R12_IMPLEMENTATION GUIDE.pdf

Oracle® E-Business Tax
Implementation Guide
Release 12.1
Part No. E13629-02
April 2009

Oracle E-Business Tax Implementation Guide, Release 12.1
Part No. E13629-02
Copyright © 2006, 2009, Oracle and/or its affiliates. All rights reserved.
Primary Author: Stacey Tucker-Blosch
Contributing Author: Nigel Chapman, Kevan Davies, Robert MacIsaac, Angie Shahi, Harsh Takle, Brijesh
Thakkar, Isaac William
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Contents
Send Us Your Comments
Preface
1 Understanding Oracle E-Business Tax
The Oracle E-Business Tax Solution.........................................................................................1-1
E-Business Tax Components..................................................................................................... 1-1
Tax Content Services............................................................................................................ 1-3
Tax Determination Services................................................................................................. 1-4
Analyzing Your Tax Requirements...........................................................................................1-7
Who am I?............................................................................................................................ 1-7
What are the operations/businesses that I have?..................................................................1-7
What taxes am I subject to?................................................................................................ 1-12
2 Setting Up Applications for Oracle E-Business Tax
Implementation Checklist for Oracle E-Business Tax............................................................. 2-1
Setting Up Tax Users................................................................................................................. 2-2
Setting Profile Option Values................................................................................................... 2-2
Setting Up Lookup Codes......................................................................................................... 2-8
Setting Up TCA Geography Hierarchy...................................................................................2-10
Setting Up Legal Entity........................................................................................................... 2-12
Applying End Dates to Legal Entities................................................................................ 2-14
Setting Up Operating Units.................................................................................................... 2-15
Setting Up Accounts and Accounting Information................................................................ 2-16
Setting Up TCA Classifications.............................................................................................. 2-16
Setting Up Oracle Inventory................................................................................................... 2-17

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3 Managing Migrated Data
Migrated Tax Data in Oracle E-Business Tax........................................................................... 3-1
Tax Classification Codes in Oracle E-Business Tax................................................................. 3-5
Tax Configuration Migration Path............................................................................................3-6
4 Setting Up Country-Specific Taxes
Country Setup Examples........................................................................................................... 4-1
United Kingdom Value Added Tax (VAT)...............................................................................4-1
Canadian Sales Tax................................................................................................................. 4-30
United States Sales and Use Tax............................................................................................. 4-50

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Send Us Your Comments
Oracle E-Business Tax Implementation Guide, Release 12.1
Part No. E13629-02
Oracle welcomes customers' comments and suggestions on the quality and usefulness of this document.
Your feedback is important, and helps us to best meet your needs as a user of our products. For example:
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Preface
Intended Audience
Welcome to Release 12.1 of the Oracle E-Business Tax Implementation Guide.
This guide assumes you have a working knowledge of the following:
• The principles and customary practices of your business area.
• Computer desktop application usage and terminology.
If you have never used Oracle Applications, we suggest you attend one or more of the
Oracle Applications training classes available through Oracle University.
See Related Information Sources on page viii for more Oracle Applications product
information.
TTY Relay Access to Oracle Support Services
To reach AT&T Customer Assistants, dial 711 or 1.800.855.2880. An AT&T Customer
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Assistant contacts Oracle Support Services, an Oracle Support Services engineer will
handle technical issues and provide customer support according to the Oracle service
request process.
Documentation Accessibility
Our goal is to make Oracle products, services, and supporting documentation accessible
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documentation is available in HTML format, and contains markup to facilitate access by

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the disabled community. Accessibility standards will continue to evolve over time, and
Oracle is actively engaged with other market-leading technology vendors to address
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For more information, visit the Oracle Accessibility Program Web site at
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This documentation may contain links to Web sites of other companies or organizations
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representations regarding the accessibility of these Web sites.
Structure
1 Understanding Oracle E-Business Tax
2 Setting Up Applications for Oracle E-Business Tax
3 Managing Migrated Data
4 Setting Up Country-Specific Taxes
Related Information Sources
This document is included on the Oracle Applications Document Library, which is
supplied in the Release 12 DVD Pack. You can download soft-copy documentation as
PDF files from the Oracle Technology Network at http://otn.oracle.com/documentation,
or you can purchase hard-copy documentation from the Oracle Store at
http://oraclestore.oracle.com. The Oracle E-Business Suite Documentation Library
Release 12 contains the latest information, including any documents that have changed
significantly between releases. If substantial changes to this book are necessary, a
revised version will be made available on the online documentation CD on My Oracle
Support.
If this guide refers you to other Oracle Applications documentation, use only the
Release 12 versions of those guides.
For a full list of documentation resources for Oracle Applications Release 12, see Oracle
Applications Documentation Resources, Release 12, My Oracle Support.
Online Documentation
All Oracle Applications documentation is available online (HTML or PDF).

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• PDF - PDF documentation is available for download from the Oracle Technology
Network at http://otn.oracle.com/documentation.
• Online Help - Online help patches (HTML) are available on My Oracle Support.
• My Oracle Support Knowledge Browser - The My Oracle Support Knowledge
Browser lets you browse the knowledge base, from a single product page, to find all
documents for that product area. Use the Knowledge Browser to search for
release-specific information, such as FAQs, recent patches, alerts, white papers,
troubleshooting tips, and other archived documents.
• Oracle eBusiness Suite Electronic Technical Reference Manuals - Each Electronic
Technical Reference Manual (eTRM) contains database diagrams and a detailed
description of database tables, forms, reports, and programs for a specific Oracle
Applications product. This information helps you convert data from your existing
applications and integrate Oracle Applications data with non-Oracle applications,
and write custom reports for Oracle Applications products. Oracle eTRM is
available on My Oracle Support.
Related Guides
You should have the following related books on hand. Depending on the requirements
of your particular installation, you may also need additional manuals or guides.
Oracle Applications Installation Guide: Using Rapid Install:
This book is intended for use by anyone who is responsible for installing or upgrading
Oracle Applications. It provides instructions for running Rapid Install either to carry
out a fresh installation of Oracle Applications Release 12, or as part of an upgrade from
Release 11i to Release 12. The book also describes the steps needed to install the
technology stack components only, for the special situations where this is applicable.
Oracle Applications Maintenance Procedures:
This guide describes how to use AD maintenance utilities to complete tasks such as
compiling invalid objects, managing parallel processing jobs, and maintaining snapshot
information. Part of Maintaining Oracle Applications, a 3-book set that also includes
Oracle Applications Patching Procedures and Oracle Applications Maintenance
Utilities.
Oracle Applications Maintenance Utilities:
This guide describes how to run utilities, such as AD Administration and AD
Controller, used to maintain the Oracle Applications file system and database. Outlines
the actions performed by these utilities, such as monitoring parallel processes,
generating Applications files, and maintaining Applications database entities. Part of
Maintaining Oracle Applications, a 3-book set that also includes Oracle Applications
Patching Procedures and Oracle Applications Maintenance Procedures.
Oracle Applications Patching Procedures:
This guide describes how to patch the Oracle Applications file system and database

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using AutoPatch, and how to use other patching-related tools like AD Merge Patch,
OAM Patch Wizard, and OAM Registered Flagged Files. Describes patch types and
structure, and outlines some of the most commonly used patching procedures. Part of
Maintaining Oracle Applications, a 3-book set that also includes Oracle Applications
Maintenance Utilities and Oracle Applications Maintenance Procedures.
Oracle Applications Upgrade Guide: Release 11i to Release 12:
This guide provides information for DBAs and Applications Specialists who are
responsible for upgrading a Release 11i Oracle Applications system (techstack and
products) to Release 12. In addition to information about applying the upgrade driver,
it outlines pre-upgrade steps and post-upgrade steps, and provides descriptions of
product-specific functional changes and suggestions for verifying the upgrade and
reducing downtime.
Oracle Alert User's Guide:
This guide explains how to define periodic and event alerts to monitor the status of
your Oracle Applications data.
Oracle Application Framework Developer's Guide:
This guide contains the coding standards followed by the Oracle Applications
development staff to produce applications built with Oracle Application Framework.
This guide is available in PDF format on My Oracle Support and as online
documentation in JDeveloper 10g with Oracle Application Extension.
Oracle Application Framework Personalization Guide:
This guide covers the design-time and run-time aspects of personalizing applications
built with Oracle Application Framework.
Oracle Applications Concepts:
This book is intended for all those planning to deploy Oracle E-Business Suite Release
12, or contemplating significant changes to a configuration. After describing the Oracle
Applications architecture and technology stack, it focuses on strategic topics, giving a
broad outline of the actions needed to achieve a particular goal, plus the installation and
configuration choices that may be available.
Oracle Applications Developer's Guide:
This guide contains the coding standards followed by the Oracle Applications
development staff. It describes the Oracle Application Object Library components
needed to implement the Oracle Applications user interface described in the Oracle
Applications User Interface Standards for Forms-Based Products. It provides information to
help you build your custom Oracle Forms Developer forms so that they integrate with
Oracle Applications. In addition, this guide has information for customizations in
features such as concurrent programs, flexfields, messages, and logging.
Oracle Applications System Administrator's Guide Documentation Set:
This documentation set provides planning and reference information for the Oracle
Applications System Administrator. Oracle Applications System Administrator's Guide -

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Configuration contains information on system configuration steps, including defining
concurrent programs and managers, enabling Oracle Applications Manager features,
and setting up printers and online help. Oracle Applications System Administrator's Guide
- Maintenance provides information for frequent tasks such as monitoring your system
with Oracle Applications Manager, administering Oracle E-Business Suite Secure
Enterprise Search, managing concurrent managers and reports, using diagnostic
utilities including logging, managing profile options, and using alerts. Oracle
Applications System Administrator's Guide - Security describes User Management, data
security, function security, auditing, and security configurations.
Oracle Applications User's Guide:
This guide explains how to navigate, enter data, query, and run reports using the user
interface (UI) of Oracle Applications. This guide also includes information on setting
user profiles, as well as running and reviewing concurrent requests.
Oracle Applications Multiple Organizations Implementation Guide:
This guide describes the multiple organizations concepts in Oracle Applications. It
describes in detail on setting up and working effectively with multiple organizations in
Oracle Applications.
Oracle Advanced Global Intercompany System User's Guide:
This guide describes the self service application pages available for Intercompany users.
It includes information on setting up intercompany, entering intercompany
transactions, importing transactions from external sources and generating reports.
Oracle Customer Data Librarian Implementation Guide:
This guide describes how to implement Oracle Customer Data Librarian. As part of
implementing Oracle Customer Data Librarian, you must also complete all the
implementation steps for Oracle Customers Online.
Oracle Customer Data Librarian User Guide:
This guide describes how to use Oracle Customer Data Librarian to establish and
maintain the quality of the Trading Community Architecture Registry, focusing on
consolidation, cleanliness, and completeness. Oracle Customer Data Librarian has all of
the features in Oracle Customers Online, and is also part of the Oracle Customer Data
Management product family.
Oracle Customers Online Implementation Guide:
This guide describes how to implement Oracle Customers Online.
Oracle Customers Online User Guide:
This guide describes how to use Oracle Customers Online to view, create, and maintain
your customer information. Oracle Customers Online is based on Oracle Trading
Community Architecture data model and functionality, and is also part of the Oracle
Customer Data Management product family.
Oracle E-Business Suite Diagnostics User's Guide

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This manual contains information on implementing, administering, and developing
diagnostics tests in the Oracle E-Business Suite Diagnostics framework.
Oracle E-Business Suite Integrated SOA Gateway User's Guide
This guide describes the high level service enablement process, explaining how users
can browse and view the integration interface definitions and services residing in
Oracle Integration Repository.
Oracle E-Business Suite Integrated SOA Gateway Implementation Guide
This guide explains how integration repository administrators can manage and
administer the service enablement process (based on the service-oriented architecture)
for both native packaged public integration interfaces and composite services (BPEL
type). It also describes how to invoke Web services from Oracle E-Business Suite by
employing the Oracle Workflow Business Event System; how to manage Web service
security; and how to monitor SOAP messages.
Oracle E-Business Suite Integrated SOA Gateway Developer's Guide
This guide describes how system integration developers can perform end-to-end service
integration activities. These include orchestrating discrete Web services into meaningful
end-to-end business processes using business process execution language (BPEL), and
deploying BPEL processes at run time.
It also explains in detail how to invoke Web services using the Service Invocation
Framework. This includes defining Web service invocation metadata, invoking Web
services, managing errors, and testing the Web service invocation.
Oracle E-Business Tax Reporting Guide:
This guide explains how to run all tax reports that make use of the E-Business Tax data
extract. This includes the Tax Reporting Ledger and other core tax reports,
country-specific VAT reports, and Latin Tax Engine reports.
Oracle E-Business Tax User Guide:
This guide describes the entire process of setting up and maintaining tax configuration
data, as well as applying tax data to the transaction line. It describes the entire
regime-to-rate setup flow of tax regimes, taxes, statuses, rates, recovery rates, tax
jurisdictions, and tax rules. It also describes setting up and maintaining tax reporting
codes, fiscal classifications, tax profiles, tax registrations, configuration options, and
third party service provider subscriptions. You also use this manual to maintain
migrated tax data for use with E-Business Tax.
Oracle E-Business Tax: Vertex Q-Series and Taxware Sales/Use Tax System
Implementation Guide:
This guide explains how to setup and use the services of third party tax service
providers for US Sales and Use tax. The tax service providers are Vertex Q-Series and
Taxware Sales/Use Tax System. When implemented, the Oracle E-Business Tax service
subscription calls one of these tax service providers to return a tax rate or amount
whenever US Sales and Use tax is calculated by the Oracle E-Business Tax tax engine.

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This guide provides setup steps, information about day-to-day business processes, and
a technical reference section.
Oracle Financials and Oracle Procurement Functional Upgrade Guide: Release 11i to
Release 12:
This guides provides detailed information about the functional impacts of upgrading
Oracle Financials and Oracle Procurement products from Release 11i to Release 12. This
guide supplements the Oracle Applications Upgrade Guide: Release 11i to Release 12.
Oracle Financials Concepts Guide:
This guide describes the fundamental concepts of Oracle Financials. The guide is
intended to introduce readers to the concepts used in the applications, and help them
compare their real world business, organization, and processes to those used in the
applications.
Oracle Financials Country-Specific Installation Supplement:
This guide provides general country information, such as responsibilities and report
security groups, as well as any post-install steps required by some countries.
Oracle Financials for the Americas User Guide:
This guide describes functionality developed to meet specific business practices in
countries belonging to the Americas region. Consult this user guide along with your
financial product user guides to effectively use Oracle Financials in your country.
Oracle Financials for Asia/Pacific User Guide:
countries belonging to the Asia/Pacific region. Consult this user guide along with your
Oracle Financials for Europe User Guide:
countries belonging to the European region. Consult this user guide along with your
Oracle Financials for India User Guide:
This guide provides information on how to use Oracle Financials for India. Use this
guide to learn how to create and maintain setup related to India taxes, defaulting and
calculation of taxes on transactions. This guide also includes information about
accounting and reporting of taxes related to India.
Oracle Financials for India Implementation Guide:
This guide provides information on how to implement Oracle Financials for India. Use
this guide to understand the implementation steps required for application use,
including how to set up taxes, tax defaulting hierarchies, set up different tax regimes,
organization and transactions.
Oracle Financials Glossary:

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The glossary includes definitions of common terms that are shared by all Oracle
Financials products. In some cases, there may be different definitions of the same term
for different Financials products. If you are unsure of the meaning of a term you see in
an Oracle Financials guide, please refer to the glossary for clarification. You can find the
glossary in the online help or in the Oracle Financials Implementation Guide.
Oracle Financials Implementation Guide:
This guide provides information on how to implement the Oracle Financials E-Business
Suite. It guides you through setting up your organizations, including legal entities, and
their accounting, using the Accounting Setup Manager. It covers intercompany
accounting and sequencing of accounting entries, and it provides examples.
Oracle Financials RXi Reports Administration Tool User Guide:
This guide describes how to use the RXi reports administration tool to design the
content and layout of RXi reports. RXi reports let you order, edit, and present report
information to better meet your company's reporting needs.
Oracle General Ledger Implementation Guide:
This guide provides information on how to implement Oracle General Ledger. Use this
guide to understand the implementation steps required for application use, including
how to set up Accounting Flexfields, Accounts, and Calendars.
Oracle General Ledger Reference Guide
This guide provides detailed information about setting up General Ledger Profile
Options and Applications Desktop Integrator (ADI) Profile Options.
Oracle General Ledger User's Guide:
This guide provides information on how to use Oracle General Ledger. Use this guide
to learn how to create and maintain ledgers, ledger currencies, budgets, and journal
entries. This guide also includes information about running financial reports.
Oracle Internet Expenses Implementation and Administration Guide:
This book explains in detail how to configure Oracle Internet Expenses and describes its
integration with other applications in the E-Business Suite, such as Oracle Payables and
Oracle Projects. Use this guide to understand the implementation steps required for
application use, including how to set up policy and rate schedules, credit card policies,
audit automation, and the expenses spreadsheet. This guide also includes detailed
information about the client extensions that you can use to extend Oracle Internet
Expenses functionality.
Oracle Payables User Guide:
This guide describes how to use Oracle Payables to create invoices and make payments.
In addition, it describes how to enter and manage suppliers, import invoices using the
Payables open interface, manage purchase order and receipt matching, apply holds to
invoices, and validate invoices. It contains information on managing expense reporting,
procurement cards, and credit cards. This guide also explains the accounting for
Payables transactions.

