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8 legal structures

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8 legal structures

  1. 1. Copyright © 2012, Oracle and/or its affiliates. All rights reserved.
  2. 2. <Insert Picture Here> Legal Structure Oracle Fusion Human Capital Management
  3. 3. Copyright © 2012, Oracle and/or its affiliates. All rights reserved. Legal Structures Concepts  Legal Jurisdictions  Legal Authorities  Legal Entity / Legal Employer  Legal Reporting Units / Tax Reporting Units  Payroll Statutory Unit  Legislative Data Group
  4. 4. Copyright © 2012, Oracle and/or its affiliates. All rights reserved. Legal Structures Legal Jurisdictions  Jurisdiction is where a particular piece of legislation applies, perhaps group of countries, country, state, county, or parish. French Labor Law, Singapore Transactions Tax Law, and US Income Tax Laws are examples of particular legislation that apply to legal entities operating in different countries' jurisdictions. You can create legal jurisdictions in addition to the pre-defined ones.  Types of jurisdictions are: Identifying Jurisdiction, Income Tax Jurisdiction & Transaction Tax Jurisdiction Identifying Jurisdiction An identifying jurisdiction is the first jurisdiction you must register with to be allowed to do business in a country. For each legal entity, select an identifying jurisdiction. If there is more than one jurisdiction that a legal entity needs to register with to commence business, select one as the identifying jurisdiction. Typically the identifying jurisdiction is the one you use to uniquely identify your legal entity. Income Tax Jurisdiction Income tax jurisdictions impose taxes on your financial income generated by all your entities within their jurisdiction. Create income tax jurisdictions to properly report and remit income taxes to the legal authority. Transaction Tax Jurisdiction Tax jurisdictions and their respective rates are provided with transactions from the suppliers, and require periodic maintenance. Create transaction tax jurisdictions through Oracle Fusion Tax in a separate business flow, because of the specific needs and complexities of various taxes. Use transaction tax jurisdiction for legal reporting of sales tax and value added tax.
  5. 5. Copyright © 2012, Oracle and/or its affiliates. All rights reserved. Legal Structures Legal Authorities  A legal authority is a government or legal body that is charged with powers to make laws, levy and collect fees and taxes, and remit financial appropriations for a given jurisdiction. There are predefined legal authorities in the application, you can create your own in addition.  The Internal Revenue Service is responsible for collecting taxes and the interpretation and enforcement of the Internal Revenue Code of the United States.  Legal authority information is printed on your tax reports to meet some countries’ requirements, such as India and Brazil.  Legal authorities are defined in the Oracle Fusion Legal Entity Configurator.  Tax authorities are a subset of legal authorities and are defined using the same setup flow.  Legal authorities are not mandatory in Oracle Fusion Human Capital Management (HCM), but are recommended and are generally referenced on statutory reports.
  6. 6. Copyright © 2012, Oracle and/or its affiliates. All rights reserved. Legal Structures Legal Entities / Legal Employer  A legal entity is a recognized party with rights and responsibilities given by legislation  Define a legal entity for each registered company or other entity recognized in law for which you want to: record assets, liabilities, and income; pay transaction taxes; perform intercompany trading  The contracting party on any transaction is always the legal entity. Own the assets of the enterprise (as part of Fixed Assets and General Ledger) Record sales and pay taxes on those sales (as part of Accounts Receivable) Make purchases and incur expenses (as part of Payables) Perform other transactions  Legal entities can be identified as legal employers and therefore, are available for use in Oracle Fusion Human Capital Management (HCM) applications.
  7. 7. Copyright © 2012, Oracle and/or its affiliates. All rights reserved. Legal Structures Legal Reporting Units / Tax Reporting Units  Each of your legal entities has one or more legal reporting units to support local reporting requirements  Legal reporting units were referred to as establishments in R12 EBS  When a legal entity is created, a main LRU with the same name gets automatically created  A legal reporting unit is the lowest level component of a legal structure that requires registrations  Plan and define your legal reporting units at both the local and national levels if you operate within the administrative boundaries of a jurisdiction that is more granular than country. For example, in India, income tax exists at the national level where as professional tax exists at the state level.  You must register your legal entities and reporting units with legal authorities in the jurisdictions where you conduct business  A tax reporting unit is the Oracle Fusion HCM version of the legal reporting unit in Oracle Fusion Applications.  Use a tax reporting unit to group workers for the purpose of tax and social insurance reporting
