eTax for Public Sector• Oracle does perform basic validation, but it does not stop you creating...

eTax for Public SectoreTax for Public SectorChris Edwards - Prōject (EU) Ltd

07/03/2013

Introduction to Prōject

• Formerly Projected Consulting

• Formed in 2000

• Over 200 years combined Oracle experience, across all industries

• Oracle Specialised Gold Partner

• Experts in Enterprise Resource Planning (ERP) and Business Intelligence (BI)(BI)

• Unique expertise in Oracle Projects

• Dedicated state of the art training centre

• Security Cleared personnel

Services

• Prōject provide the following services to our clients:-

- Consultancy

- Managed Services and Support

- Programme and Project Management

- Reporting

- Technology- Technology

- Financing

- Licences

- Training

Directorates

• Prōject comprises of the following Directorates:-

- Project Portfolio Management (PPM)

- Enterprise Resource Planning (ERP)

- Business Intelligence (BI)

- Enterprise Performance Management (EPM)

- Programme and Project Delivery- Programme and Project Delivery

- Business and Change Management

Accreditations

• Prōject are proud to be an Oracle specialised partner in:

- Oracle Business Intelligence Foundation Suite 11g

- Oracle Business Intelligence Applications 7

- Oracle E-Business Suite R12.1 Projects

Awards

• Recognised in 4 categories in the UK Oracle User Group (UKOUG) “Partner of the Year Awards 2012/13

• Partner of the Year in the Public Sector category – Gold

• Partner of the Year in the Business Intelligence (BI) • Partner of the Year in the Business Intelligence (BI) category – Silver

• Partner of the Year in the E-Business Suite category –Silver

• Partner of the Year in the Primavera/Projects category –Silver

About the Speaker

• CIMA Qualified

• 15 years Oracle Experience

• Certified GL and AP Implementation Specialist

• Background in Manufacturing, Retail, Financial Services and Public Sector

• Security Cleared• Security Cleared

• http://uk.linkedin.com/in/christopheredwardsChris

EdwardsFunctional

Consultant

Introduction

• What is eTax?

• Basic Setup – Tax Configuration

• Recommended Setup – Introducing Rules

• Advanced Setup - Making eTax Work For You

• Avoiding Pitfalls

• Migration and Patches• Migration and Patches

What is eTax?

• Features

- Centralised Tax Handling

- Rules Based Engine

- Central Tax Transaction Repository

- Tax Simulator

• Benefits

- Remove user error

- Automate for increased efficiency

- Improved compliance

- Improved Reporting and Reconciliation

Implementation Considerations

• Dependent on

- Type of company

- Nature of business

- Parties/Products/Transactions

- Tax regulations

• Tax can be as simple or a complex as you require

Basic Set Up

Navigating eTax

Pre-requisites

• Define

- First Party Legal Entity

- Operating Units (if required)

- Tax Authority (HMRC)

- Suppliers (optional)

- Customers (optional)- Customers (optional)

• Create Tax Profiles

• First Party Legal Entity (Required)

• Tax Authority (HMRC) (Required)

• 3rd Parties/OU (optional)

Create Party Tax Profiles

Regime to Rate Flow

Regime Tax RateTax Tax Status

GB Tax GB VAT Standard

Reduced

20%

5%

Intra EU

Zero Rated

Exempt

0%

0%

0%

Create a Tax Regime

Create Tax Regime

Regime to Rate Flow



Reduced

20%

5%

Intra EU

Zero Rated

Exempt

0%

0%

0%

Create a Tax

Tax Recovery Controls

Regime to Rate Flow



Reduced

20%

5%

Intra EU

Zero Rated

Exempt

0%

0%

0%

Create a Tax Status

Regime to Rate Flow



Reduced

20%

5%

Intra EU

Zero Rated

Exempt

0%

0%

0%

Create a Tax Rate

Tax Rate - Controls

Optional – Create a Jurisdiction

Create Recovery Rates

11i Defaulting Hierarchy Model

• Update Migrated Tax Setup

• Create New Tax Setup based on the 11i model

Recommended Set Up

Recommended Set Up

• For UK VAT registered company dealing with:

- Domestic transactions

- Intra-EU transactions

- Extra-EU transactions

Tax Rules:Tax Rules:

Automatically evaluate a number of conditions and determine where the transaction should be taxed, whether tax is applicable, the appropriate tax status and calculate the tax amount (and recoverable tax amount)

Tax Rules are used to:

• Determine Place of Supply

• Determine Tax Applicability

• Determine Tax Registration

• Determine Tax Status

• Determine Tax Rate• Determine Tax Rate

• Determine Taxable Basis

• Calculate Tax Amounts

• Determine Recovery Rate

eTax Rules

eTax Rules

• Example – Place of Supply

"If you purchase goods from a VAT-registered business in another European Community country and the goods are removed to the United Kingdom, you may be required to account for VAT in the United Kingdom on the acquisition may be required to account for VAT in the United Kingdom on the acquisition of the goods."