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Oracle Payables Implementation Guide:
This guide provides you with information on how to implement Oracle Payables. Use
this guide to understand the implementation steps required for how to set up suppliers,
payments, accounting, and tax.
Oracle Payables Reference Guide:
This guide provides you with detailed information about the Oracle Payables open
interfaces, such as the Invoice open interface, which lets you import invoices. It also
includes reference information on purchase order matching and purging purchasing
information.
Oracle Projects Documentation Set
Oracle Projects Implementation Guide:
Use this manual as a guide for implementing Oracle Projects. This manual also includes
appendixes covering security functions, menus and responsibilities, and profile options.
Oracle Projects Fundamentals:
Oracle Project Fundamentals provides the common foundation shared across the Oracle
Projects products (Project Costing, Project Billing, Project Resource Management,
Project Management, and Project Portfolio Analysis). Use this guide to learn
fundamental information about the Oracle Projects solution. This guide includes a
Navigation Paths appendix. Use this appendix to find out how to access each window
in the Oracle Projects solution.
Oracle Project Costing User Guide:
Use this guide to learn detailed information about Oracle Project Costing. Oracle Project
Costing provides the tools for processing project expenditures, including calculating
their cost to each project and determining the GL accounts to which the costs are
posted.
Oracle Project Billing User Guide:
This guide shows you how to use Oracle Project Billing to define revenue and invoicing
rules for your projects, generate revenue, create invoices, and integrate with other
Oracle Applications to process revenue and invoices, process client invoicing, and
measure the profitability of your contract projects.
Oracle Project Management User Guide:
This guide shows you how to use Oracle Project Management to manage projects
through their lifecycles -- from planning, through execution, to completion.
Oracle Project Portfolio Analysis User Guide:
This guide contains the information you need to understand and use Oracle Project
Portfolio Analysis. It includes information about project portfolios, planning cycles, and
metrics for ranking and selecting projects for a project portfolio.
Oracle Project Resource Management User Guide:

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This guide provides you with information on how to use Oracle Project Resource
Management. It includes information about staffing, scheduling, and reporting on
project resources.
Oracle Projects Glossary:
This glossary provides definitions of terms that are shared by all Oracle Projects
applications. If you are unsure of the meaning of a term you see in an Oracle Projects
guide, please refer to the glossary for clarification. You can find the glossary in the
online help for Oracle Projects, and in the Oracle Projects Fundamentals book.
Oracle Purchasing User's Guide:
This guide describes how to create and approve purchasing documents, including
requisitions, different types of purchase orders, quotations, RFQs, and receipts. This
guide also describes how to manage your supply base through agreements, sourcing
rules, and approved supplier lists. In addition, this guide explains how you can
automatically create purchasing documents based on business rules through integration
with Oracle Workflow technology, which automates many of the key procurement
processes.
Oracle Receivables Implementation Guide:
This guide provides you with information on how to implement Oracle Receivables.
Use this guide to understand the implementation steps required for application use,
including how to set up customers, transactions, receipts, accounting, tax, and
collections. This guide also includes a comprehensive list of profile options that you can
set to customize application behavior.
Oracle Receivables Reference Guide:
This guide provides you with detailed information about all public application
programming interfaces (APIs) that you can use to extend Oracle Receivables
functionality. This guide also describes the Oracle Receivables open interfaces, such as
AutoLockbox which lets you create and apply receipts and AutoInvoice which you can
use to import and validate transactions from other systems. Archiving and purging
Receivables data is also discussed in this guide.
Oracle Receivables User Guide:
This guide provides you with information on how to use Oracle Receivables. Use this
guide to learn how to create and maintain transactions and bills receivable, enter and
apply receipts, enter customer information, and manage revenue. This guide also
includes information about accounting in Receivables. Use the Standard Navigation
Paths appendix to find out how to access each Receivables window.
Oracle Subledger Accounting Implementation Guide:
This guide provides setup information for Oracle Subledger Accounting features,
including the Accounting Methods Builder. You can use the Accounting Methods
Builder to create and modify the setup for subledger journal lines and application
accounting definitions for Oracle subledger applications. This guide also discusses the
reports available in Oracle Subledger Accounting and describes how to inquire on

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subledger journal entries.
Oracle Trading Community Architecture Administration Guide:
This guide describes how to administer and implement Oracle Trading Community
Architecture (TCA). You set up, control, and manage functionality that affects data in
the TCA Registry. It also describes how to set up and use Resource Manager to manage
resources.
Oracle Trading Community Architecture Technical Implementation Guide:
This guide explains how to use the public Oracle Trading Community Architecture
application programming interfaces (APIs) and develop callouts based on Oracle
Workflow Business Events System (BES). For each API, this guide provides a
description of the API, the PL/SQL procedure, and the Java method, as well as a table of
the parameter descriptions and validations. For each BES callout, this guide provides
the name of the logical entity, its description, and the ID parameter name. Also
included are setup instructions and sample code.
Oracle Trading Community Architecture Reference Guide:
This guide contains seeded relationship types, seeded Data Quality Management data,
D and B data elements, Bulk Import interface table fields and validations, and a
comprehensive glossary. This guide supplements the documentation for Oracle Trading
Community Architecture and all products in the Oracle Customer Data Management
family.
Oracle Trading Community Architecture User Guide:
This guide describes the Oracle Trading Community Architecture (TCA) and how to
use features from the Trading Community Manager responsibility to create, update,
enrich, and cleanse the data in the TCA Registry. It also describes how to use Resource
Manager to define and manage resources.
Integration Repository
The Oracle Integration Repository is a compilation of information about the service
endpoints exposed by the Oracle E-Business Suite of applications. It provides a
complete catalog of Oracle E-Business Suite's business service interfaces. The tool lets
users easily discover and deploy the appropriate business service interface for
integration with any system, application, or business partner.
The Oracle Integration Repository is shipped as part of the E-Business Suite. As your
instance is patched, the repository is automatically updated with content appropriate
for the precise revisions of interfaces in your environment.
Do Not Use Database Tools to Modify Oracle Applications Data
Oracle STRONGLY RECOMMENDS that you never use SQL*Plus, Oracle Data
Browser, database triggers, or any other tool to modify Oracle Applications data unless
otherwise instructed.

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Oracle provides powerful tools you can use to create, store, change, retrieve, and
maintain information in an Oracle database. But if you use Oracle tools such as
SQL*Plus to modify Oracle Applications data, you risk destroying the integrity of your
data and you lose the ability to audit changes to your data.
Because Oracle Applications tables are interrelated, any change you make using an
Oracle Applications form can update many tables at once. But when you modify Oracle
Applications data using anything other than Oracle Applications, you may change a
row in one table without making corresponding changes in related tables. If your tables
get out of synchronization with each other, you risk retrieving erroneous information
and you risk unpredictable results throughout Oracle Applications.
When you use Oracle Applications to modify your data, Oracle Applications
automatically checks that your changes are valid. Oracle Applications also keeps track
of who changes information. If you enter information into database tables using
database tools, you may store invalid information. You also lose the ability to track who
has changed your information because SQL*Plus and other database tools do not keep a
record of changes.

Understanding Oracle E-Business Tax 1-1
1
Understanding Oracle E-Business Tax
The Oracle E-Business Tax Solution
E-Business Tax provides a single point solution for managing your transaction-based
tax requirements. E-Business Tax uniformly delivers tax services to all E-Business Suite
business flows through one application interface. As a global system architecture,
E-Business Tax is configurable and scalable for adding and maintaining country-specific
tax content.
With E-Business Tax, you can model your tax requirements according to the needs of
local and international tax requirements. This includes:
• Both simple and complex country-specific tax legislation.
• Cross-border transactions.
• Local compliance requirements for recording and reporting.
• Continual changes to tax legislation, such as new taxes, local law changes, special
tax rates, and special exceptions for products and customers.
You can manage the entire configuration and maintenance of tax content from the one
E-Business Tax application. This ensures a uniform tax setup across applications, with a
centrally managed system of automated tax services and control over manual
intervention and update.
E-Business Tax Components
E-Business Tax consists of a tax knowledge base, a variety of tax services that respond
to specific tax events, and a set of repositories for tax content and tax recording.
This table lists the major components of E-Business Tax.

1-2 Oracle E-Business Tax Implementation Guide
Component Function
Tax Content Services This component addresses the creation,
maintenance, and management of tax content.
Tax Content Repository This component contains master and reference
setup data. Data created via Tax Content
Services is stored in the Tax Content
Repository.
Tax Service Request Manager This component manages the access to all tax
data and services, including:
• Integration with E-Business Tax services.
• Integration with tax service providers.
• Standard interface for E-Business Suite
applications to add tax services to their
business process flows.
Tax Determination Services This component consists of two
subcomponents:
• Tax Determination Management -
Manages the requirements and processes
around automatic tax calculation based
on transaction details and tax setup
information.
• Tax Rules Management - Manages the
setup and definition of tax rules.
Tax Record Repository This component contains the key attributes
necessary to record a tax event. A single tax
transaction can include over 600 key
attributes.
Tax Administration Services This component manages the accounting for
all tax transactions.
Tax Reporting Ledger This component manages access to the Tax
Content and Tax Record Repositories for tax
reporting purposes.
Tax Content Services and Tax Determination Services are the key components in the

process of determining and calculating taxes on transactions. The Tax Content Services
provide the setup data that is used as the basis for tax determination. The Tax
Determination Services determine the tax or taxes on the transaction line according to
the tax setup details and transaction information.
Tax Content Services
Tax Content Services store and maintain the master and reference data that is needed to
support the other components in E-Business Tax. You use the E-Business Tax
application to model the details of the tax setup for all of your company tax
requirements.
Tax Content Services include these subcomponents:
• Basic tax configuration
• Tax jurisdictions
• Party tax profiles
• Fiscal classifications
• Exemptions and exceptions
• Country default controls
Basic Tax Configuration - The basic tax configuration includes the regime-to-rate flow
for each tax regime:
• Tax regime - The set of laws and regulations that determines the treatment of one
or more taxes.
• Tax - A classification of a charge imposed by a government through a fiscal or tax
authority.
• Tax status - The taxable nature of a product in the context of a transaction for a tax.
• Tax rates - The rates specified for a tax status for a given time period. The tax rate is
expressed as a percentage, a value per unit quantity, or a fixed sum per transaction.
• Tax recovery rates - The full or partial reclaim of taxes paid on the purchase or
movement of a product.
Tax Jurisdictions - This subcomponent provides the basis for defining tax jurisdictions.
A tax jurisdiction is the geographic area where a tax is levied by a specific tax authority.
Party Tax Profiles - This subcomponent provides the basis for defining tax profiles for
the parties involved in tax transactions that are set up through Legal Entity and Trading
Community Architecture. Party tax profiles contain all of the tax information for each
party, including tax registrations and party fiscal classifications.

Fiscal Classifications - This subcomponent provides for the definition of tax fiscal
classifications. A fiscal classification is a way that a tax authority classifies each part of a
transaction:
• Parties and party sites involved in the transaction.
• Products involved in the transaction.
• Nature of the transaction.
• Documents associated with the transaction.
E-Business Tax uses fiscal classifications to set up tax rules that provide one or more of
these qualifications:
• When taxes apply.
• What the taxable basis is.
• What tax exemptions and tax exceptions apply.
• What the tax rate and tax rate adjustments are.
• What proportion of the tax is recoverable.
Exemptions and Exceptions - Tax exemptions let you define a party/party site or product
as partially or fully exempt from a tax. The details of tax exemptions are normally
supported by tax exemption certificates from the tax authority. Tax exceptions let you
define a special rate for specific products. This lets you define general rules for a wide
classification of products, while applying a separate rule to a subset of products.
Country Default Controls - This subcomponent lets you specify certain defaults by
country. These defaults are used during transaction entry.
Tax Determination Services
Every tax within a tax regime has its own regulations that determine when the tax is
applicable, that is, when the tax needs to be charged or paid. For each situation where
the tax is applicable, further regulations may apply that further clarify tax applicability,
such as the place of supply and tax jurisdiction, the tax registration party type, or the
tax status and tax rate.
In some cases, different rule may apply to the calculation of the tax itself. The taxable
basis on which the tax rate is calculated may differ from the transaction line amount.
This requires the use of a special taxable basis formula to make this calculation. In more
rare cases, the tax amount may result not by applying a tax rate to the taxable basis, but
by using a different tax calculation formula entirely.
So depending on the complexity of the tax regulations that apply to a given tax, one or
more decisions, or determinations, are involved in arriving at the final tax amount on a

tax line. Each of these determinations is defined in E-Business Tax as a separate rule
process. The aim of tax determination is to arrive at a process result for each of the rule
processes that apply to a transaction. This is achieved by defining tax rules for each tax
within a tax regime, according to the requirements of the tax regulations.
Tax Determination Services automate the determination of taxes on a transaction. Tax
determination is the central component of the E-Business Tax architecture. This
component provides the flexibility to define the rules that you need for each tax
determination process.
Tax Determination Services is comprised of two main sub-components:
• Tax Rules Management - A rules-based model that lets you define tax rules that
reflect the tax regulations of each tax authority.
• Tax Determination Management - The component responsible for calculating
transaction taxes based on transaction details, the tax rules, and the tax
configuration setup.
Tax Rules Management
You use the tax rule engine to create rules that reflect the regulations of a tax authority
for the taxes in a tax regime. As tax authority regulations change over time, you can
update both the rule values and the rule processes themselves.
The components of the tax rule engine are:
• Tax rules
• Rule processes
• Tax determining factor sets
• Tax determining factors
• Tax condition sets
• Process results
The components work together in this way:
• You define a tax rule for a combination of a tax and a rule process. Each tax rule
applies to one tax within a tax regime and belonging to one configuration owner.
• A tax rule makes use of a tax determining factor set. The determining factor set
contains the list of determining factors that you draw from to create the tax rule.
• The tax rule is composed of tax condition sets. You create tax condition sets for the
tax rule, using the determining factors of the determining factor set.

• Each tax condition set contains a determining factor, an operator, and a value. Each
tax condition set belonging to the tax rule points to a result that is relevant to the
rule process.
• Each tax condition set within a tax rule is associated with a result and assigned a
priority in which the rule engine considers the tax condition.
• Each tax rule within a rule process is assigned a priority in which the rule engine
considers the rule.
• At transaction time, the rule engine examines each tax condition until it finds a
result that makes the rule true and applicable to the transaction. If no tax condition
is found, then the rule does not apply to the transaction. The rule engine looks to
the tax rule with the next highest priority and repeats the process until a tax rule is
found.
Tax Determination Management
Tax Determination Management is responsible for calculating the tax on transactions.
This includes determining the taxes that apply to the transaction, the calculation of the
taxes, and the results of the calculation.
Tax Determination Management is organized into a hierarchy of rule processes. For a
given tax, the rule engine looks at the tax rules defined for each rule process and
determines which rule is true for each process. Each of these stages in the process
clarifies aspects of the tax or taxes that apply to the transaction. After examining and
retrieving results from each process, the rule engine calculates the tax or taxes.
The rule processes in Tax Determination Management are represented by rule types. You
define one or more tax rules for each rule type that you need, using the available rule
flows (Guided Entry or Expert Entry).
These are the rule processes and the order in which the rule engine examines them
during tax determination:
• Determine Place of Supply - Determines the location where a transaction is
considered to have taken place for a specific tax.
• Determine Tax Applicability - Determines the taxes that apply to a given
transaction.
• Determine Tax Registration - Determines the tax registration status for the
applicable taxes of the parties involved in the transaction.
• Determine Tax Status - Determines the tax status of each applicable tax to use on
the transaction.
• Determine Tax Rate - Determines the tax rate for each applicable tax status to use
on the transaction.

