Configuring for TAX in Oracle Apps (Rel 12)

Supported Tax Software Versions - Following Vertex and Taxware Versions are Certified for Release 12:
Vertex Q Series 3.2
Taxware 3.5.0
Please be sure to mention to Vertex / Taxware that you would need file for Release 12. The data files have been changed in Release 12 and you can not use the same file as in Release 11i or before.

Loading Tax information into Rel 12i:
1) Please get datafile from tax partners (Vertex or Taxware) in R12 format .
2) Copy file to a Linux or Unix directory. Filename - *.dat. Please note that loading the datafile into interface table is a part of the Request Set and will not need to be done manually.
3) Click "Tax Managers" resp
4) Click "Schedule Request Set" link under "Requests"
5) Select "E-Business US Sales and Use Tax Import Program" from the "Request SetName" LOV
6) In the first stage,
a) Enter "File Location and Name" parameter (directory in which partner datafile has been placed, filename could be *.dat) e.g. "/home/user/zx/TMD2.dat" ,
b) select "2" (for Taxware) or "1" (for Vertex) for the "Tax Content Source" parameter,
c) and select a Tax Regime Code (new or migrated) for "Tax Content Source Tax Regime Code" parameter.
7) Click "Next" twice to submit the request.
8) Check the status of programs
9) After completion, data will be loaded into TCA Geography model and EBTax entities - Tax, Status, Rates, Jurisdictions.

R12 Oracle E-Business Tax Configuration (By Mariluci Pereira - Metalink)
1. Basic Tax Configuration:
Tax Definition: comprises the tax data that you set up for each tax regime and tax that your company or institution is subject to. The Tax Authority designates the regulations and rates that apply to the tax regime.

Required Task List:
a) External Dependencies
1. Create First Party: Legal Entity and Establishments
2. Create Reporting and Collecting Tax Authorities

b) Tax Configuration
1. Create Tax Authorities Party Tax Profiles
2. Create Tax Regimes
3. Create First Party Legal Entity Party Tax Profile
4. Create Tax
5. Create Tax Status
6. Create Tax Jurisdictions
7. Tax Rate

2. Managing Party Tax Profiles:
The configuration tier identifies the factors that participate in determining the tax on an individual transaction. These “taxability” factors are: party, product, place and process.

3. Configuration Owners and Service Providers:
a) Tax Configuration Ownership
b) Tax Configuration Options
c) Configuration for Taxes and Rules
d) Configuration for Product Exceptions
e) Service Subscriptions
f) Legal Entity and Operating Unit Configuration Options
g) Event Classes
h) Configuration Owner Tax Options

4. Fiscal Classifications:
Fiscal classifications provide tax determination values for situations where the party, product, or transactions are factors in tax determination. You set up a fiscal classification type to identify a category of fiscal classification that has a potential tax implication; you assign fiscal classification types to tax regimes and taxation countries. You set up fiscal classification codes under a fiscal classification type to provide additional granularity to a particular fiscal classification category. When creating tax rules, you use fiscal classification types as determining factors and fiscal classification codes as condition set values.

5. Setting Up Tax Rules:
You create tax rules by translating the tax regulations of a tax authority into determining factors and tax conditions that the E-Business Tax tax rules engine uses to evaluate the applicability of a tax on each transaction line. Tax rules determine: the applicability of a tax; the place of supply and tax jurisdiction of the transaction; the tax registration; the tax status and tax rate; the recovery rate (if applicable); and the taxable basis and tax formula to use in calculation.

6. Setting Up Tax Rules – Determining Factors:
Determining factors are the key building blocks of your tax rules. They are the variables that are passed at transaction time or derived from information on the transaction. Determining factors fall into four groups, namely: Party, Product, Place and Process. A determining factor is an attribute that contributes to the outcome of a tax determination process, such as a geographical location (place) or tax registration status (party). Determining factors can be used in tax rules, taxable basis formula, and tax regime determination.

Please read the Metalink whitepaper to get detailed step by step instruction on how to setup each of the above configurations in Oracle Apps.

Reference Notes:
Metalink Doc ID’s = 461084.1, 552390.1, 466575.1, 456310.1