360894343-Oracle-Cloud-Fusion-Tax-12092016-V1-0.pptx

Copyright © 2016, DAZ Systems. All rights reserved.
Oracle Cloud Taxes
Compiled by
Santosh Pallerla
DAZZY Friday
12/092016

Agenda
 Fusion Cloud ERP - Indirect Taxes
 Transaction Tax Life Cycle
 Types of Indirect Taxes
 Application setup/ transactional components
 P2P / O2C Event Types – Tax Applicability
 Tax Rapid Implementation in Oracle ERP Cloud Key Setup Tasks
 Implementation Considerations
 Some questions to think
 Fusion Tax Limitations
 Third Party Tax Engine Integrations
 Q & A

Fusion Cloud ERP - Indirect Taxes
One Stop shop for Indirect taxes
Fusion Cloud offers solutions for various types of Indirect taxes
including
Transaction Taxes (Sales, Use, Rental, Lease and VAT)
Withholding Taxes
Other taxes like Payroll taxes etc., are covered separately in
respective product offering
Centralized tax services across applications
Automatic Tax calculation with manual overrides
Taxes are data driven
Fusion Tax engine supports different tax regulations and
legislations (Global)

Transaction Tax Life Cycle
Nexus, also called “sufficient physical presence,” is a legal
term that refers to the requirement for companies doing
business in a state to collect and pay tax on sales in that
state
Registration with Tax Authorities by companies (Legal
Entities or Business Units)
Manage Transaction taxes based on business process i.e.
Collect (O2C) or Pay (P2P) Taxes on Sales and Purchases
Verify Transaction Taxes
Reporting on Taxes (supports global tax reporting
requirements)
Filing Taxes with Tax Authorities

Types of Taxes
Sales and Use Tax
Recoverable & Non-Recoverable Tax
Deferred Tax
Tax on Freight
Duty Tax
Tax on Intercompany Movements
Inclusive or Exclusive Tax
Offset Taxes
Reporting Taxes

Application setup/ transactional components
which drive tax applicability
Taxes and Tax configuration are data driven. Data Quality of the
setup components determine correct tax applicability
Some of the application components which drive taxes
Parties (Customer, Supplier)
Places (Locations, Ship to, Ship from, Bill to, Bill from, LE’s, BU’s)
Processes & Products (Sales Orders, AR Invoices, Requisitions, PO’s, AP
invoices, Inventory, Transaction Events like Sales or Purchases)
Regime to Rate Setups, Configuration Owner Options, Party Tax
Profiles
 Exemptions (customer or Supplier), Exceptions (item), Business
Process behavior (intended use)
Defaulting Options, Rates etc

P2P Event Types – Tax Applicability
On the following P2P Events trigger Fusion Tax
Requisitions for Enterprise Tax
Purchase Orders and Agreements
Change Orders for Enterprise Tax
Standard Invoices
Prepayments
Expense Reports

P2P – Tax on Requisition

P2P – Tax on Purchase Order

P2P – Tax Lines on Purchase Order

AP – Invoice header Tax determinants

AP – Invoice Lines Taxes Region

AP – Edit Taxes

AP – Manage Tax Details

Invoice with Withholding Taxes

O2C Event Types – Tax Applicability
On the following O2C Events trigger Fusion Tax
Sales Orders
Invoices
Credit Memo
Debit Memo

O2C – Example of Transaction Determinants on
Sales Orders

O2C – Tax on Sales Orders

Confidential
MEETS THE CHALLENGE OF CHANGE
AR Invoice Header and Line Review

Confidential
AR Invoice with Tax Lines

Confidential
AR Tax Determinants

Other Products – Tax Applicability
Events that trigger tax other than P2P and O2C:
 Fusion Projects (Invoices)
 Intercompany (AR and AP Invoices)
 Supplier Portal Invoices (AP Invoices)
Sourcing – Quotes
Inventory

Confidential
Projects Invoice - Tax

Fusion Taxes and Interfaces
Tax Functionality in Interfaces (eg: AP or Autoinvoice etc.,)
Importing invoices which allow the system to calculate taxes
after import
Importing invoices by enforcing predetermined taxes on
transactions
 Important tax fields include (both on AP and AR)
Calculate Tax During Import Tax Regime Code
Tax Classification Code Tax
Ship-to Location Tax Status Code
Tax Control Amount Tax Jurisdiction Code
Location of Final Discharge Tax Rate Code
Intended use Tax Rate
Product Fiscal Classification Taxation Country

