Project Partners Blog

Oracle E-Business Tax Implementation in Release 12

By Ravi Shankar, PgMP, PMP, PMI-RMP and PMI-SP

Oracle E-Business Tax delivers comprehensive functionalities that address the unique requirements of tax calculations, processing, accounting and reporting requirements in the different feeder applications. No longer are tax features defined and configured in the respective modules and applications such as Oracle E-Business Suite Payables, Oracle Receivables, and Oracle Projects.  The Oracle E-Business Tax module provides for a central repository to define and hold the tax contents and records for the requirements of the modular applications. Tax services are provided to the needs of e business suite through a two way effective interchange of transaction and tax data between the applications and the robust tax engine that resides in Oracle E-Business Tax.

Oracle E-Business Tax provides a one stop solution for managing the transaction-based tax requirements. It is configurable and scalable for adding and maintaining country specific tax content. It provides for key functionalities in the following areas:

  • Sales and Use Tax in Procurement
  • Self Assessed Tax in Payables
  • Multiple Registrations
  • Deferred tax in AP
  • Enhanced handling of tax on Freight
  • Enhanced Exemptions & Exceptions
  • Multiple inclusive and compounding taxes
  • Quantity based rates in procurement

Tax Configurations are handled through the definition of, and relationship with, Tax Regimes, Taxes, Tax Status, Tax Jurisdiction, Tax Recovery Rates, Tax Rates and Tax Rules. These are defined through an effective user interface in guided workflow logic. Through this Regime to Rate Flow, the entire tax configurations are defined and the tax enabled for transaction processing. Ownership of the Tax Regime is associated to a party defined in TCA. This party can be the legal entity or the Operating Unit. Tax Determination Factor is the key building block of E-Business Tax. Characteristic and transaction attributes of Party, Product, Place, and Process (Called as 4P’s) drive the tax calculations at run time.

E-Business Tax supports integration with 3rd party tax content providers through Service Subscriptions. Currently, Vertex Inc and Taxware, LP are the approved tax service providers. This includes interfaces and uploads for tax rates based on jurisdictions and locations. E-Business Tax provides for preserving previous releases’ tax configurations and hierarchy rules that were defined in the respective modules. The upgrade process retains them and users can continue to leverage those configurations. It has to be implemented for making changes to these rules in the upgraded implementation.

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