Tax Rule Conditions – Condition 1

"If you purchase goods from a VAT-registered business in another European Community country and the goods are removed to the United Kingdom, you may be required to account for VAT in the United Kingdom on the acquisition of the goods."

- The tax rule is limited to purchase transactions- The tax rule is limited to purchase transactions

• Condition

- Transaction Business Category = Purchase Transaction



- The tax rule requires that the supplier be registered in another European - The tax rule requires that the supplier be registered in another European Community country.

• Condition

- ‘Ship From’ registration status = Registered in another EC country



• The tax rule is limited to the Goods product type. • The tax rule is limited to the Goods product type.

• Condition

- Product Type = ‘Goods’


"If you purchase goods from a VAT-registered business in another European

Community country and the goods are removed to the United Kingdom, you may be

required to account for VAT in the United Kingdom on the acquisition of the goods."

- The tax rule refers to goods delivered to the United Kingdom from another

country in the European Community. country in the European Community.

• Conditions

- ‘Ship From’ Country = EEC

- ‘Ship to’ Country = UK

- ‘Ship From’ Country <> ‘Ship to’ Country

Tax Rules - Condition Sets

• If these conditions are true the Place of Supply is the ‘Ship to Location’, if this is not populated use the ‘Bill to Location’

TCA and the EU Tax Zone

• Trading Community Architecture Hierarchy

- Defines the relationship between geographical boundaries, e.g. In the US City > County > State

- Country is the highest level that can exist

• Custom Zones• Custom Zones

- User defined

- Enable for tax transactions

- Removes the need to define the same rule for multiple countries (e.g. France, Germany etc)

Create the EU Zone

Advanced Set Up

Create a Recovery Rule

Define the Condition

Select the Recovery Rate

Enable and Prioritise

Save the rule sets

Assign the rule to a Tax Rate

Example Invoice: Two lines, one recoverable

Invoice Example: Calculated Tax

Invoice Example: Distributions

Fiscal Classifications

• Defining Fiscal Classifications

• Party

- Customer, suppliers

• Product (not inventory dependent)• Product (not inventory dependent)

- Nature of the product, e.g. Zero Rated

- Intended use of the product e.g. Research

• Transaction

- Samples, Late fees

Fiscal Classifications Types

• Define a Non-Inventory category you wish to differentiate on e.g. Zero Rated Products

Fiscal Classifications Codes

• Define specific codes for products you need to classify e.g. Food, Children’s clothes

Creating a Hierarchy

Using Fiscal Classifications in Tax Rules

• Once created, Fiscal Classifications can be used in your tax rules

• Condition

Using Fiscal Classifications in Tax Rules

• Result:

And finally...

• Pitfalls

• Patches

• Upgrades

Pitfalls to Watch Out For

• Oracle does perform basic validation, but it does not stop you creating conflicting rules!

• Be careful when entering effective dates, some invoices may be quite old!

• Be careful when defining content sets, they can’t be amended when referenced by Tax

Rules Rules

• Don’t enable a Tax until you’ve finished all the configuration

• When adding new rates remember to amend the default flag and date range on the

‘details’ page

Upgrading from 11i

• 11i tax configuration will migrate

- Defaulting hierarchy will migrate

- 11i Organisations classified as GRE/LE’s will be migrated as Legal Entities and main establishments

- Operating Units and Inventory Orgs associated with the GRE/LE will be migrated as establishmentsmigrated as establishments

- Legal Entities will also be migrated as parties in the Trading Community Architecture (TCA)

• Recommended that this is replaced with a fresh implementation to leverage functionality benefits

eBusiness Tax Seed Data [ID 463001.1]

• Applies to Oracle E-Business Tax - Version 12.0.1 and later

• Three levels of content

- Significant (includes UK)

- Reduced

- Documentation only- Documentation only

• The patch was released on 01/10/2007 and is not maintained - The current rate of VAT needs to be amended!

• There are still manual steps to complete

Conclusion

• Complete the basics - Regime to Rate Flow

• Create the recommended tax rules

• Make eTax work for you!

• Resources

- ‘Introduction to eTax’ blogs – www.project.eu.com

eTax for Public Sector• Oracle does perform basic validation, but it does not stop you creating...

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