  8. 8. Copyright © 2012, Oracle and/or its affiliates. All rights reserved. Legal Structures Payroll Statutory Units (PSU)  Legal entities are required to pay payroll tax and social insurance such as social security on your payroll.  You can register payroll statutory units (PSUs) to pay and report on payroll tax and social insurance on behalf of many of your legal entities.  Payroll statutory units enable you to group legal employers so that you can perform statutory calculations at a higher level  In some cases, a legal employer is also a payroll statutory unit.  A legal employer can belong to only one payroll statutory unit.  You associate a legislative data group (LDG) with a payroll statutory unit to provide the correct payroll information for workers  When you set up legal entities, you can identify them as legal employers and payroll statutory units, which makes them available for use in Oracle Fusion Human Capital Management (HCM)
  9. 9. Copyright © 2012, Oracle and/or its affiliates. All rights reserved. Legal Structures Legislative Data Groups (LDG)  Legislative data groups are a means of partitioning payroll and related data. At least one legislative data group is required for each country where the enterprise operates.  Oracle Fusion Payroll is organized by legislative data groups.  Each LDG marks a legislation in which payroll is processed, and is associated with a legislative code, currency and its own cost key flexfield structure  LDG is a boundary that can share the same set up and still comply with the local laws  Each legislative data group is associated with one or more payroll statutory units  Each payroll statutory unit can belong to only one legislative data group  For payroll purposes, it is recommended to have one legislative data group for each country, since you define elements, formulas, and payroll definitions for a legislative data group. If you have multiple legislative data groups for a country, you will need to define the information again for each LDG. If you are not using payroll, you may want to use legislative data groups since they are used in extracts and reports.
  10. 10. Copyright © 2012, Oracle and/or its affiliates. All rights reserved. Legal Structures Enterprise Legislative Data Group Payroll Statutory Unit Legal Employer Tax Reporting Unit Sun Power Corp Sun Power US Sun Power US Manufacturing US Materials US Assembly US Installation US Installation US Sun Power UK Sun Power UK Installation UK Installation UK Org Model - Example
  11. 11. Copyright © 2012, Oracle and/or its affiliates. All rights reserved. Legal Structures Org Structures Fusion Definition Top organization level for structures, entities and data Localized payroll data partition Group of legal employers who are considered a single reporting group for payroll purposes A legal entity that employs people An organization used to group employees for Payroll reporting Fusion Enterprise Legislative Data Group Payroll Statutory Unit Legal Employer Tax Reporting Unit
  12. 12. Copyright © 2012, Oracle and/or its affiliates. All rights reserved. Legal Structures Org Structures Fusion Legislative Data Group Payroll Statutory Unit Legal Employer Tax Reporting Unit E-Business Suite Business Group Tax Group Reporting Organization Government Reporting Entity PeopleSoft Regulatory Region Set ID Common Paymaster Company Company
  13. 13. Copyright © 2012, Oracle and/or its affiliates. All rights reserved. Legal Structures Payroll Employment Model - Example Assignment Project Manager Employment Terms Permanent Work Relationship (Manufacturing US) Assignment Trainer Employment Terms Temporary Work Relationship (Installation US) David Ellis Assignment Project Manager Employment Terms Permanent Assignment Trainer Employment Terms Temporary Payroll Relationship PSU: Sun Power US David Ellis HR Model Payroll Model
  14. 14. Copyright © 2012, Oracle and/or its affiliates. All rights reserved. Legal Structures Payroll Employment Model  Payroll Relationship  Highest level for which to accumulate balances  Elements are typically deduction elements such as tax, pension, social insurance or court orders  Terms  Helps to manage multiple assignments  Elements assigned are typically salary, pension or social insurance elements that vary based on terms  Assignment  Elements assigned are typically monetary terms and conditions such as overtime, bonuses, union dues etc
  15. 15. Copyright © 2012, Oracle and/or its affiliates. All rights reserved. Legal Structures Manage Legal Entity HCM Information - Demo
  16. 16. Copyright © 2012, Oracle and/or its affiliates. All rights reserved. Legal Structures Manage Legal Entity HCM Information – Hands On
  17. 17. Copyright © 2012, Oracle and/or its affiliates. All rights reserved.

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