• Determine Taxable Basis - Determines the amount to use upon which to calculate
the tax rate.
• Calculate Tax Amounts - Calculates the tax and displays the calculation results.
• Determine Recovery Rate - Determines the recovery rate to apply to each
applicable tax on the transaction.
Depending on the complexity of the tax rules in a tax regime, you may or may not
define a tax rule for each of the above processes. If there is no complex rule associated
with any of the above processes, then the default values, as specified during setup, are
used during the tax determination process.
Related Topics
Tax Rules in Oracle E-Business Tax, Oracle E-Business Tax User Guide
Analyzing Your Tax Requirements
This section provides a few ideas for analyzing your tax requirements and using
E-Business Tax and other E-Business Suite applications to implement a solution.
An analysis of your tax requirements begins with an analysis of yourself. So the first
question to ask is, "Who am I?"
Who am I?
You first need to answer questions about yourself and your relationship to the legal and
regulatory agencies that enable you to operate in one or more countries.
Where do I have operations/businesses?
Identify the countries in which you operate. You will need to identify the country
where you are legally registered, and the countries where you have subsidiary
companies that are legally registered or have a legal presence.
Identify your first party legal entities in each country that you are legally registered.
Use the Legal Entity Configurator to capture information about your legal entities and
legal registrations.
You also need to identify your branches, divisions, and locations in the various
countries where you do business that need to be registered for tax. This is typically with
the local regulatory bodies. Such subdivisions of a legal entity are called legal
establishments.
What are the operations/businesses that I have?
Next consider the types of operations and businesses that you are engaged in, in the
countries where you have legal entities or establishments. The type of industries that

you work under (mining, telecommunications, pharmaceuticals), the kind of operations
that you engage in (trading, manufacturing, services), and the scale of your operations
(your turnover, company size, growth expectations) may all impact your taxability.
You can use the classifications feature in Oracle Applications to categorize or classify
your first parties and establishments under various classification schemes. For example,
you can create a classification scheme called "Operation Type", and define values such
as "Trading", "Manufacturing", and "Services", and associate the appropriate value for
each of your establishments. You can define another classification scheme called "Size of
Operations", and define values such as "Large", "Medium", "Small Scale Industry", and
so on.
The businesses or operations that you have might determine how the tax regulatory
environment impacts you. Manufacturing operations, for example, have different
impacts than trading operations.
In analyzing your operations, you can ask three questions that correspond to the three
main classifications of a transaction:
• What do you do? (Transaction)
• What products do you buy or sell? (Product)
• Who are your customers and suppliers? (Party)
What do you do?
Identify and classify the transactions you enter into. For example, do you primarily sell
physical goods? If you do, do you manufacture them, or do you buy and sell them
without additional manufacturing? Do you sell these goods in another state or
province? Do you export these goods? Do you provide or use services? And are these
service local only, or are they also overseas?
Use the Trading Community Architecture (TCA) and E-Business Tax to classify and
categorize your transactions in a common manner across your organization. You can
classify your transactions using a five-level classification scheme that you can choose
from on a transaction.
This table illustrates how you can categorize transactions, using a three-level
classification structure:
Classification Level
Purchase Top (0)
• Purchase for manufacture of goods for
sale
1

• Purchase for manufacture for Export
Sales
2
• Purchase for manufacture for Domestic
Sales
2
• Purchase for resale 1
• Domestic purchases for resale 2
• Import of goods for resale 2
• Import of goods for domestic resale 3
• Import of goods for export 3
• . . . 3
• . . . 1
Sale Top (0)
• Goods manufactured by selling
establishment
1
• Domestic sales 2
• Interstate sale 3
• Intrastate sale 3
• Export sales 2
• . . . 2

• . . . 1
The top-level values of the structure ("Purchase" and "Sale") are seeded and correspond
to the high-level classification of transactions (also called "tax event classes"). You can
define up to five sub-levels of classifications under the top-level.
You can define rules for a transaction business category at any level that you need. For
example, in some cases it might be sufficient to distinguish between an export sale and
a domestic sale. In other cases, you may need to distinguish between an inter- and an
intra-state sale.
What products do you buy or sell?
The products that you sell may impact the taxes that you are subject to. For example,
you must register for (and therefore collect and remit) service taxes only if you provide
taxable services. If you manufacture goods for export, you may not be subject to taxes
on the purchases that go into the manufacture of such goods.
Use the TCA and E-Business Tax to classify both finished goods and raw materials and
items used in the manufacture of your finished goods. You can reuse the classifications
associated with Inventory items (using Oracle Inventory Item Category) for tax
purposes as well. You can also create new item category sets within E-Business Tax
specifically for tax.
You can structure your inventory item classifications into a five-level classification
scheme, which you can then use to define rules.
This table illustrates an extract of product classifications that are used in the United
Kingdom:
Main Category Subcategory Description
055 AUTOMOTIVE
ACCESSORIES FOR
AUTOMOBILES, BUSES,
TRUCKS
055 04 Air Bags, Automotive
055 05 Anti-theft and Security
Devices, Automotive
055 06 Automobile Top Carriers

Main Category Subcategory Description
. . .
070 AUTOMOTIVE VEHICLES
AND RELATED
TRANSPORTATION
EQUIPMENT
070 03 Ambulances and Rescue
Vehicles
070 06 Automobiles and Station
Wagons
070 08 Bookmobiles Complete
. . .
You can implement the above structure in Oracle Inventory using item categories.
Create a two-segment structure called "Main Category" and "Subcategory." For the
Main Category segment, define 055 and 070 as the list of choices; for the using the above
example, you can classify an item by associating the identifier 055.04 with it to indicate
that it belongs to the "Air Bags, Automotive" category. If an item is associated with a
category 055, it means that it belongs to the broader category of "Automotive
Accessories For Automobiles, Buses, Trucks." You can then use E-Business Tax to create
two product fiscal classification types, one to correspond to the Main Category and the
other the Subcategory. You can then define tax rules using one or both of these
classifications.
Who are your customers and suppliers?
The types of customers and suppliers that you do business with can impact your tax
requirements, for example, the taxes that you are subject to, or the tax status or tax rate
that applies.
For example, consider a company in the United Kingdom that supplies physical goods
to another country that is also a member state of the European Union. The transaction
rate for UK VAT is either the standard VAT rate or a zero rate, depending on whether
the customer is registered for VAT in the country to which the supply is made. You can
capture this information, for example, by classifying your customer as "Registered in
another EU country". You can use this classification in your tax rules to derive the
appropriate status for this customer (and other customers similarly classified).
Another example is a company in Argentina that sells to customers that are not
registered for VAT in Argentina. In this case, the company needs to charge these

customers another tax, called Additional VAT. Again, you can classify this customer as
"Not Registered for VAT" and use this in your tax rules to charge the Additional VAT.
In addition to classifying your customers and suppliers for tax applicability, you can
also record the tax registrations that your customers and suppliers hold with one or
more tax authorities. You can also record the details of each registration, including the
tax registration number, and the registration type and status.
What taxes am I subject to?
For each of the countries in which you operate, you will need to analyze your tax
environment.
Each country can have one or more systems of taxation. Each system deals with the
taxation of specific aspects of a business transaction. For example, a Sales taxation
system deals with the rules and regulations concerning how a sale should be taxed.
Similarly, a Value Added Tax (VAT) taxation system deals with how the value addition
in a manufacturing and/or sales lifecycle needs to be taxed.
A single system of taxation is called a tax regime. A tax regime is implemented by one or
more distinct charges. Each such specific charge is called a tax. Therefore, a tax regime
may include one tax only or several different taxes.
The imposition of a tax is limited typically by a geographical boundary. In most cases,
this geographical boundary identifies a contiguous political or administrative area, such
as a city or a county. In some cases, a tax may be imposed or may vary according to a
non-political demarcation, such as a free-trade zone. The incidence of any tax on a
specific geographical area is called a tax jurisdiction.
You can create a tax jurisdiction for a country, a state within a country, a county within
a state, or a city within a county. In certain cases, a tax jurisdiction may need to
encompass, for example, two or more cities, or an entire county plus one city in a
neighboring county.
See: Country Setup Examples, page 4-1 for detailed examples of setting up tax
regimes and taxes in E-Business Tax.

Setting Up Applications for Oracle E-Business Tax 2-1
2
Setting Up Applications for Oracle
E-Business Tax
Implementation Checklist for Oracle E-Business Tax
This table provides a checklist of the mandatory and optional implementation steps in
other applications for E-Business Tax. Some optional implementation steps may be
conditionally mandatory, depending on your overall setup.
Note: You must have access to the system administrator responsibility
to perform many of these tasks.
Step Number Step Description Mandatory/Optional
1 Setting Up Tax Users, page 2-2 Optional
2 Setting Profile Option Values, page
2-2
Optional
3 Setting Up Lookup Codes, page 2-8 Optional
4 Setting Up TCA Geography
Hierarchy, page 2-10
Optional
5 Setting Up Legal Entity, page 2-12 Mandatory
6 Setting Up Operating Units, page 2-
15
Mandatory

7 Setting Up Accounts and Accounting
Information, page 2-16
Mandatory
8 Setting Up TCA Classifications, page
2-16
Optional
9 Setting Up Oracle Inventory, page 2-
17
Optional
Setting Up Tax Users
Set up your tax users and assign each user a tax-related responsibility. Oracle
E-Business Tax provides these seeded responsibilities:
• Tax Manager. Assign this responsibility to users who will set up and maintain tax
configuration data. The tax manager responsibility is the responsibility with the
highest level of access to E-Business Tax functionality.
If you want to include the GL Tax Options window, you must assign a data access
set to the GL: Data Access Set profile option under the Tax Manager responsibility.
• Tax Administrator. Update and assign this responsibility to users who will provide
E-Business Tax technical setup and support services. You can update this
responsibility according to the duties of each tax administrator user.
• Oracle Tax Simulator. Assign this responsibility to users who test tax setups with
the Oracle Tax Simulator.
You can also set up new E-Business Tax menus and responsibilities according to your
requirements.
Related Topics
Responsibilities Window, Oracle Applications System Administrator's Guide – Security
Users Window, Oracle Applications System Administrator's Guide – Security
Menus Window, Oracle Applications System Administrator's Guide – Security
Data Access Sets, Oracle General Ledger Implementation Guide
Setting Profile Option Values
Set values for E-Business Tax profile options to control the availability of certain tax
options and to maintain your Vertex or Taxware installation.

The table in this section summarizes E-Business Tax profile option information:
• The Default column displays either the default profile option value in italics, or No
Default if none exists.
• The User Access column indicates whether you can view or update the profile
option.
• The System Administration: Site, Application, Responsibility, and User columns
indicate at which levels the system administrator can update these profile options.
The key for this table is:
• Update: You can update the profile option.
• View Only: You can view the profile option but cannot change it.
• No Access: You cannot view or change the profile option.
Profile
Option
Defau
lt
User
Access
System
Administratio
n: Site
System
Administratio
n: Application
System
Administration:
Responsibility
System
Administration: User
eBTax:
Allow Ad
Hoc Tax
Changes
Yes No
Access
Update Update Update No Access
eBTax:
Allow
Manual Tax
Lines
Yes No
Access
eBTax:
Allow
Override of
Customer
Exemptions
Yes No
Access
eBTax:
Allow
Override of
Tax
Classificatio
n Code
Yes No
Access

Profile
Option
Defau
lt
User
Access
System
Administratio
n: Site
System
Administratio
n: Application
System
Administration:
Responsibility
System
Administration: User
eBTax:
Allow
Override of
Tax
Recovery
Rate
No
Defau
lt
No
Access
eBTax:
Inventory
Item for
Freight
Freigh
t
Charge
No
Access
eBTax:
Invoice
Freight as
Revenue
No No
Access
eBTax:
Read/Write
Access to
GCO Data
Yes No
Access
eBTax
Taxware:
Service
Indicator
Non-S
ervice
View
Only
Update No Access No Access No Access
eBTax
Taxware:
Tax
Selection
Jurisdi
ction
and
Tax
View
Only
eBTax
Taxware:
Use Nexpro
No No
Access
eBTax
Vertex: Case
Sensitive
Yes View
Only

eBTax: Allow Ad Hoc Tax Changes
The eBTax: Allow Ad Hoc Tax Changes profile option controls which users can make
ad hoc tax changes on the transaction line, such as selecting a different tax status or tax
rate. The changes that a user can make also depend upon the details of the applicable
tax setups.
If the tax rate associated with a tax has the Allow Ad Hoc Rate option enabled, then
users can override the calculated tax rate on the transaction line.
See: Setting Up Tax Rates, Oracle E-Business Tax User Guide for more information.
eBTax: Allow Manual Tax Lines
The eBTax: Allow Manual Tax Lines profile option controls which users can enter
manual tax lines on the transaction for the tax setups that allow this update.
If the tax configuration has the related options enabled, then users can enter manual tax
lines on the transaction for the applicable tax.
The related tax setups are:
• Taxes: Allow Entry of Manual Tax Lines
• Configuration Owner Tax Options:
• Allow Entry of Manual Tax Lines
• Allow Manual Tax Only Lines
eBTax: Allow Override of Customer Exemptions
The eBTax: Allow Override of Customer Exemptions profile option controls the display
of the Tax Handling field on the transaction line. You use the Tax Handling field to
apply and update customer tax exemptions to transactions.
If you set the eBTax: Allow Override of Customer Exemptions profile option to Yes, you
must also complete the related setups for tax exemptions.
eBTax: Allow Override of Tax Classification Code
The eBTax: Allow Override of Tax Classification Code profile option controls whether
users can update the tax classification code that is defaulted to the transaction line.
E-Business Tax defaults the tax classification code to the transaction line according to
the defaulting hierarchy defined for the operating unit and application. See: Using
Application Tax Options, Oracle E-Business Tax User Guide for more information.
eBTax: Allow Override of Tax Recovery Rate
The eBTax: Allow Override of Tax Recovery Rate profile option controls which users

can enter or update the calculated tax recovery rates on the transaction for the tax
recovery rate setups that allow this update.
If the tax recovery rate associated with a tax has the Allow Ad Hoc Rate option enabled,
then users can override the calculated tax recovery rate on the transaction.
The meaning of ad hoc entry of tax recovery rates differs according to the source
application for the transaction:
• Payables - The user can only select another previously defined recovery rate for the
tax.
• Procurement - The user can either select another previously defined recovery rate
for the tax or enter a new recovery rate.
See: Setting Up Tax Recovery Rates, Oracle E-Business Tax User Guide for more
information.
eBTax: Inventory Item for Freight (Oracle Order Management only)
The eBTax: Inventory Item for Freight profile option lets Order Management use an
Inventory item defined as Freight on Receivables transaction lines. You can use the
freight Inventory item to control the tax rate on taxable freight amounts.
The values for this profile option are:
• Freight Charge - The freight Inventory item applies to external Receivables
transactions.
• Freight for Intercompany - The freight Inventory item applies to internal Receivables
transactions only.
You must also set the eBTax: Invoice Freight as Revenue profile option to Yes.
Note: You may also need to set the OE: Item Validation Organization
profile option.
eBTax: Invoice Freight as Revenue (Oracle Order Management only)
The eBTax: Invoice Freight as Revenue profile option controls whether to consider
freight amounts as taxable line items.
Set the eBTax: Invoice Freight as Revenue profile option to Yes, if you are required to
tax freight amounts. The freight amounts entered in the Order Management Ship
Confirm window are then passed to Receivables transactions as taxable line items.
If you set the eBTax: Invoice Freight as Revenue profile option to Yes, you must also set
the eBTax: Inventory Item for Freight profile option.