General Tax Report Categories
Category Report Name
Business Report Tax Audit Trial Report
Business Report Tax Register
Sales Tax Liability Report
Reconciliation Report Tax Reconciliation by Taxable Account Report
Reconciliation Report Tax Reconciliation Report
Legal Reports Use Tax Liability Report
Extracts Financial Tax Register
Payables Tax by Ledger Extract
Receivables Tax by Ledger Extract

Tax Rapid Implementation in Oracle ERP
Cloud
• Simple workbooks to define and upload tax configuration
• Spreadsheet templates use common lingo with prebuilt validations
and instructions
• Can add new configuration or download existing configuration,
update, and add changes by upload of spreadsheet templates

Rapid Implementation Spreadsheets
 Tax Configuration Workbook (Common
Configuration)
 Regime to Rates
 Independent Spreadsheets for Tax Regimes,
Taxes, Rates, Recovery Rates
 Tax Rules
 Tax Implementation Workbook (Organization-
Specific Configuration)
 Tax Registrations
 Subscriptions to Tax Regimes
 Party Tax Profiles: Including Registrations,
Classifications
 Tax Accounting
 Incremental configuration changes to
 Tax Jurisdictions
 Tax Rates and Recovery Rates
 Tax Rules
Rapid Implementation Spreadsheets
Transaction Workbooks
 Taxable Transactions (Online Spreadsheets)
 Purchase Transactions
 Sales Transactions
 Bulk Import of External Transactions (Offline
Templates)
 Transactions without tax
 Transactions with tax calculated in external
systems
 Transaction templates allow designation of tax-
decision criteria
 Supports both O2C and P2P Transactions
Refer to Oracle Enterprise Repository for relevant
templates
https://docs.oracle.com/cloud/latest/financialscs_gs
/FAUTX/FAUTX1461348.htm#FAUTX1461347

Simple Tax Content Experience
Tax Rapid Implementation Upload
1
Define Tax Configuration Workbook Content
Download from Manage Tax Regimes*
*Alternatively, use Oracle, tax partner, or implementer tax content.
2
Upload Tax Content & Enable Taxes
“Generate CSV File to Upload” button creates files for
upload. On successful completion, enable taxes for
transactions
3
Prepare & Upload Organization-Specific Configuration
Download the Tax Implementation Workbook for Tax Accounts,
Tax Registrations, Business Unit/Legal Entity Subscriptions

Key Setup Tasks: Fusion Tax Rapid Implementation

Key Setup Tasks: Fusion Tax Rapid Implementation (continued)

RI - Do's and Do nots during data preparation
1. Date must always be entered in YYYY/MM/DD format.
2. The decimal separator is a period "."
3. The data entered is case sensitive, the data entered is validated as is and pushed
into the system. Case usage as available in the regular UI is not provided in Excel
Workbook Template.
5. Always make sure that you get the latest excel workbook template
TaxConfigurationWorkbookTemplate.xlsm shipped by oracle for uploading rapid
implementation data.
6. Data sheets gets deleted after generating the CSV file.(The worksheets are not
deleted. They get hidden with some versions of Excel)
7.You can always unhide the data in worksheet by following the below steps and
view your data.
a. Right click on any of the visible work sheets.
b. Choose "Unhide..." from the popped up list of actions
c. Click on the worksheet that you want to unhide.
7. All LOV's are provided for user convenience. Addition of new values to the LOV
by the user are supported only if they exist in the system. User must verify the
valid values by clicking on the appropriate LOV in the regular user interface before
adding to the LOV.

Key Setup Tasks: Withholding Tax

Implementation Assistance
Oracle Tax Content Library
Netherlands
Belgium
France
Portugal
Spain
United Kingdom
Denmark
Poland
Austria
Germany
Sweden Italy
Slovakia
USA
Canada
Czech
Finland
Hungary
Ireland
Luxemburg
China Taiwan Singapore
Australia
New Zealand
Significant Predefined Tax
Content Countries
Limited Predefined Tax Content
Countries
Documented Tax Setup Countries
 Tax Content
delivered in Rapid
Implementation
Spreadsheets
 Using Rapid
Implementation,
content is easily
extended
 Jump start tax
implementation in
minutes
 Reach out to
Oracle Success
Manager assigned
to your customer
account for
content

Key Implementation Step before defining
Enterprise Structure
Taxes are applied based on Locations. Data Quality of
locations is key for successful tax implementations
Location data includes Customer addresses, Ship to
Locations (aka HR Locations) etc.,
If the Location elements are not setup properly then tax
will not apply accurately
Loading Geographies for US - is a best practice and key
implementation step all functional’s should follow before
setting up Enterprise Structure (including Locations)
Leverage US Geographies vertex updates to populate all
address elements

