confidential

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Receivables Tax Setup: Profile Options
•eBTax: Allow Manual Tax Lines: Determines which users can enter
manual tax lines on the transaction for the tax setups that allow this update.
•eBTax: Allow Ad Hoc Tax Changes: Determines which users can make
ad hoc tax changes on the transaction line, such as selecting a different tax
status or tax rate.
•eBTax: Allow Override of Customer Exemptions: Controls the display of
the Tax Handling field on the transaction line. You use the Tax Handling field
to apply and update customer tax exemptions on transactions.
•eBTax: Allow Override of Tax Classification Code: Controls whether
users can update the tax classification code that is defaulted to the transaction
line. You only set this profile option if you intend to calculate taxes using tax
classification codes and the Direct Tax Rate Determination tax rule.
•eBTax: Invoice Freight as Revenue: Controls whether to consider freight
amounts as taxable line items.
•eBTax: Inventory Item for Freight: Lets Order Management use an
Inventory item defined as Freight on Receivables transaction lines.
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© 2009 Oracle Corporation – Proprietary and Confidential

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Tax Accounting Overview
Set up Tax Accounting Information for Tax
Rate Codes and Receivables Activities
Earned
Unearned
Adjustments
Discounts
Miscellaneous
Cash
Late charges
Deferred Tax
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© 2009 Oracle Corporation – Proprietary and Confidential

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For Oracle employees and authorized partners only. Do not distribute to third parties.
© 2009 Oracle Corporation – Proprietary and Confidential
Section Objectives
E-Business Tax Architecture Overview
Receivables Tax Process Overview
Receivables Setup Steps for Tax
Manage Tax Accounting and Tax Adjustments

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Tax Accounting for Deferred Tax
•Deferred tax recovery is an accounting method that defers the liability
of tax to the time that the invoice is paid, rather than when the invoice
is created.
•Set up for deferred tax recovery is done in E-Business Tax:
–Set the Allow Tax Recovery option for the applicable tax regime.
–Select Deferred as the default recovery settlement for the applicable tax
regime, tax, tax status, and tax rate records.
–Set up an Interim Tax Account in the Tax Accounts page.
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© 2009 Oracle Corporation – Proprietary and Confidential

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Define Receivables Activities
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© 2009 Oracle Corporation – Proprietary and Confidential

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Adjusting Tax on Invoices
Adjustment
entry with
Receivables
Activity
Approval limit
$500
Validation
process
Approved
or Pending
For Oracle employees and authorized partners only. Do not distribute to third parties.
© 2009 Oracle Corporation – Proprietary and Confidential