eBTax: Read/Write Access to GCO Data
The eBTax: Read/Write Access to GCO Data profile option controls whether users can
set up tax configuration data for the global configuration owner.
If you set the eBTax: Read/Write Access to GCO Data profile option to Yes, then the
applicable users can set up taxes and related configuration data for the global
configuration owner. Legal entities and operating units can then share the global
configuration owner tax setups.
See: Configuration Options in Oracle E-Business Tax, Oracle E-Business Tax User Guide
for more information.
eBTax Taxware: Service Indicator
The eBTax Taxware: Service Indicator profile option indicates whether taxes are
calculated on service or a rental transactions.
The Taxware API parameter that accepts this profile option value is JurLink.ServInd.
• Service - Service transaction.
• Rental - Rental transaction.
• Space - Non-service transaction.
eBTax Taxware: Tax Selection
The eBTax Taxware: Tax Selection profile option indicates whether Taxware uses
jurisdiction-level jurisdiction codes to calculate taxes.
The Taxware API parameter that accepts this value is TaxSelParm of Taxfn_Tax010.
• Tax only - Taxware calculates tax based on the ship-to address only.
• Jurisdiction and Tax - Taxware calculates tax based on all jurisdiction information,
including ship-to, ship-from, point of order origin (POO), and point of order
acceptance (POA).
eBTax Taxware: Use Nexpro
The eBTax Taxware: Use Nexpro profile option indicates whether Taxware uses the
Nexpro functionality. If you enable this option, additional configuration is required on
the Taxware side of the integration to achieve nexus-based taxation.
The Taxware API parameter that accepts this value is TaxLink.UseNexproInd.
See: Technical Reference, Oracle E-Business Tax: Vertex Q-Series and Taxware Sales/Use Tax

System Implementation Guide for information about the Nexpro functionality.
eBTax Vertex: Case Sensitive
the eBTax Vertex: Case Sensitive profile option enables case-sensitive searches of Vertex
tax calculation data. The default value is Yes.
Set this profile option if you intend to use Vertex to calculate tax on transactions.
Setting Up Lookup Codes
Use the Application Object Library Lookups window to maintain existing lookup codes
and define additional lookup codes for E-Business Tax lookup types.
Note: E-Business Tax does not perform validation on updated or
disabled lookups. If you want to disable, update, or apply an end date
to an E-Business Tax lookup type, please ensure that the applicable
values are not in use in the E-Business Tax setup.
ZX_INPUT_CLASSIFICATIONS and ZX_OUTPUT_CLASSIFICATIONS
Use the ZX_INPUT_CLASSIFICATIONS and ZX_OUTPUT_CLASSIFICATIONS
lookup types to create tax classification codes for use in tax determination.
Release 11i tax codes and tax groups migrate to E-Business Tax as tax classification
codes. Payables and Purchasing tax codes migrate as tax classification codes under
ZX_INPUT_CLASSIFICATIONS. Receivables and Projects tax codes migrate as tax
classification codes under ZX_OUTPUT_CLASSIFICATIONS. You can set up additional
tax classification codes for use with a migrated tax data model or as an additional
determining factor in tax determination.
ZX_WEB_EXP_TAX_CLASSIFICATIONS
Use the ZX_WEB_EXP_TAX_CLASSIFICATIONS lookup type to create tax
classification codes for use in tax determination for transactions originating from
Internet Expenses.
ZX_EXEMPTION_REASON_CODE
Use the ZX_EXEMPTION_REASON_CODE lookup to create exemption reason lookup
code for use in tax exemptions. The exemption reason is a user-defined code that lets
you monitor the use of customer or product tax exemptions issued by the tax authority
and applied to specific transactions.
When you set up a tax exemption, you can use the exemption reason to identify the
reason for this exemption or to monitor a customer's application for an exemption. At
transaction time, E-Business Tax only considers certain tax exemptions if the exemption
reason and certificate number entered on the transaction line match the exemption

definition.
ZX_JEBE_VAT_TRANS_TYPE
Use the ZX_JEBE_VAT_TRANS_TYPE lookup type to create tax transaction types for
use with tax rate codes. You use transaction types when you set up a tax rate.
Tax rate transaction types represent local tax authority codes both for reporting
purposes and for controlling which rates appear on an invoice. See: Setting Up Tax
Rates, Oracle E-Business Tax User Guide for more information.
ZX_REGISTRATIONS_REASON
Use the ZX_REGISTRATIONS_REASON lookup type to create tax registration reason
codes. You use registration reason codes when you set up a tax registration to represent
the reason for the tax registration.
The tax registration reason code is for tax reporting purposes only. See: Setting Up a
Tax Registration, Oracle E-Business Tax User Guide for more information.
ZX_REGISTRATIONS_TYPE
Use the ZX_REGISTRATIONS_TYPE lookup type to create tax registration type codes.
You use tax registration type codes when you set up a tax registration to organize your
tax registrations into categories.
E-Business Tax provides these seeded tax registration types: CNPJ; CPF; CUIL; CUIT;
DNI; NIT; OTHERS; VAT. The tax registration types CPF, CNPJ, and OTHERS are used
in tax registration number validation for Brazil. All other seeded tax registration types,
and the tax registration types that you define, are for tax reporting purposes only.
See: Setting Up a Tax Registration, Oracle E-Business Tax User Guide for more
information.
ZX_REGISTRATION_STATUS
Use the ZX_REGISTRATION_STATUS lookup type to create tax registration status
codes. You use tax registration status codes as determining factors in tax rules.
E-Business Tax provides these seeded tax registration types:
Lookup Code Description
Agent The company acts as a withholding agent for
the tax authority for the applicable tax.
Registered The company is registered for the applicable
tax.

Not Registered The company is not registered for the
applicable tax.
See: Setting Up Tax Rules, Oracle E-Business Tax User Guide for more information.
ZX_TAX_TYPE_CATEGORY
Use the ZX_TAX_TYPE_CATEGORY lookup type to create tax types. You use tax types
when you set up a tax.
You can use tax types to classifies taxes for tax reporting purposes. See: Setting Up
Taxes, Oracle E-Business Tax User Guide for more information.
The ZX_TAX_TYPE_CATEGORY lookup type contained these seeded tax types:
Sales Direct taxes that are collected from the
consumer by the supplier and paid to the tax
authority.
VAT Value added or cascading taxes.
Excise Taxes on the production and manufacture of
goods.
Customs Duty Taxes charged on imported and exported
products.
Environmental Taxes charged as a result of environmental
regulations.
Setting Up TCA Geography Hierarchy
Set up and maintain the TCA geography hierarchy for each country where you have a
tax requirement. The TCA geography hierarchy provides a single reference source for
all geographical and location-based information for all E-Business Suite applications.
You use the TCA geography hierarchy in these cases:
• Taxes that are levied at a level lower than the country level, for example, state or
provincial taxes.

• Tax characteristics, such as the tax rate, vary at a lower level than the country level.
You must set up and maintain the TCA geography hierarchy before you can perform
these tax-related setups:
• Legal entities and establishments - Enter and maintain location information for
first party legal entities and the first party legal establishments. See: Setting Up
Legal Entity, page 2-12 for more information.
• Tax zones - Set up tax zones to represent regions according to a tax requirement.
Tax zones let you group together regions otherwise separated by geographical or
political boundaries where a tax treatment is identical throughout these regions.
See: Setting Up Tax Zones, Oracle E-Business Tax User Guide for more information.
• Tax regimes - Set up tax regimes for a country or tax zone. See: Setting Up Tax
Regimes, Oracle E-Business Tax User Guide for more information.
• Taxes - Set up taxes and specify the geographical level where each tax applies, such
as a city tax or a county tax. See: Setting Up Taxes, Oracle E-Business Tax User Guide
• Tax jurisdictions - Set up tax jurisdictions for a tax using geographies or tax zones.
See: Setting Up Tax Jurisdictions, Oracle E-Business Tax User Guide for more
information.
• Tax rules - Use the Geography determining factor class to set up determining factor
sets that use geographical locations in tax rules. Use the User Defined Geography
determining factor class to set up determining factor sets that use tax zones in tax
rules. See: Setting Up Tax Determining Factor Sets, Oracle E-Business Tax User Guide
Use TCA administration to maintain these aspects of the geography hierarchy:
• Country structure - Set up and maintain the hierarchical structure of a country. The
structure begins with the largest geography type and ends with the smallest
geography type. For example, the United States structure is: State > County > City >
Postal Code.
• Geography types - TCA provides seeded geography types for certain countries. The
geography types are used to create the geographical hierarchy of a country.
Perform these tasks for geography types:
• If necessary, set up new geography types in accordance with the structure of a
country.
• Set up and maintain aliases for specific Geography elements. An alias is an
alternative name for a geography type. You can use aliases as a part of your
address validation.

• Define the contents of a geography type within the context of a country
structure, for example, the states belonging to the United States or the provinces
belonging to Canada.
• Address validations - Set up mappings and validations between country address
formats and the TCA geography hierarchy. TCA uses the definitions you provide to
validate an address entry against the geography hierarchy. You use address
validation for taxes levied below the country level to verify that it is a valid address
for tax purposes.
For example, set up a list of Canadian provinces to verify each applicable address
against a valid province for the correct handling of Canadian PST.
Enable both the Geography Validation and Tax Validation options for each level for
which you need to create tax jurisdictions.
Related Topics
Setting Up Real-Time Address Validation, Oracle Trading Community Architecture
Administration Guide
Administrating Geography Hierarchy, Oracle Trading Community Architecture
Geography Name Referencing Process, Oracle Trading Community Architecture
Setting Up Legal Entity
Use the Legal Entity Configurator to set up these parties:
• First party legal entity - The legal entities that represent your company.
• First party legal establishments - The legal establishments that have or require tax
registrations, either implied or explicit, from one or more tax authorities.
• Legal authorities - The legal authorities that represent the tax authorities in the tax
regimes where you do business.
When you set up a legal entity or establishment, you can also set up party tax profile
details, including general information, rounding rule, and tax registrations. See: Party
Tax Profiles in Oracle E-Business Tax, Oracle E-Business Tax User Guide for more
information.
If you set up country default controls for the countries where you do business, then the
applicable tax regime and tax values default to the legal establishment tax registration
record. See: Setting Up Country Default Controls, Oracle E-Business Tax User Guide for
more information.

Setting Up Legal Entities
Set up the legal entities that represent your company. You must set up your company as
a legal entity before you can perform these tax-related setups:
• Party tax profiles - Party tax profiles contain the information that relates to a party's
transaction tax activities, and identify the legal entity to the tax authorities. See:
Setting Up a First Party Tax Profile, Oracle E-Business Tax User Guide for more
information.
• Configuration options - Configuration options indicate the tax regimes to which
the legal entity is subject. For each tax regime/legal entity assignment, the
configuration option also defines the way in which the legal entity uses tax
configuration data for the regime. See: Setting Up Configuration Options, Oracle
E-Business Tax User Guide for more information.
• Configuration owner tax options - Configuration owner tax options let you set
specific transaction tax processing and control options for a combination of
configuration owner and application event class. See: Setting Up Configuration
Owner Tax Options, Oracle E-Business Tax User Guide for more information.
When you set up legal entities for your company, set the Transacting Entity option to
Yes. See: Creating a Legal Entity, Oracle Financials Implementation Guide for more
information.
After you set up legal entities, set up the legal establishments that belong to the legal
entity.
Setting Up First Party Legal Establishments
Set up a legal establishment record for each office, service center, warehouse and any
other location within the company that requires a registration with a tax authority for
one or more taxes. You set up legal establishments under a parent legal entity.
When you set up legal establishments, you can also perform these tax-related setups:
• Party tax profiles - Set up a party tax profile for each legal establishment. You can
set up certain details of the party tax profile when you create the legal
establishment. See: Setting Up a First Party Tax Profile, Oracle E-Business Tax User
Guide for more information.
• Tax registrations - Set up tax registrations for each legal establishment. Depending
on the applicable tax requirements, you may need to set up more than tax
registration for an establishment. You must complete additional setup in E-Business
Tax to set up a tax registration. See: Setting Up a Tax Registration, Oracle E-Business
Tax User Guide for more information.
Use the Associate Business Entities region to link a tax-related business entity to a legal
establishment. See: Creating Establishments, Oracle Financials Implementation Guide for

more information.
Setting Up Legal Authorities
Set up a legal authority record for each tax authority that administers taxes in a tax
regime where you do business. While not mandatory, you can set up legal authority
records before you perform these tax-related setups:
• Tax authority tax profile - Set up tax authority tax profiles for your collecting,
reporting, and issuing tax authorities. A collecting tax authority manages the
administration of tax remittances. A reporting tax authority receives and processes all
company transaction tax reports. An issuing tax authority issues tax registration
numbers and tax exemption certificates. See: Setting Up a Tax Authority Tax Profile,
Oracle E-Business Tax User Guide for more information.
• Basic tax configuration - The collecting and reporting tax authorities appear in the
corresponding list of values on these tax configuration setups:
• Tax regimes
• Taxes
• Tax registrations - Enter the tax authority responsible for issuing the legal
establishment tax registration number. Update the collecting and reporting tax
authorities that default from the tax jurisdiction record. See: Setting Up a Tax
Registration, Oracle E-Business Tax User Guide for more information.
• Tax exemptions - Enter the tax authority that issues the tax exemption certificate.
See: Setting Up Tax Exemptions, Oracle E-Business Tax User Guide for more
information.
When you set up a legal authority, set the Legislative Category to Transaction Tax. See:
Creating and Updating Legal Authorities, Oracle Financials Implementation Guide for
more information.
Applying End Dates to Legal Entities
If you apply an end date to a legal entity or legal establishment, you must manually
apply the same end date to any related E-Business Tax entities that refer to the legal
entity or establishment.
• Legal entities - Apply an end date to the related tax reporting types, party
classifications, and configuration options.
• Legal establishments - Apply an end date to the related tax reporting types, party
classifications, and tax registrations.