Navigate to Financials>Define Common Applications for Financials>Define Enterprise
Structures for Financials>Define Geographies
On the Task List and Tasks In the search Task query Load Geographies for US.
On the submission screen add the parameters.
Validate Input Parameters and Load Geography Information
Data Source: Vertex
File Location:
/u01/APPLTOP/fusionapps/applications/thirdparty/hcm/vertex/data/
File Name: oramast.txt
Run Pre Process
No parameters
Run Post Process
Data Source: Vertex
File Location:
/u01/APPLTOP/fusionapps/applications/thirdparty/hcm/vertex/data/
File Name: oramast.txt
Hit the Submit button and allow the process to complete successfully before
continuing. This will take a while to complete all stages/processes.

Implementation Considerations
1. Available from the Payables
setup tasks (or)
2. Common configuration
Withholding Tax Setup
1. Internal
 Global Configuration Owner, to share tax
setup across all Enterprise entities, with
overriding capabilities
 Regional Configuration Owner, to share tax
setup with other enterprise entities, typically
in the same region, also with overriding
capabilities
 Local Configuration Owner, not sharable tax
setup, only used by a specified Legal Entity or
Business Unit
2. External - Tax partner integration
infrastructure:
Tax Content
Tax Calculation Services
Configuration & Subscription Options
1. Generic box-oriented Tax
Reports
2. Common Reports applicable
for all countries
3. Legislative / Country specific
reports
Tax Reporting

Implementation Considerations
 Enable Geography elements in Address Formats to enforce
input of validated City, County, State and Zip code
information
Make sure Third party (vertex, CCH) tax content is updated
every month for accurate tax calculations
RI – Plan your setup data properly if its Voluminous based
on the relevant upload sheet to be used.
Advise client on transactional issues (eg Rounding etc.,)
which impact invoice validation
Be proactive on latest legislative changes which impacts
clients business (ex: GST uptake in India)

Job Roles & Associated Duty Roles
Job Role Description
Tax Manager Defines the tax policies and most efficient tax configuration. Sets
up relatively stable entities that seldom require updates, such as
tax regimes and taxes.
Tax Administrator Sets up technical areas and the integration with tax service
providers.
Tax Accountant Prepares and files tax returns and reports for an enterprise,
including country, federal, state, and local corporate, payroll, and
transaction taxes.
Tax Specialist Maintains tax configuration, especially the variable entities that
require periodic updates, such as tax rates and tax jurisdictions.
Reporting Parent Roles Associated Duty Roles
Tax Manager, Tax
Accountant, Tax Specialist,
Tax Administrator
Tax Reporting Duty
VAT Setup Administration Duty
EMEA Tax Reporting Duty
Global Tax Reporting Duty

Some Questions to think
Can we use DFF’s for defining Tax rules?
Can we use SQL to write tax rules
Existing tax determination factors and contents sets are
sufficient to meet client business needs?
For international tax implementation does fusion offers any
Localization features?
Can we switch tax content of different providers after
implementation?
 Can we integrate third party tax ‘engines’ like Vertex, CCH etc.,
When to choose third party Tax engine during
implementations?
Tax Simulator – will it give expected results

Fusion Tax Solution and its limitations
● Fusion Tax has a robust design to meet tax requirements of all major
regions of the world and is very powerful
● However, it provides limited tax content
● You must configure it from scratch. For complex tax regimes, configuring
taxation rules and maintaining them can be very time consuming. Testing
each scenario is time consuming
● Highly dependent on TCA, Inventory, Legal Entity models for tax
calculation. Cannot be called externally
● Defining rules based on additional extensible attributes is not supported
● May be difficult to get enhancements prioritized
● Need to implement localizations for local reporting requirements
● Need to keep checking for rules / rate changes and there is always risk of
missing some tax law changes which might put you in Audit risk
● Does not provide master geography data

Why Third Party Tax Engine Integration?
● To get out of the box tax content
● To avoid continuously monitoring tax law changes
● Automated tax content updates
● Better audit support
● Single solution for Oracle and non Oracle systems
● Meet local reporting needs
● Access to tax research of the provider
● Get out of the box return / support for major
countries

Useful Resources
http://docs.oracle.com/cloud/latest/financialscs_gs/FAUTX/toc.htm
https://sites.google.com/site/oracler12ebtax/ - My blog – contains various
implementation concepts and worked out solutions for US and Global
Implementations

Q & A

360894343-Oracle-Cloud-Fusion-Tax-12092016-V1-0.pptx

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