Oracle R12 – Oracle EBS Tax Module Overview

•    Oracle E-business tax is a new product in R12.
•    It provides the infrastructure for transaction tax knowledge management and delivery using a global system architecture that is configurable and scalable for adding country-specific tax content.
•    It is a single point solution for managing transaction-based tax.
•    Uniformly delivers tax services to all E-Business Suite business flows through one application interface.
•    It Consists of a tax knowledge base, a variety of tax services that respond to specific Tax events, a set of repositories (for tax content and tax recording) that  allows customers to manage their local tax compliance needs in a proactive  manner, as well as the ability to integrate with external tax content providers  through a single integration point.

Features of E-Business Tax include:
•    Date affectivity on your tax configuration.
•    Tax simulator which enables you to test your tax configuration.
•    Classify your tax exceptions:
– Item.
– Intended use.
– Place of supply.
•    Look for commonalities:
– Define a classification rule to apply to many suppliers.
– Define a classification rule to apply to many suppliers.

E-Business Tax Setup Steps:

E-Business tax Setup Steps

Tax Authority
“A government entity that regulates tax law, administers, or audits one or more taxes”.

Tax Regime
“The set of tax regulations that determine the treatment of one or more taxes administered by a tax authority”
Examples of a tax regime include:
•    A sales and use tax in the United States includes rules for state, county, and city sales and use taxes.
•    An excise tax regime in India includes rules for excise tax and additional excise tax.
•    A VAT tax regime in Argentina includes rules for standard VAT, additional VAT, and perception VAT.

“A distinct charge imposed through a fiscal or tax authority”
Examples of a tax include VAT for the United Kingdom and TVA for France.

Tax Jurisdiction
“A geographical area where a tax is levied by a specific tax authority or where a specific tax rate applies”
Examples of tax jurisdictions include:
•    The tax jurisdiction for VAT in Germany is the country of Germany.
•    The tax jurisdiction for a San Jose city tax is the City of San Jose, California.
•    The tax jurisdiction for Provincial Goods and Services tax (PST) in Canada is a particular Province, such as Ontario or British Columbia.

Tax Status
“The taxable nature of a product or service in the context of a transaction for a tax type”
Examples of a tax status include taxable standard rate, zero rated, exempt, and non-taxable. A tax status is similar to the concept of the tax type definition used within Payables and receivables in releases prior to Release12.

Tax Rate
“The rate specified for a tax status in effect for a period of time. You can express the tax rate as a percentage or as a value per unit quantity”
An example of a tax rate is 7.5% for a state sales and use tax.

Recovery Rate
The rate of input tax that is allowed to be recovered or offset against output tax. The recovery rate is applicable to VAT taxes. For example, organizations that only produce VAT applicable goods and services can use 100% recovery rate on most purchases.
Organizations that produce VAT exempt goods and services, for example, financial institutions, have a 0% recovery rate.

Operating Unit Tax Accounts
The tax accounts that the system uses to post the tax amounts derived from your transactions.
The tax accounts you define serve as default accounting information for taxes, tax rates, tax jurisdictions, and tax recovery rates.


One thought on “Oracle R12 – Oracle EBS Tax Module Overview

  1. Hi Shiv
    I went through your TAX module overview, and it was really interesting.
    Can you please help me on this
    For a Given Customer number, I want all tax rates (including history) and also split by STATE, COUNTY and CITY like this ..
    Note : 31-Dec-2199 will be the default end-date if it is NULL

    Customer City State Start Date End-date Total State County City

    040103 FAYETTEVILLE NC 01-Jul-2011 31-Dec-2199 7 4.75 2.25 0
    040103 FAYETTEVILLE NC 01-Sep-2009 30-Sep-2009 8 5.5 2.5 0
    040103 FAYETTEVILLE NC 01-Aug-2007 30-Sep-2008 6.75 4.25 2.5 0
    040103 FAYETTEVILLE NC 01-Oct-2009 30-Jun-2011 8 5.75 2.25 0
    040103 FAYETTEVILLE NC 01-Oct-2008 31-Aug-2009 7 4.5 2.5 0

    Let me know if there is any simpler way to achieve this.

    Also HZ_RELATIONSHIPS table, give some ideas, and how and when the records are created for the relationship ‘TAX’ and how do I equate to only one record, provided I have the object_id and I need to get the Subject_id to proceed further with the table zx_jurisdictions_b.

    Let me know if you need more info.
    Appreciate your time and help.



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