Setting Up Operating Units
Set up the operating units that you need to process your tax transactions. An operating
unit is an organization that uses Oracle Cash Management, Order Management and
Shipping Execution, Oracle Payables, Oracle Purchasing, or Oracle Receivables.
For tax-related transactions:
• Assign users to responsibilities associated with the operating units for the
applicable applications.
• Assign user to an E-Business Tax responsibility. See: Setting Up Tax Users, page 2-2
• Assign operating units to the applicable primary ledgers. See: Setting Up Accounts
and Accounting Information, page 2-16.
You must set up and maintain operating units before you can perform these tax-related
setups:
• Party tax profiles - Set up a tax profile for each operating unit. The tax profile
indicates that the operating unit either uses the tax configuration of the legal entity
for transactions involving the legal entity and tax regime, or acts as a configuration
owner for the applicable tax regime. See: Setting Up an Operating Unit Tax Profile,
• Tax configuration options - Set up configuration options for applicable operating
units when you set up a tax regime or a party tax profile. The configuration option
associates the operating unit with tax regimes either to share the tax setup of the
global configuration owner or to act as a configuration owner and maintain a
separate tax setup. See: Configuration Options in Oracle E-Business Tax, Oracle
E-Business Tax User Guide for more information.
• Tax accounts - You can set up tax accounts for a single operating unit, or you can
share tax accounts across multiple operating units. The accounting segments
associated with the selected operating units are available for tax account purposes.
The calculated tax amounts post to the operating unit accounts that you define. See:
Setting Up Tax Accounts, Oracle E-Business Tax User Guide for more information.
• Configuration owner tax options - Set up configuration owner tax options for a
combination of operating unit configuration owner and application event class. The
configuration owner tax option settings let you modify the manner in which tax
data is configured. See: Setting Up Configuration Owner Tax Options, Oracle
E-Business Tax User Guide.
You can set up operating units using Oracle Human Resources, Oracle Inventory, or
Oracle General Ledger. The setup of operating units requires a number of prerequisite
setups. The number and kind of prerequisite setups depends upon your organization

and your tax implementation.
Related Topics
Updating Establishments, Oracle Financials Implementation Guide
Setting Up Accounts and Accounting Information
Set up accounts and accounting information for your tax transactions. You must set up
and maintain accounting information before you can set up tax accounts for the
applicable operating units. You set up tax accounts by operating unit for taxes, tax rates,
tax jurisdictions, tax recovery rates, and tax registrations of first party legal
establishments. See: Setting Up Tax Accounts, Oracle E-Business Tax User Guide for more
information.
Review and complete these accounting setup tasks according to your requirements:
• Ledgers - Set up the chart of accounts, accounting calendar and currency for the
primary ledger of your legal entities and, if applicable, any secondary ledgers.
• Legal entity balancing segments - Define balancing segment values for the legal
entities involved in tax transactions.
• Accounting setup - Create an accounting setup for each legal entity with the ledger
or ledgers that you created, and assign the applicable operating units to the primary
ledger.
• Complete the accounting setup - Complete the details of the accounting setups.
Related Topics
Setting Up General Ledger, Oracle General Ledger Implementation Guide
Creating Accounting Setups, Oracle Financials Implementation Guide
Setting Up TCA Classifications
Set up TCA classifications to classify third parties for tax purposes. You can define a
TCA class category and class codes specifically for use in tax determination. You can
also use standard classifications, such as the US Standard Industrial Classification (SIC)
codes, and assign these codes a party fiscal classification.
You must set up and maintain TCA classifications before you can perform these
tax-related setups:
• Party fiscal classifications - Set up party fiscal classifications for your customers
and customer sites and suppliers and supplier sites. Party fiscal classifications let

you classify the customer/customer site or supplier/supplier site according to
categories you define for tax-related purposes. See: Setting Up Party Fiscal
Classifications, Oracle E-Business Tax User Guide for more information.
• Party tax profiles - Assign party fiscal classifications to third party tax profiles to
use in tax determination for invoices associated with the party. See: Setting Up a
Third Party Tax Profile, Oracle E-Business Tax User Guide for more information.
• Tax rules - Use the Party Fiscal Classification determining factor class to set up
determining factor sets for use in tax rules. The Party Fiscal Classification
determining factor class uses the party fiscal classification type defined for a TCA
classification to identify the parties involved in a transaction. See: Setting Up Tax
Determining Factor Sets, Oracle E-Business Tax User Guide for more information.
Use TCA administration to set up and maintain classifications for use in party fiscal
classifications:
• Class category - Set up a class category to represent the party fiscal classification
type. These rules apply to enabling class category options for use with fiscal
classifications:
• Allow Multiple Parent Codes - You cannot enable this option. E-Business Tax
does not allow the class codes in a hierarchy to have multiple parents.
• Allow Parent Code Assignment - You can enable this option. E-Business Tax
lets you use the parent code to represent a class code within the hierarchy.
• Allow Multiple Class Code Assignments - You can enable this option.
E-Business Tax lets you assign more than one class code to the same entity
within the hierarchy.
• Class codes - Set up class codes under the class category to represent the detailed
classifications that belong to this class category. When you set up a party fiscal
classification using a TCA class category, the related class codes by default become
party fiscal classification codes.
Related Topics
Classifications Overview, Oracle Trading Community Architecture Administration Guide
Administering Classifications, Oracle Trading Community Architecture Administration
Guide
Setting Up Oracle Inventory
Use the Inventory Item Category functionality in Oracle Inventory to model product
fiscal classifications. You can create either a single product fiscal classification type or a

hierarchy of product fiscal classification types that matches the segments of the
Inventory category.
You can either use existing Inventory category sets or set up new Inventory category
sets for use with product fiscal classifications. After you set up Inventory item
categories and associate them with product fiscal classifications, the corresponding
product fiscal classification code defaults to the transaction line for any item that
belongs to the inventory category set. See: Setting Up Product Fiscal Classifications,
You can also specify a default Inventory category set for a given country. The Inventory
category associated with the item for this default category set defaults to the transaction
line. See: Setting Up Country Default Controls, Oracle E-Business Tax User Guide for
more information.
To model Inventory item categories for product fiscal classifications, you create
categories and category sets and associate product fiscal classification types to the
Inventory item category set.
The Inventory setup tasks to model product fiscal classifications are:
• Define Inventory Value Set
• Define Inventory Item Category Structure
• Define Category Set
• Define Inventory Categories
• Associate Inventory Items to Category Sets
You complete this setup task flow for each Inventory-based product fiscal classification
type that you plan to define.
Define Inventory Value Set
Define a value set with the value type that the segments of the item category structure
will use. Select a value type for the product fiscal classification codes that you intend to
define, for example, alphanumeric code or numeric codes.
Define Inventory Item Category Structure
Define a category structure for the Inventory category set that you will use to create
product fiscal classification types. If you are modeling a hierarchical classification
system, then create a segment for each level in the hierarchy.
Set subcategory segments as Not Required.
Define Category Set
Define a category set for the category structure that you created. Use a naming

convention that corresponds to the product fiscal classification type that you intend to
create.
Define Inventory Categories
Define the values for each segment of the category structure. The values represent the
product fiscal classification codes.
This is a sample representation of numeric codes for the Brazilian CNAE and NCM
product fiscal classification:
Structure Category Description
BR CNAE 3901... Polymers of ethylene, in
primary forms
BR CNAE 3901.10.10 Linear polyethylene
BR CNAE 3901.10.90 Other
Associate Inventory Items to Category Sets
Assign one or more Inventory categories belonging to the category set to the Inventory
items that you intend to use on transactions.
After you set up an Inventory item category set, use E-Business Tax to set up one or
more product fiscal classification types and associate them with the Inventory item
category set. If you are setting up a hierarchy of product fiscal classification types,
define the starting point and the number of digits that make up each level code value in
the hierarchy. See: Setting Up Product Fiscal Classifications, Oracle E-Business Tax User
Guide for more information.
Related Topics
Defining Categories, Oracle Inventory User's Guide
Defining Category Sets, Oracle INventory User's Guide

Managing Migrated Data 3-1
3
Managing Migrated Data
Migrated Tax Data in Oracle E-Business Tax
Oracle E-Business Tax provides a common model for setting up and using existing
Release 11i tax data for tax determination and tax calculation. This includes tax data
that was originally set up in Payables, Purchasing, Receivables, and Projects.
Note: This chapter discusses background information and user tasks
that are required to manage migrated tax data using the E-Business Tax
user interface. For a complete discussion of Release 11i data migration,
please see the Oracle Applications Upgrade Guide: Release 11i to Release 12.
The E-Business Tax solution for Release 11i migrated data includes these features:
• Migration of application-specific ownership of tax setup to the E-Business Tax
shared ownership model for all Procure-to-Pay and Order-to-Cash transactions.
• Migration of tax codes and rates (Payables tax codes and Receivables VAT taxes) to
the E-Business Tax Regime-to-Rate flow.
• Migration of existing tax codes and tax groups, and existing defaulting hierarchies,
to E-Business Tax as tax classification codes.
• Tax determination and tax calculation based on the tax classification code.
The Release 11i migration solution lets you begin using E-Business Tax according to
your existing tax setup with a minimum number of changes. This solution allows for a
gradual adaptation of the E-Business Tax setup and tax determination processes
according to your needs. Once you complete the transition to E-Business Tax processes,
you can disable the Release 11i migrated solution with no loss of service.

Data Ownership
In Release 11i, each application owned and maintained its own tax codes and rates for
use with its application-specific transactions. Because E-Business Tax provides a single
source for all transactions for tax determination and tax calculation services, the
ownership of the tax setup moves to the E-Business Tax shared ownership model. In
this model all legal entities and operating units of the company can share the same tax
setup, while individual operating units may need to own tax setup for specific
requirements as defined by the tax authority.
Existing operating units with Release 11i tax setup migrate as party-specific
configuration owners, with the operating unit owning the tax setup. If a Receivables or
Projects tax setup contains location-based tax codes, then these tax codes migrate as part
of the common configuration, with the global configuration owner owning the
location-based tax setup.
If you designate an operating unit with migrated tax setup to use the subscription of the
legal entity, you can still make use of the tax classification code model for tax
determination and tax calculation. See: Tax Classification Codes in Oracle E-Business
Tax, page 3-5.
Transaction Handling
In Release 11i, Payables held summary tax distributions and allocations without
showing taxable amount details or tax line information. Procurement transactions did
not carry explicit tax lines and distributions, and every transaction query was a
recalculation.
In E-Business Tax, there are these improves to the management of transaction handling
and display:
• One single repository with detailed and fully-allocated tax lines.
• Common single repository for tax distributions for Procure to Pay transactions.
• Document level summary tax lines for Payables transactions.
• Tax line and tax distribution IDs are stamped on Payables and Receivables tax lines
for reconciliation with product transactions.
• Tax line and tax distribution IDs from product transactions are carried to Subledger
Accounting for account reconciliation.
Tax Code Migration
In Release 11i, the application-specific tax code performed many tax-related functions.
These included the tax type, tax rate, offset taxes, recovery rules, taxable basis
determination, tax calculation, and maintenance of related tax accounts. The
Receivables tax group let you combine tax codes to calculate multiple taxes on single

taxable items. In keeping with the E-Business Tax setup, the functions of Payables and
Receivables tax codes migrate to E-Business Tax records according to the E-Business
Tax Regime-to-Rate model.
Note: For the Latin Tax Engine, tax regime codes are created based on
the Tax Rule Set (global_attribute13) in AR_SYSTEM_PARAMETERS
and taxes are created based on Latin Tax Categories. If you are using
the Latin Tax Engine to calculate taxes, do not create new tax regimes
and taxes, but continue to use the Latin tax categories, tax codes, and
tax groups.
This table describes the major features of tax code migration.
AP/AR Tax Codes E-Business Tax Record
OU country + Tax Type Tax Regime Code
Tax code name Tax Code and Tax Rate Code (minus numeric
identifiers)
All tax codes Tax Status of value Standard
Tax rate details:
• Percentage rate
• Effective date range
• Default recovery rate
• Offset tax code
Tax Rate record
Location-based tax rates • TCA geographies (locations)
• Tax rates
Tax account details:
• Set of books
• Tax code combination
Tax Rate tax account record:
• Ledger
• Recoverable/Non-recoverable code
combination

AP/AR Tax Codes E-Business Tax Record
Tax calculation details Tax classification code
Tax group with tax compounding • Tax regime and tax
• Taxable basis formula
Global Descriptive Flexfield Migration
In Release 11i, you used the global descriptive flexfield to hold tax-specific information
for Payables and Receivables transactions.
Release 11i global descriptive flexfield values migrate either as E-Business Tax entities
or entity attributes. This table describes the migration of global descriptive flexfields to
E-Business Tax.
Global Descriptive Flexfield E-Business Tax Destination
Tax Codes window • Tax attributes of taxes, tax statuses, and
tax rates
• Tax reporting types.
First and Third Parties Attributes in party tax profiles, tax
registrations, and party fiscal classifications
Items window Product fiscal classifications
Payables Invoices window Payables Invoices named columns
Payables Distributions window Payables Invoice Lines named columns
Tax group with tax compounding • Tax regime and tax
• Taxable basis formula
Related Topics
Oracle E-Business Tax, Oracle Financials and Oracle Procurement Functional Upgrade Guide:
Release 11i to Release 12

Tax Classification Codes in Oracle E-Business Tax
The migration of Release 11i tax codes and related tax setup to E-Business Tax is
designed such that after migration you can arrive at the same tax result for the same
transactions. Release 11i tax codes migrate to E-Business Tax as tax classification codes.
The tax classification code is a tax determining factor under the Transaction Input
Factor determining factor class. You can use tax classification codes and the Direct Tax
Rate Determination rule type to set up a tax determination model similar to Release 11i.
The elements of the direct tax rate determination model are:
• Tax classification code setup - Payables and Purchasing tax codes migrate as input
tax classification codes under the ZX_INPUT_CLASSIFICATIONS lookup type.
Receivables and Projects tax codes migrate as output tax classification codes under
the ZX_OUTPUT_CLASSIFICATIONS lookup type.
You can use these lookup types to define additional tax classification codes
according to your requirements.
• Tax classification code assignments - E-Business Tax replaces the Release 11i tax
code assignments to products, parties, and application system options with tax
classification code assignments. You can update these tax classification code
assignments for the customers, suppliers, and other entities involved in your
transactions.
• Defaulting hierarchy - Set up a defaulting hierarchy for tax classification codes
similar to the Release 11i Payables and Receivables tax code defaulting hierarchies.
You can update existing migrated tax classification code hierarchy assignments and
create new assignments.
• Tax conditions - Set up tax condition sets using the
TAX_CLASSIFICATION_CODE determining factor and condition values equal to
the tax rate codes that you need.
• Direct Tax Rate Determination rules - Set up tax rules under the Direct Tax Rate
Determination rule type to determine tax applicability, tax status, and tax rate.
At transaction time, E-Business Tax uses the tax classification code that is defaulted to
the transaction line to determine the tax status and tax rate for applicable taxes. You can
also manually enter a tax classification code on the transaction line.
Related Topics
Setting Up Lookup Codes, page 2-8
Using Application Tax Options, Oracle E-Business Tax User Guide
Using Tax Classification Codes, Oracle E-Business Tax User Guide

Setting Up Tax Determining Factor Sets, Oracle E-Business Tax User Guide
Tax Configuration Migration Path
The automated migration process converts Release 11i tax data to E-Business Tax tax
configuration data. Once the automated migration process is complete, you can begin
using your migrated tax data in E-Business Tax without any additional modifications or
updates.
Over time, you can apply incremental updates and modifications to migrated tax data
in order to gradually move from the Release 11i tax code model to the E-Business Tax
regime-to-rate and tax rules model. This gradual change can include:
• Replace tax classification codes with tax statuses and tax rates, and inactivate the
corresponding defaulting hierarchy.
• Use tax rules, for example, for status and rate determination and tax recovery.
• Use the TCA geography hierarchy.
• Create tax setup data under the Global Configuration Owner, to allow future
sharing of tax content.
As you become familiar with E-Business Tax setup tasks, you can create new tax data
directly in E-Business Tax, according to your requirements.
This table provides guidelines for using Release 11i tax data in E-Business Tax, and
indicates, where applicable, ways to increase your use of E-Business Tax features for
your tax determination needs.

