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EBTax Implementation Case


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Slide deck summarizes implementation of Oracle EBTax for various EU Regimes, and challenges/limitations therein. Applies to Oracle R12.1.3 version.

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EBTax Implementation Case

  1. 1. Oracle EBTax Implementation ( A Case Study for EU Regimes) - Donald Fernandes 2012
  2. 2. About Company ABC • Public Internet-services based Company • US headquarters with Int’l Operations • Oracle R12.1.3 Financials and HRMS • 50 End-Users + 5 Power-Users (Oracle)
  3. 3. Agenda • Business Requirements • Implementation • Business Process Changes • Reporting • Challenges and Limitations • Next Steps and Q&A
  4. 4. EBTax: Business Requirements • Maintain Tax Rates for specific EU Jurisdiction • Record VAT ID for eligible Customers • Record VAT Rate on AR Invoices • Record VAT Rate on AP Invoices • Print VAT details on AR Invoices • Automate Accounting for Input and Output VAT • Generate regulatory reports (example VIES) • Perform AR Invoice Adjustments for Tax
  5. 5. Implementation Summary
  6. 6. Implementation: EBTax Basics Debut Platform R12 Current Patchset Level 12.1.3 Application Short Name ZX Subscribing Oracle Modules AR, AP, PO, GL, TCA, INV Seeded Oracle Responsibilities Tax Managers Tax User
  7. 7. Configuration Specifications • Global Ownership of EU Tax Regimes • Multiple EU Tax Authorities • One Tax Regime, Jurisdiction per EU Country • Multiple Legal Entities per Jurisdiction • Manual Maintenance of Tax Codes and Rates • Legal Justification Message Text • Allowance for Manual Tax Rate Overrides • Integration with AP and AR Transactions • Provision for Tax Recoverability
  8. 8. EBTax Data Model
  9. 9. Extensions (to Standard EBTax)
  10. 10. Extensions Summary • Automated Computation of Tax • Generation of Regulatory VIES Report • Third-Party determination of Tax Code for standard AutoInvoice program • Capture Customer VAT Id within standard Customer Interface program • Printing of appropriate LJM on Customer Invoices
  11. 11. Automated Tax Computation Tax Determination Factor Set Tax Condition Set
  12. 12. Regulatory VIES Reporting • Data Sourced from Receivables • Quarterly and Annual Versions • Custom Concurrent Program w/ XML Output • Electronic Filing
  13. 13. Autoinvoice Plug-in Impacted Interface Columns LINE_TYPE=TAX TAX_RATE_CODE TAX TAX_RATE
  14. 14. EU Invoice Printing
  15. 15. Business Process Change Highlights
  16. 16. Business Process Changes • Offline Validation of Customer VAT ID • Determination of VAT Codes for Receivables • Regulatory Reporting of Output VAT for VIES • Internal Reconciliation of Output and Input VAT, using standard Financial Tax Register EBTax report • Manual Maintenance of VAT Tax Rates by Jurisdiction • Tax-Only Adjustment in Receivables
  17. 17. Business Process Changes • Validation of Customer VAT ID
  18. 18. Business Process Changes • AP Invoice Validation, Accounting, Application
  19. 19. Business Process Changes • Tax-Only Receivable Adjustment
  20. 20. Report Listings • Financial Tax Register • VIES Reports • Exception Reports
  21. 21. EBTax: Challenges and Limitations Does not replace 1099 Tax Processing and Reporting Does not provide Withholding Tax functionality Does not provide interface to upload Tax content data Does not compute Payroll Tax No public APIs to incorporate custom Tax Rules Out-of-box cannot meet all statutory Reporting Needs Technical Data Model does not adhere to EBS standards Overall design is too “location-centric” Most configurations are irreversible; only may be end- dated
  22. 22. Next Steps • Automated Validation of Customer VAT • Automated update/load of VAT Rates • Custom Reports for detecting Taxation exceptions • Record Customer Tax Exemptions • Automated Self-Assessment for Taxes on Payables Invoices