Feature Release 11i Steps Release 11i Usage
in E-Business Tax
Using E-Business
Tax
Tax Definition • Define a tax code
for a new rate.
• Create a tax
group code for
tax codes that
occur together.
1. Define a tax
classification
code and create a
direct rate
determination
rule with this
code.
2. Define a tax rate
code in the
context of a tax
regime, tax, and
tax status.
• Use Place of
Supply or
Applicability
rules to
determine which
taxes apply.
• Use Status or
Rate rules, if
necessary.
• Use jurisdiction
rates.
• Use Recovery
Rules, if
applicable.
Tax Code Defaulting
Hierarchy
Define the defaulting
hierarchy using
system options and
select a tax code for
each source.
Update/define the
defaulting hierarchy
using Application
Tax Options and
select a tax
classification code for
each source.
Replace the
defaulting hierarchy
with tax rules for
specific tax
regulations.
Tax Jurisdictions Define location values
under a location
structure and
associate each value
with a tax rate.
Update/define
location values and
rates under:
• TCA geography
hierarchy and tax
zones
• Tax rates
Define multiple tax
rates for a
jurisdiction, for
different statuses and
rates.

in E-Business Tax
Using E-Business
Tax
Tax Compounding Define compounding
in tax groups.
• Compounding
setup upgraded
with taxes.
• Compounded
taxes upgraded
as taxable basis
formulae.
• Define
compounding at
tax level.
• Define
multi-level
compounding or
surcharges in
combination with
base rate
modifiers.
• Enable/disable
cross-regime
compounding.
Tax Inclusive Settings • Define Standard
Inclusive
Handling and
Standard
Non-Inclusive
Handling at
Receivables
System Options,
Tax Codes and
Tax Groups
levels.
• Set Tax
Inclusiveness at
the customer/site
and supplier/site
levels.
Update/define
Standard Inclusive
Handling, Standard
Non-Inclusive
Handling, and Special
Inclusive Handling at
the tax regime, tax,
and tax rate levels.
• Set Tax
Inclusiveness on
invoices at the
party/party site
and account tax
levels.
• Use
Configuration
Owner Tax
Options for a
combination of
configuration
owner and
application event
class to define
the order in
which
parties/registrati
ons are checked
for tax
inclusiveness and
to override tax
inclusive
handling on
transactions.

in E-Business Tax
Using E-Business
Tax
Tax Recovery • Allow
Recoverable
Taxes setting
defined at
Financials
System Options.
• Recovery rates
and recovery
rules associated
with tax codes.
• Allow Tax
Recovery setting
appears at both
tax regime and
tax levels, for
more granular
control.
• Recovery rates
upgraded under
the tax Primary
Recovery Type.
• Accounting-base
d recovery rules
upgraded as tax
rules for
recovery.
• Add tax recovery
rules by intended
use and/or
product fiscal
classification.
• Optionally define
a secondary
recovery type
and rates for
Canadian taxes.
Tax Rounding • Procurement: Set
Rounding Rule
and Rounding
Level under
Supplier/Supplie
r Site.
• Receivables: Set
Rounding Rule
and Rounding
Rule Override in
Receivables
System Options
• Update/define
Rounding Rule
and Rounding
Level under third
party tax profiles.
• Define Rounding
Rule and
Rounding Rule
Override at tax
regime and tax
levels,
independent of
product.
Use Configuration
Owner Tax Options
for a combination of
configuration owner
and application event
class to define a
rounding precedence
hierarchy for deriving
the rounding level
and rounding rule to
use on a transaction.

in E-Business Tax
Using E-Business
Tax
Tax Profile Options Set tax-related profile
options under
Payable, Receivables,
and Cash
Management.
Set tax-related profile
options under
E-Business Tax.
• Use the Tax and
Configuration
Owner Tax
Options settings
in conjunction
with profile
options for more
granular control.
• Set the eBTax:
Read/Write
Access to GCO
Data profile
option to restrict
user access to
creating and
modifying
installation-level
tax
configurations.
Tax Overrides • Receivables:
Allow Tax
Rounding
Override and
Allow Override
of Inclusive Tax
Lines.
• Tax Codes level:
Allow Tax Rate
Override.
• Responsibility
level: Allow
Override of
Customer
Exemptions and
Allow Override
of Tax Codes.
• Party tax profile:
Allow Tax
Rounding
Override and
Allow Override
of Inclusive Tax
Lines.
• Tax Status level:
Allow Tax Rate
Override.
Use Configuration
Owner Tax Options
for a combination of
configuration owner
and application event
class to define specific
override settings.

in E-Business Tax
Using E-Business
Tax
Tax Registrations Define separate single
tax registrations for:
• Supplier
• Supplier site
• Customer
• Customer site
• HR organization
Backward
compatibility for:
• Tax reporting
registration
number and tax
registration type
for
supplier/supplier
site party tax
profiles.
• Tax registrations
for
customer/custom
er site uses level.
• Tax registration
for first party
legal
establishment tax
profile.
• Define multiple
tax registrations
for the same
party and
different tax
regimes, taxes,
and tax
jurisdictions.
• Define detailed
information each
tax registration.
• Set up
user-definable
tax registration
types, statuses,
and reasons.
• Use tax
registration
statuses in tax
rules.

in E-Business Tax
Using E-Business
Tax
Tax Exemptions • Define tax
exemptions for
both items and
parties.
• Use Customer
Exemptions set at
Receivables
System Options.
• Allow Tax
Exemptions set
for tax code.
• Define tax
exemptions for a
combination of
party and tax
code.
• Tax exemptions
refer to customer
exemptions only;
set up item
exemptions as tax
exceptions.
• Allow
Exemptions set at
Configuration
Owner Tax
Options for a
combination of
configuration
owner and
application event
class.
• Allow Tax
Exemptions set at
tax regime level
to apply to all
taxes, and at tax
level for further
granularity.
Set up tax exemptions
as part of a third
party tax profile for a
customer/customer
site and tax regime,
and optionally for a
tax, tax jurisdiction,
tax status, and tax
rate.
Note: Exemptions
are applicable only
at the party site
level for ship-to.
Bill-to exemptions
are applicable only
when the
exemption is
defined at that
party level.

in E-Business Tax
Using E-Business
Tax
Tax Exceptions • Define tax
exemptions for
both items and
parties.
• Use Item Tax
Rate Exception
set at Receivables
System Options.
• Define item
exception rates in
the Tax Rate
Exceptions
window.
• Define item tax
exemptions for a
combination of
item and tax
code.
• Allow
Exemptions set at
Configuration
Owner Tax
Options for a
combination of
configuration
owner and
application event
class.
• Set up tax
exceptions for a
combination of
Inventory item,
tax regime, and
tax.
You can also set up
tax exceptions for
non-Inventory items,
and optionally apply
them to tax
jurisdictions, tax
statuses, and tax
rates.
Tax Formulas Define PL/SQL for tax
codes, and only for
taxable basis
formulas.
Define tax formulas
for tax regimes, or tax
regime and tax.
Define several
formula types,
including taxable
basis, calculate tax
amounts, and tax
compounding.

Setting Up Country-Specific Taxes 4-1
4
Setting Up Country-Specific Taxes
Country Setup Examples
This chapter contains sample tax configuration setup data for these tax regimes:
• United Kingdom Value Added Tax (VAT)
• Canadian Goods and Services Tax (GST) and Harmonized Sales Tax (HST)
• United States Sales and Use Tax
These examples are intended to demonstrate typical setups, option settings, and
interdependencies for each tax regime. They are not intended to provide an example of
best practices in all cases. The actual details of your own tax configuration setup will
depend on your company's specific internal and legal tax requirements.
United Kingdom Value Added Tax (VAT)
In the United Kingdom, Value Added Tax (VAT) is a tax on consumer expenditure that
is charged on most business transactions made in the United Kingdom and the Isle of
Man. VAT is also charged on goods and some services imported from places outside the
European Union, and on goods and some services coming into the United Kingdom
from the other European Union countries.
The current rates for VAT are:
• Standard rate of 17.5%.
• Reduced rate of 5% for certain goods and services, such as domestic fuel and energy
saving materials.
• Zero rate.
Some goods and services are exempt from VAT. In addition, there is a zero rate for

United Kingdom companies that supply goods and services to VAT-registered
customers in other European Union Member States, provided the company meets the
appropriate conditions.
The example in this section is based on the Customs and Excise Management Act 1979.
Setup Features
This tax setup example is for a first party registered in the United Kingdom and dealing
with domestic, intra-EU and extra-EU transactions. Setup features include:
• There are five possible tax statuses for VAT: standard, reduced, exempt, zero, and
Intra-European Union zero. The Intra-European Union zero status came into effect
in 2000. There is a separate tax status record for each tax status. All records have the
same tax regime code, configuration owner, and tax, as well as the same default
controls.
Although you do not need to report exempt transactions, this example illustrates
the creation of a specific Exempt tax status (with associated zero rate) to allow
simple identification for reporting or audit purposes. The separate Intra-European
Union zero status also allows for easy identification and reporting.
• A company of this kind can normally recover 100%, with standard exceptions
where 0% recovery is permitted.
• The setup uses tax rules rather than tax exceptions to define exempt and reduced
rate goods.
• The setup uses tax rules rather than tax exemptions to define exempt customers,
such as diplomatic and military customers.
• The exchange rate type is User, to take into account the different options available to
the company for expressing foreign currency transactions.
Inventory Category Sets and Category Codes
These Inventory category codes are used to identify goods and services for use in tax
rules.
See: Setting Up Oracle Inventory, page 2-17 for information about creating Inventory
item categories for product fiscal classifications.

Inventory Category Sets and Category Codes
Category Set Structure Name Category Code Description
GB VAT PRODUCT
CLASSIFICATION
Fiscal Classification GBG01 Goods
GB VAT PRODUCT
CLASSIFICATION
Fiscal Classification GBG0100 Normal Rated Goods
GB VAT PRODUCT
CLASSIFICATION
Fiscal Classification GBG0101 Zero Rated Goods
GB VAT PRODUCT
CLASSIFICATION
Fiscal Classification GBG0102 Exempt Goods
GB VAT PRODUCT
CLASSIFICATION
Fiscal Classification GBG0103 Reduced Rate Goods
GB VAT PRODUCT
CLASSIFICATION
Fiscal Classification GBS01 Services
GB VAT PRODUCT
CLASSIFICATION
Fiscal Classification GBS0100 Normal Rated
Services
GB VAT PRODUCT
CLASSIFICATION
Fiscal Classification GBS0101 Zero Rated Services
GB VAT PRODUCT
CLASSIFICATION
Fiscal Classification GBS0102 Exempt Services
GB VAT PRODUCT
CLASSIFICATION
Fiscal Classification GBS0103 Reduced Rate
Services
GB VAT RECOVERY Fiscal Classification GBR00 Normal Recovery
GB VAT RECOVERY Fiscal Classification GBR01 Zero Recovery
Intended Use GB Linked to Exempt
Sale
GB Linked to Exempt
Sale

Party Tax Profile: Tax Authority
You first set up the United Kingdom tax authority--HM Revenue and Customs--as a
legal authority using the Oracle Legal Entity Manager, and then create a party tax
profile for the legal authority.
Legal Authority
Field Value
Organization Name HM Revenue and Customs
Legislative Category Transaction Tax
Country United Kingdom
Address1 VAT Central Unit Alexander House
City Southend-on-Sea
Postal Code SS99 1AA
Status Active
Primary Address Yes
Tax Authority
Field Value
Party Type Tax Authority
Party Name HM Revenue and Customs
Address VAT Central Unit, Alexander House,
Southend-on-Sea, Essex, SS99 1AA
Country Name United Kingdom
Set as a Collecting Authority Yes

Field Value
Set as a Reporting Authority Yes
Tax Zones
The tax zone type European Economic Regions contains a tax zone record for each country
in the European Union. The setup values are the same for each country, except for the
Geography Name field.
Field Value
Tax Zone Name European Economic Community
Tax Zone Code EU
Start Date 01-Jan-05
Tax Zone Type Economic Regions
Code Type Tax Geography Code
Geography Type Country
Geography Name Austria
Belgium
...
United Kingdom
Tax Regime Setup
Field Value Field Value
Main Information

Tax Regime Code GB VAT Country Name United Kingdom
Name GB VAT Effective From 18-Jun-1979
Regime Level Country Used to Group
Regimes
No
Controls
Allow Tax Recovery Yes Allow Tax
Exemptions
No
Allow Override and
Entry of Inclusive Tax
Lines
Yes Allow Tax Exceptions No
Defaults
Tax Currency GBP Exchange Rate Type User
Minimum
Accountable Unit
.01 Reporting Tax
Authority
HM Revenue and
Customs
Rounding Rule Nearest Collecting Tax
Authority
HM Revenue and
Customs
Tax Precision 2 Default Recovery
Settlement
Immediate
Allow Tax Inclusion Standard
Non-Inclusive
Handling
Use Legal
Registration Number
No
Allow Multiple
Jurisdictions
No Allow Cross Regime
Compounding
No
Allow Tax Rounding
Override
Yes
Configuration
Options (if defined
from tax regime)

Party Name Party name Configuration for
Product Exceptions
Common
Configuration
Configuration for
Taxes and Rules
Common
Configuration
Effective From 18-Jun-1979
Tax Setup
Main Information
Tax Regime Code GB VAT Tax Currency GBP
Configuration Owner Global Configuration
Owner
Minimum
Accountable Unit
.01
Tax Source Create a new tax Rounding Rule Nearest
Tax GB VAT Tax Precision 2
Tax Name GB VAT Exchange Rate Type User
Tax Type VAT Reporting Tax
Authority
HM Revenue and
Customs
Effective From 18-Jun-1979 Collecting Tax
Authority
HM Revenue and
Customs
Geography Type Country Applied Amount
Handling
Recalculated
Parent Geography
Type
Country Set as Offset Tax No
Parent Geography
Name
United Kingdom Set Tax for Reporting
Purposes Only
No
Controls

Non-Inclusive
Handling
Allow Entry of
Manual Tax Lines
Yes
Allow Override and
Lines
Yes Use Legal
Registration Number
No
Allow Tax Rounding
Override
Yes Allow Duplicate Tax
Registration Numbers
No
Allow Override for
Calculated Tax Lines
Yes Allow Multiple
Jurisdictions
No
Tax Account
Controls
Tax Accounts
Creation Method
Create Tax Accounts
Tax Recovery
Controls
Allow Tax Recovery Yes Primary Recovery
Type
Standard
Allow Tax Recovery
Rate Override
Yes Default Primary
Recovery Rate Code
(Update page)
GB VAT STANDARD
REC RATE
Allow Primary
Recovery Rate
Determination Rules
Yes Allow Tax Rate Rules No
Allow Secondary
Recovery Rate
Determination Rules
No Default Recovery
Settlement
Immediate
Tax Status Setup

Main Information
Tax Regime Code GB VAT Tax GB VAT
Owner
Tax Name GB VAT
Standard Status
Tax Status Code GB VAT STANDARD Effective From 18-Jun-1979
Name GB VAT Standard Set as Default Tax
Status
Yes
Reduced Status
Tax Status Code GB VAT REDUCED Effective From 18-Jun-1979
Name GB VAT Reduced Set as Default Tax
Status
No
Exempt Status
Tax Status Code GB VAT EXEMPT Effective From 18-Jun-1979
Name GB VAT Exempt Set as Default Tax
Status
No
Zero Status
Tax Status Code GB VAT ZERO Effective From 18-Jun-1979
Name GB VAT Zero Set as Default Tax
Status
No
Intra EU Zero Status
Tax Status Code GB VAT INTRA EU
ZERO
Effective From 1-Jan-2000

Name GB VAT Intra EU
Zero
Set as Default Tax
Status
No
Default Controls (all
statuses)
Allow Tax
Exemptions
No Allow Tax Rate
Override
Yes
Allow Tax Exceptions No Default Recovery
Settlement
Immediate
Tax Jurisdiction Setup
This setup is for the one tax jurisdiction--the United Kingdom--for GB VAT.
Field Value
Tax Jurisdiction Code GB VAT
Tax Jurisdiction Name GB VAT
Tax Regime Code GB VAT
Tax GB VAT
Geography Type Country
Parent Geography Type Country
Parent Geography Name United Kingdom
Geography Name United Kingdom
Inner City Jurisdiction N/A
Precedence Level N/A
Collecting Tax Authority HM Revenue and Customs

Field Value
Reporting Tax Authority HM Revenue and Customs
Set as Default Tax Jurisdiction Yes
Default Effective From 18-Jun-1979
Tax Recovery Rate Setup
This example illustrates setup for the VAT recovery rates of standard and zero.
In some instances you may also need to set up a partial rate. A company's actual rate for
partial recovery will depend on the combination of its taxable and exempt statuses, as
agreed upon with HM Revenue and Customs.
Main Information
Tax Regime Code GB VAT Tax GB VAT
Tax Regime Name GB VAT Tax Name GB VAT
Owner
Recovery Type Standard
Standard Rate
Tax Recovery Rate
Code
GB VAT STANDARD
REC RATE
Set as Default Rate Yes
Percentage Recovery
Rate
100 Default Effective
From
18-Jun-1979
Effective From 18-Jun-1979 Allow Ad Hoc Rate N/A
Zero Rate

Tax Recovery Rate
Code
GB VAT ZERO REC
RATE
Set as Default Rate No
Percentage Recovery
Rate
0 Allow Ad Hoc Rate N/A
Tax Rate Setup
This example shows the standard VAT rate. There are two rate periods to reflect the rate
change After March 1991.
Main Information
Tax Regime Code GB VAT Tax Status Name GB VAT Standard
Tax Regime Name GB VAT Tax Rate Code GB VAT STANDARD
RATE
Tax GB VAT Configuration Owner Global Configuration
Owner
Tax Name GB VAT Rate Type Percentage
Tax Status Code GB VAT STANDARD
Rate Period 1
Percentage Rate 15 Default Effective
From
18-Jun-1979
Effective From 18-Jun-1979 Default Effective To 31-Mar-1991
Effective To 31-Mar-1991 Allow Tax Inclusion Standard
Non-Inclusive
Handling

Default Recovery
Rate Code
GB VAT STANDARD
REC RATE
Allow Override and
Lines
No
Recovery Type STANDARD Allow Ad Hoc Rate No
Default Recovery
Settlement
Immediate Adjustment for Ad
Hoc Amounts
Taxable Basis
Rate Period 2
Percentage Rate 17.5 Default Effective
From
1-Apr-1991
Effective From 1-Apr-1991 Allow Tax Inclusion Standard
Non-Inclusive
Handling
Default Recovery
Rate Code
GB VAT STANDARD
REC RATE
Allow Override and
Lines
Yes
Default Recovery
Settlement
Hoc Amounts
Taxable Basis
Party Tax Profile Setup
First Party Legal
Entity

Party Type First Party Legal
Entity
Party Name Party name
Main Information
Set for Self
Assessment/Reverse
Charge
Yes Rounding Rule Nearest
Rounding Level Header Set Invoice Values as
Tax Inclusive
No
Configuration
Options (if defined
from party tax
profile)
Tax Regime Code GB VAT Configuration for
Product Exceptions
N/A
Configuration for
Taxes and Rules
Common
Configuration
First Party Legal
Establishment
Establishment
Tax Registration
Tax Regime Code GB VAT Tax Registration
Reason
REVENUE_THRESH
OLD

Tax GB VAT Effective From 1-Jan-1991
Tax Registration
Number
GB123456789 Rounding Rule Nearest
Set as Default
Registration
Yes Set Invoice Values as
Tax Inclusive
No
Tax Registration
Status
REGISTERED Set for Self
Assessment/Reverse
Charge
Yes
Source Explicit
Product Inventory Fiscal Classifications
This example shows the setup for Inventory-based product fiscal classifications. These
fiscal classifications are used in the creation of tax rules for the tax GB VAT.
GB VAT PRODUCT CLASSIFICATION
Fiscal
Classification
Type Code
Start Position Number of
Characters
Product
Classification
Source
Effective From
GB VAT
PRODUCT
LEVEL 1
1 5 Inventory 18-Jun-1979
GB VAT
PRODUCT
LEVEL 2

GB VAT RECOVERY
Fiscal
Classification
Type Code
Start Position Number of
Characters
Product
Classification
Source
Effective From
GB VAT
RECOVERY
Product Intended Use Fiscal Classifications
This example shows the setup for an Inventory-based product intended use fiscal
classification type. This fiscal classification type is used in the creation of tax rules for
the tax GB VAT.
Fiscal
Classification
Type Code
Effective From Inventory
Category Set
Fiscal
Classification
Code
Country Name
INTENDED_US
E
18-Jun-1979 INTENDED_US
E
GB Linked to
Exempt Sale
United Kingdom
Tax Rule Defaults
This example shows the default values that are entered for each rule type for the
creation of tax rules for the tax GB VAT. In tax rules, the default value is the most
commonly expected result. E-Business Tax uses this value on a transaction when there
are no rules that determine another result.
Default Values for GB VAT Tax Rules
Rule Type Default Value
Determine Place of Supply Ship From
Determine Tax Applicability Applicable
Determine Tax Registration Bill From Party
Determine Tax Status GB VAT STANDARD

Rule Type Default Value
Determine Tax Rate GB VAT STANDARD RATE
Determine Taxable Basis STANDARD_TB
Calculate Tax Amounts STANDARD_TC
Tax Determining Factor Sets
This example shows tax determining factor sets that are used to create tax rules for the
tax GB VAT. There is one determining factor set per rule type. Each determining factor
set contains all the determining factors necessary to create tax conditions for the
corresponding tax rule.
None of the determining factors in these sets are set as Required.
GB VAT REGISTRATION
Determining Factor Class Class Qualifier Determining Factor Name
User Defined Geography Ship From Economic Regions
Geography Ship From Country
Geography Ship To Country
Transaction Input Factor Product Type
Registration Bill From Party Registration Status
Transaction Generic
Classification
Transaction Business
Category
GB VAT Place of Supply
User Defined Geography Ship From Economic Regions

User Defined Geography Bill From Economic Regions
Transaction Generic
Classification
Category
GB VAT Applicability
Geography Bill From Country
Geography Bill To Country
GB VAT Status
User Defined Geography Ship To Economic Regions

Product - Inventory Based GB VAT Product Level 2
Registration Bill To Party Registration Status
Transaction Generic
Classification
Category
GB VAT Recovery Rate
Product - Inventory Based GB VAT Recovery
Transaction Input Factor Intended Use
Tax Condition Sets
These examples show the tax condition sets that are used to create tax rules. Each tax
condition set makes use of one of the tax determining factor sets created for tax rules for
the tax GB VAT. The tax condition sets in these examples only show the determining
factors that are actually used to create tax conditions; the other determining factors in
the tax determining factor set (if any) are considered to be set to Ignore Condition.
GB Intra EU Goods Purchase and Reverse Charge
This example uses two tax condition sets to process a purchase by a UK customer from
a supplier in an EU country, and to determine a standard reverse charge on the goods
shipped from an EU country to the UK. The UK customer is GB VAT registered, but the
supplier is non-GB VAT registered.
The tax condition set GB INTRA EU GOODS PURCHASE uses the tax determining
factor set GB VAT PLACE OF SUPPLY in the Determine Place of Supply rule. The tax
condition set GB GOODS PURCHASE REVERSE CHARGE uses the tax determining
factor set GB VAT REGISTRATION in the Determine Tax Registration rule.

GB INTRA EU GOODS PURCHASE
Determining
Factor Class
Class Qualifier Determining
Factor Name
Operator Value
User Defined
Geography
Ship From Economic
Regions
Equal To European
Economic
Community
Geography Ship From Country Not Equal To United Kingdom
Geography Ship To Country Equal To United Kingdom
Transaction
Generic
Classification
Transaction
Business
Category
Equal To Purchase
Transaction
Registration Bill From Party Registration
Status
Equal To Registered in EU
(Non GB)
Transaction
Input Factor
Product Type Equal To Goods
GB GOODS PURCHASE REVERSE CHARGE
Determining
Factor Class
Factor Name
Operator Value
User Defined
Geography
Ship From Economic
Regions
Equal To European
Economic
Community
Geography Ship From Country Not Equal To United Kingdom
Transaction
Input Factor
Product Type Equal To GOODS
Transaction
Generic
Classification
Transaction
Business
Category
Equal To Purchase
Transaction

Determining
Factor Class
Factor Name
Operator Value
Status
(Non GB)
GB INTRA EU AND DOMESTIC SERVICES
This example uses the tax condition set GB INTRA EU AND DOMESTIC SERVICES to
process service transactions where the services are not explicitly defined, and thus the
place of supply is deemed to be Where the Supplier Belongs.
The tax condition set GB INTRA EU AND DOMESTIC SERVICES uses the tax
determining factor set GB VAT PLACE OF SUPPLY in the Determine Place of Supply
rule.
GB INTRA EU AND DOMESTIC SERVICES
Determining
Factor Class
Factor Name
Operator Value
User Defined
Geography
Bill From Economic
Regions
Equal To European
Economic
Community
Transaction
Input Factor
Product Type Equal To Services
GB DOMESTIC GOODS BILL FROM NON REG
This example uses the tax condition set GB DOMESTIC GOODS BILL FROM NON REG
to determine that a supplier has to be registered for UK VAT in order to charge UK
VAT on goods. If the supplier is not registered, then VAT is not applicable.
The tax condition set GB DOMESTIC GOODS BILL FROM NON REG uses the tax
determining factor set GB VAT APPLICABILITY in the Determine Tax Applicability
rule.

GB DOMESTIC GOODS BILL FROM NON REG
Determining
Factor Class
Factor Name
Operator Value
Transaction
Input Factor
Geography Ship From Country Equal To United Kingdom
Status
Not Equal To Registered
GB DOMESTIC SERVICES BILL FROM NON REG
This example uses the tax condition set GB DOMESTIC SERVICES BILL FROM NON
REG to determine that a supplier has to be registered for UK VAT in order to charge UK
VAT on services. If the supplier is not registered, then VAT is not applicable.
The tax condition set GB DOMESTIC SERVICES BILL FROM NON REG uses the tax
determining factor set GB VAT APPLICABILITY in the Determine Tax Applicability
rule.
GB DOMESTIC SERVICES BILL FROM NON REG
Determining
Factor Class
Factor Name
Operator Value
Transaction
Input Factor
Product Type Equal To SERVICES
Geography Bill From Country Equal To United Kingdom
Geography Bill To Country Equal To United Kingdom
Status
Not Equal To Registered
GB INTRA EU GOODS SALE ZERO RATE
This example uses the tax condition set GB INTRA EU GOODS SALE ZERO RATE to

determine when a zero rate is applicable for the Determine Tax Status rule.
The tax condition set GB INTRA EU GOODS SALE ZERO RATE uses the tax
determining factor set GB VAT STATUS in the Determine Tax Status rule.
GB INTRA EU GOODS SALE ZERO RATE
Determining
Factor Class
Factor Name
Operator Value
User Defined
Geography
Ship To Economic
Regions
Equal To European
Economic
Community
Geography Ship To Country Not Equal To United Kingdom
Transaction
Input Factor
Status
Equal To Registered
Registration Bill To Party Registration
Status
(Non GB)
Transaction
Generic
Classification
Transaction
Business
Category
Equal To Sales
Transaction
GB GOODS REDUCED RATE
This example uses the tax condition set GB GOODS REDUCED RATE to use a reduced
rate for sales of reduced rate goods.
The tax condition set GB GOODS REDUCED RATE uses the tax determining factor set
GB VAT STATUS in the Determine Tax Status rule.

GB GOODS REDUCED RATE
Determining
Factor Class
Factor Name
Operator Value
Product -
Inventory
Linked
GB VAT Product
Level 2
Equal To Reduced Rate
Goods
GB SERVICES REDUCED RATE
This example uses the tax condition set GB SERVICES REDUCED RATE to use a
reduced rate for sales of reduced rate goods.
The tax condition set GB SERVICES REDUCED RATE uses the tax determining factor
set GB VAT STATUS in the Determine Tax Status rule.
GB SERVICES REDUCED RATE
Determining
Factor Class
Factor Name
Operator Value
Product -
Inventory
Linked
GB VAT Product
Level 2
Equal To Reduced Rate
Services
GB GOODS ZERO RATE
This example uses the tax condition set GB GOODS ZERO RATE to use a zero rate for
sales of zero-rated goods.
The tax condition set GB GOODS ZERO RATE uses the tax determining factor set GB
VAT STATUS in the Determine Tax Status rule.
GB GOODS ZERO RATE
Determining
Factor Class
Factor Name
Operator Value
Product -
Inventory
Linked
GB VAT Product
Level 2
Equal To Zero Rated
Goods

GB SERVICES ZERO RATE
This example uses the tax condition set GB SERVICES ZERO RATE to use a zero rate
for sales of zero-rated services.
The tax condition set GB SERVICES ZERO RATE uses the tax determining factor set GB
GB SERVICES ZERO RATE
Determining
Factor Class
Factor Name
Operator Value
Product -
Inventory
Linked
GB VAT Product
Level 2
Equal To Zero Rated
Services
GB EXPORT GOODS OUTSIDE EU
This example uses the tax condition set GB EXPORT GOODS OUTSIDE EU for
transactions involving the export of goods to non-EU countries.
The tax condition set GB EXPORT GOODS OUTSIDE EU uses the tax determining
factor set GB VAT STATUS in the Determine Tax Status rule.
GB EXPORT GOODS OUTSIDE EU
Determining
Factor Class
Factor Name
Operator Value
User Defined
Geography
Ship To Economic
Regions
Not Equal To European
Economic
Community
Transaction
Input Factor
GB GOODS EXEMPT RATE
This example uses the tax condition set GB GOODS EXEMPT RATE for the sale of
goods with a zero-rated exempt status.
The tax condition set GB GOODS EXEMPT RATE uses the tax determining factor set GB

GB GOODS EXEMPT RATE
Determining
Factor Class
Factor Name
Operator Value
Product -
Inventory
Linked
GB VAT Product
Level 2
Equal To Exempt Goods
GB SERVICES EXEMPT RATE
This example uses the tax condition set GB SERVICES EXEMPT RATE for the sale of
services with a zero-rated exempt status.
The tax condition set GB SERVICES EXEMPT RATE uses the tax determining factor set
GB VAT STATUS in the Determine Tax Status rule.
GB SERVICES EXEMPT RATE
Determining
Factor Class
Factor Name
Operator Value
Product -
Inventory
Linked
GB VAT Product
Level 2
Equal To Exempt Services
GB PURCHASE LINKED TO EXEMPT SALE ZERO REC
This example uses the tax condition set GB PURCHASE LINKED TO EXEMPT SALE
ZERO REC for purchases linked to exempt sales with zero recovery.
The tax condition set GB PURCHASE LINKED TO EXEMPT SALE ZERO REC uses the
tax determining factor set GB VAT RECOVERY RATE in the Determine Recovery Rate
rule.

GB PURCHASE LINKED TO EXEMPT SALE ZERO REC
Determining
Factor Class
Factor Name
Operator Value
Transaction
Input Factor
Intended Use Equal To GB Linked to
Exempt Sale
GB PRODUCT ZERO RECOVERY
This example uses the tax condition set GB PRODUCT ZERO RECOVERY for
transactions on certain goods and services that have zero recovery.
The tax condition set GB PRODUCT ZERO RECOVERY uses the tax determining factor
set GB VAT RECOVERY RATE in the Determine Recovery Rate rule.
GB PRODUCT ZERO RECOVERY
Determining
Factor Class
Factor Name
Operator Value
Product -
Inventory
Linked
GB VAT
Recovery
Equal To Zero Recovery
Tax Rules
These examples show the tax rules created for the tax GB VAT. The tax rules make use
of the tax determining factor sets and tax condition sets created for GB VAT. Refer to
these sets to understand their usage in each tax rule.
For each tax condition used in a tax rule, the rule result applies when its corresponding
tax condition is evaluated as true.
Determine Place of Supply
This tax rule determines the place of supply on Intra-EU transactions for goods and
services.

Determine Place of Supply
Tax Rule Code Effective From Condition Set Order Rule Result
GB VAT PLACE
OF SUPPLY
1-Jan-2003 GB INTRA EU
GOODS
PURCHASE
90 Ship to, use bill to if
ship to is not found
GB INTRA EU
AND
DOMESTIC
SERVICES
105 Bill From
Determine Tax Applicability
This tax rule determines whether a supplier is registered for UK VAT in order to charge
VAT on goods and services.
Determine Tax Applicability
GB VAT
APPLICABILITY
1-Jan-2003 GB DOMESTIC
GOODS BILL
FROM NON
REG
50 Not Applicable
GB DOMESTIC
SERVICES BILL
FROM NON
REG
60 Not Applicable
Determine Tax Registration
This tax rule determines the tax registration when a UK VAT registered customer
purchases goods from a non-UK VAT registered supplier, where the goods are sent
from an EU country outside the UK to the UK.

Determine Tax Registration
GB VAT
REGISTRATION
1-Jan-2003 GB GOODS
PURCHASE
REVERSE
CHARGE
50 Bill To Party
Determine Tax Status
This tax rule determines the tax status of the transaction. Each rule result indicates the
tax status to use on the transaction if the corresponding condition is evaluated as true.
Determine Tax Status
GB VAT
STATUS
1-Jan-2003 GB INTRA EU
GOODS SALE
ZERO RATE
50 GB VAT INTRA EU
ZERO
GB EXPORT
GOODS
OUTSIDE EU
60 GB VAT ZERO
GB GOODS
ZERO RATE
70 GB VAT ZERO
GB SERVICES
ZERO RATE
80 GB VAT ZERO
GB GOODS
EXEMPT RATE
90 GB VAT EXEMPT
GB SERVICES
EXEMPT RATE
100 GB VAT EXEMPT
GB GOODS
REDUCED
RATE
110 GB VAT REDUCED

GB SERVICES
REDUCED
RATE
120 GB VAT REDUCED
Determine Recovery Rate
This tax rule derives a zero recovery rate for purchases linked to exempt sales with zero
recovery.
Determine Recovery Rate
GB VAT
RECOVERY
RATE
1-Jan-2003 GB PURCHASE
LINKED TO
EXEMPT SALE
ZERO REC
5 GB VAT ZERO
REC RATE
Canadian Sales Tax
In Canada, sales taxes exist at the federal level and at the provincial level. Goods and
Services Tax (GST) is a federal tax levied in provinces and territories across Canada on
many consumer products and professional services. Provincial Sales Tax (PST) varies by
province. The tax rates within each province apply to the value of goods or services
before GST is applied. The only exceptions are Quebec and Prince Edward Island,
where the sales tax applies to the value of goods or services after GST is applied.
A federal and provincial blended tax called Harmonized Sales Tax (HST) is levied in the
three participating provinces of Newfoundland and Labrador, Nova Scotia, and New
Brunswick. The HST operates as a single rate of 14%, of which six percent (6%)
represents the federal component and eight percent (8%) the provincial component.
The recovery of tax is made through a rebate and/or an Input Tax Credit (ITC),
depending on whether the purchases are intended for commercial or non-profit
activities. Some goods and services are exempt from GST and HST, such as health and
educational services.
Taxable goods and services are subject to one of the following statuses:
• Taxable: GST - 6%; HST - 14%
• Zero-rated

• Exempt
Tax status is generally determined by product. For the consumer, there is no difference
between zero-rated and exempt goods and services: the consumer either pays tax or
not. Although GST and HST are not charged on zero-rated goods and services, the tax
registrant can claim input tax credits to recover the GST or HST paid or owed on
purchases and the expenses incurred to provide them.
The example in this section is based on the changes to GST and HST rates effective July
1, 2006.
Examples
This section provides four examples of Canadian tax setup:
• Ontario Example 1 - GST and PST are typically applicable on most goods and
services. In this example, a tax is not applicable on a transaction. Since you will
typically set the tax applicability of a tax to Applicable, you will need to define a tax
rule to identify when a transaction is not applicable.
• Ontario Example 2 - The taxable basis for tax calculation is typically (selling price) *
(tax rate). In this example, the taxable basis is reduced in Ontario for the purchase of
portable homes to be used for construction purposes.
• Quebec Example 1 - In Quebec, PST is calculated based on the selling price plus
GST.
• Quebec Example 2 - In Quebec, PST is applied on most goods and services. For
transactions relating to resale, you can fully recovery the PST.
Prerequisites
Before you can set up the E-Business Tax tax configuration for these examples, you may
need to complete one or more of these tasks:
• Set up the legal entity for your Canadian company.
• Set up the legal establishment for your Canadian company.
• Set up legal authorities for Canada Revenue Agency, Ontario Ministry of Finance,
and the Ministere du Revenu du Quebec.
Tax Regime Setup
There are two tax regimes required for the above examples:
• CA GST HST, that contains the CA GST tax (it will also include CA HST, which is
not included in these examples).

• CA PST that contains the CA PST tax. The tax regime uses cross-regime
compounding for provinces such as Quebec, where GST is compounded with PST.
The CA GST HST regime has a compounding precedence of 1; the CA PST regime has a
compounding precedence of 2.
Main Information
Tax Regime Code CA GST HST Country Name Canada
Name CA GST HST Effective From 1-Jan-2001
Regime Level Country
Controls
Exemptions
Yes
Allow Override and
Lines
Defaults
Tax Currency CAD Exchange Rate Type User
Minimum
Accountable Unit
.01 Reporting Tax
Authority
Canada Revenue
Agency
Authority
Canada Revenue
Agency
Settlement
Immediate
Non-Inclusive
Handling
Use Legal
Registration Number
No
Allow Multiple
Jurisdictions
Yes Allow Cross Regime
Compounding
Yes

Allow Tax Rounding
Override
Yes Compounding
Precedence
1
Configuration
Options (if defined
from tax regime)
Product Exceptions
Common
Configuration
Configuration for
Taxes and Rules
Common
Configuration
Main Information
Tax Regime Code CA PST Country Name Canada
Name CA PST Effective From 1-Jan-2001
Controls
Exemptions
Yes
Allow Override and
Lines
Defaults
Tax Currency CAD Exchange Rate Type User
Minimum
Accountable Unit
.01 Reporting Tax
Authority
Canada Revenue
Agency

Authority
Canada Revenue
Agency
Settlement
Immediate
Non-Inclusive
Handling
Use Legal
Registration Number
No
Allow Multiple
Jurisdictions
Yes Allow Cross Regime
Compounding
Yes
Allow Tax Rounding
Override
Yes Compounding
Precedence
2
The tables below describe the first party legal establishment setup and tax registration
setups for Canada, Ontario, and Quebec. For Ontario Example 1, the registration status
of the legal establishment is a factor in determining whether the GST and/or PST are
applicable. For this example, the registration for this legal establishment will include
GST across Canada, PST registration in Ontario, and PST registration in Quebec.
You also need to create party tax profiles for each of the three taxing authorities:
Canada Revenue Agency for the GST across Canada, Ontario Ministry of Finance for
the Ontario PST, and Ministere du Revenu du Quebec for the Quebec PST. You need to
set up each of these tax authorities in the Legal Entity Manager as a legal authority for
transaction tax. The tax authorities are all both collecting and reporting tax authorities.
First Party Legal
Establishment
Establishment
Country Name Canada

Tax Registrations
Canada Registration
Tax Regime Code CA GST HST Source Explicit
Tax Registration
Number
10810 2831 RT0001 Effective From 1-Jan-2001
Set as Default
Registration
Yes Rounding Rule Nearest
Tax Registration
Status
REGISTERED Set Invoice Values as
Tax Inclusive
No
Issuing Tax Authority Canada Revenue
Agency
Set for Self
Assessment/Reverse
Charge
Yes
Ontario Registration
Tax Regime Code CA PST Source Explicit
Tax Registration
Number
9800 1120 Effective From 1-Jan-2001
Set as Default
Registration
No Rounding Rule Nearest
Tax Registration
Status
Tax Inclusive
No
Issuing Tax Authority Ontario Ministry of
Finance
Set for Self
Assessment/Reverse
Charge
Yes
Quebec Registration
Tax Regime Code CA PST Source Explicit

Tax Registration
Number
1515151515 TQ 0001 Effective From 1-Jan-2001
Set as Default
Registration
NO Rounding Rule Nearest
Tax Registration
Status
Tax Inclusive
No
Issuing Tax Authority Ministere du Revenu
du Quebec
Set for Self
Assessment/Reverse
Charge
Yes
Tax Setup
Main Information
Tax Regime Code CA GST HST Tax Currency CAD
Owner
Minimum
Accountable Unit
.01
Tax CA GST Tax Precision 2
Tax Name CA GST Exchange Rate Type User
Tax Type VAT Reporting Tax
Authority
Canada Revenue
Agency
Effective From 1-Jan-2001 Collecting Tax
Authority
Canada Revenue
Agency
Geography Type Province Applied Amount
Handling
Recalculated

Parent Geography
Type
Parent Geography
Name
Canada Set Tax for Reporting
Purposes Only
No
Compounding
Precedence
1
Controls
Non-Inclusive
Handling
Use Legal
Registration Number
No
Allow Override and
Lines
Yes Allow Duplicate Tax
No
Allow Tax Rounding
Override
Yes Allow Multiple
Jurisdictions
Yes
Allow Override for
Yes Allow Mass Creation
of Jurisdictions
Yes
Allow Entry of
Manual Tax Lines
Yes
Tax Account
Controls
Tax Accounts
Creation Method
Create Tax Accounts
Tax Recovery
Controls
Allow Tax Recovery Yes Primary Recovery
Type
Standard

Allow Tax Recovery
Rate Override
Yes Default Primary
Recovery Rate Code
(Update page)
FEDERAL REC RATE
Allow Primary
Recovery Rate
Determination Rules
Yes Secondary Recovery
Type
Reduced
Allow Secondary
Recovery Rate
Determination Rules
Yes Default Secondary
Recovery Rate Code
(Update page)
PROVINCIAL REC
RATE
Allow Tax Rate Rules No Default Recovery
Settlement
Immediate
Tax Status Setup
Create two standard statuses, one for GST (CA GST STANDARD) and one for PST (CA
PST STANDARD). The two statuses have the same settings.
Main Information
Tax Regime Code CA GST HST Tax CA GST
Owner
Tax Name CA GST
Standard Status
Tax Status Code CA GST STANDARD Effective From 1-Jan-2001
Name CA GST Standard Set as Default Tax
Status
Yes
Default Controls
Allow Tax
Exemptions
No Allow Tax Rate
Override
Yes

Allow Tax Exceptions No
Tax jurisdiction setup in Canada requires a separate record for each province. In
addition, provinces that apply GST and PST separately require two tax jurisdiction
records. Different PST tax rates can apply at the jurisdiction level. Because both GST
and PST apply to all transactions, neither jurisdiction takes precedence or is set as a
default jurisdiction.
This example shows the GST and PST tax jurisdictions for Ontario.
Ontario Tax Jurisdiction for GST
Field Value
Tax Jurisdiction Code CA ON
Tax Jurisdiction Name CA Ontario
Tax Regime Code CA GST HST
Tax CA GST
Geography Type Province
Parent Geography Name Canada
Geography Name ON
Collecting Tax Authority Canada Revenue Agency
Reporting Tax Authority Canada Revenue Agency

Field Value
Set as Default Tax Jurisdiction N/A
Ontario Tax Jurisdiction for PST
Field Value
Tax Jurisdiction Code CA ON
Tax Jurisdiction Name CA Ontario
Tax Regime Code CA PST
Tax CA PST
Parent Geography Name Canada
Geography Name ON
Collecting Tax Authority Ontario Ministry of Finance
Reporting Tax Authority Ontario Ministry of Finance
Set as Default Tax Jurisdiction N/A

Tax Recovery Rate Setup
The Quebec PST recovery example uses a standard 100% recovery rate. Actual reduced
rates at the provincial level are agreed upon with the provincial tax authority.
Main Information
Tax Regime Code CA PST Tax CA PST
Tax Regime Name CA PST Tax Name CA PST
Owner
Recovery Type Standard
Standard Rate
Tax Recovery Rate
Code
CA PST STANDARD
REC RATE
Percentage Recovery
Rate
100 Default Effective
From
1-Jan-2001
Effective From 1-Jan-2001 Allow Ad Hoc Rate N/A
Tax Rate Setup
This example uses the standard GST rate of 7%. The standard PST for most provinces in
Canada is 7%; however, the rate is 7.5% in Quebec and 8% in Ontario. As such, the PST
tax rates for Quebec and Ontario will also specify the tax jurisdiction. Additional rates
may also apply at the provincial level.
Main Information
Tax Regime Code CA GST HST Tax Status Name CA GST Standard
Tax Regime Name CA GST HST Tax Rate Code CA GST STD RATE

Tax CA GST Configuration Owner Global Configuration
Owner
Tax Name CA GST Rate Type Percentage
Tax Status Code CA GST STD
Rate Period
Percentage Rate 6 Default Effective
From
1-Jul-2006
Effective From 1-Jul-2006 Allow Tax Inclusion Standard
Non-Inclusive
Handling
Default Recovery
Rate Code
CA GST STD REC
RATE
Allow Override and
Lines
Yes
Default Recovery
Settlement
Hoc Amounts
Taxable Basis
Fiscal Classification Setup
You must set up these fiscal classifications for the corresponding examples:
• Product Intended Use - Set up these Inventory-based product intended use fiscal
classifications. Since these are Inventory-based, you must first create Inventory
category codes for these fiscal classifications:
• Ontario Example 2 - Create an intended use fiscal classification for construction
purposes.
• Quebec Example 2 - Create an intended use fiscal classification for resale
purposes.
• Non-Inventory Based Product Fiscal Classification - For Ontario Example 2, create

a non-Inventory-based product fiscal classification for portable homes.
Tax Formulas Setup
For Ontario Example 2, create a tax formula to represent the reduced taxable basis.
Field Value
Tax Formula Code CA TB PST ON MOBILE HOME
Name CA Taxable Basis PST ON Mobile Homes
Formula Type Taxable Basis
Taxable Basis Type Line Amount
Regime Code CA PST
Tax CA PST
Base Rate Modifier -50
For Quebec Example 1, create a tax formula to represent that PST is calculated upon the
sale price plus GST.
Field Value
Tax Formula Code CA TB GST INCLUDED
Name CA Taxable Basis GST Included
Formula Type Taxable Basis
Taxable Basis Type Line Amount
Regime Code CA PST
Tax CA PST

Field Value
Compounding Regime Code CA GST and HST
Compounding Tax CA GST
Compounding Rule Add
Enforce Compounding Yes
Tax Zone Setup
Create a tax zone to group together provinces that share the same compounding rule
for PST. In this case, both Quebec and Prince Edward Island calculate PST on the selling
price plus GST.
Field Value
Tax Zone Type CA GST Incl
Country Canada
Province Zone Creation Allowed Yes
Tax Zone Name CA QC and PE
Tax Zone Code CA QC AND PE
Start Date 1-Jan-2005
Code Type Tax Geography Code
Geography Names PE, QC

Tax Rule Defaults
Tax rule defaults simplify the tax rule setup and reduce the number of rules by
identifying the most common value for each rule type. For example, if GST is applicable
on most transactions, then the default value for the rule type Determine Tax
Applicability for the tax CA GST is Applicable.
Rule Type Tax Default
Determine Place of Supply CA GST, CA PST Ship To
Determine Tax Applicability CA GST, CA PST Applicable
Determine Tax Registration CA GST, CA PST Ship From Party
Determine Tax Status CA GST CA GST STD
Determine Tax Status CA PST CA PST STD
Determine Tax Rate CA GST CA GST STD RATE
Determine Tax Rate CA PST CA PST STD RATE
Determine Taxable Basis CA GST, CA PST STANDARD_TB
Calculate Tax Amounts CA GST, CA PST STANDARD_TC
Tax Rules Setup - Ontario Example 1
Since you will typically set the tax applicability of a tax as Applicable, you will need to
define a Determine Tax Applicability tax rule to identify when a transaction is not
applicable for GST and PST. In this particular example, the tax is not applicable when
the Ship From Party is Not Registered for the tax, and the transaction is a sales
transaction.
Tax Determining Factor Set
This table describes the tax determining factor set to use with this tax rule. This tax
determining factor set identifies the registration status of the ship from party and the
type of transaction.

Determining Factor
Class
Class Qualifier Determining Factor
Name
Required
Registration Ship From Party Registration Status Yes
Transaction Generic
Classification
Category
Yes
Tax Condition Set
This table describes the tax condition set to use with this tax rule. This tax condition set
indicates that the Ship From Party is Not Registered for this tax, and that this rule will
apply to Sales Transactions.
Determining
Factor Class
Class
Qualifier
Determining
Factor Name
Operator Value Ignore
Condition
Registration Ship From
Party
Registration
Status
Equal To Not
Registered
No
Transaction
Generic
Classification
Transaction
Business
Category
Equal To Sales
Transaction
No
If the values of this tax condition set are evaluated as true, then the result of the
Determine Tax Applicability rule is Not Applicable.
Tax Rules Setup - Ontario Example 2
Because the taxable basis formula for most transactions is (line amount) * (tax rate), you
will need to define a Determine Taxable Basis tax rule to identify when a different
taxable basis is needed and which taxable basis tax formula to use. In this example, the
taxable basis in Ontario is reduced for the purchase of mobile homes that are used for
construction purposes.
determining factor set identifies the shipping destination, the product, and the intended
use of the product.

Determining Factor
Class
Name
Required
Geography Ship To Province No
Product -
Non-Inventory Based
Level 3 Product Category No
User Defined
Geography
Ship To CA GST Incl No
Transaction Input
Factor
Intended Use No
Tax Condition Set
indicates that the shipping destination is Ontario, the product is a portable home, and
that the portable home it will be used for construction purposes.
Determining
Factor Class
Class
Qualifier
Determining
Factor Name
Condition
Geography Ship To Province Equal To ON (Ontario) No
Product -
Non-Inventor
y Based
Level 3 Product
Category
Equal To • CA
General
Goods
and
Services
• CA
General
Goods
• CA
Portable
Homes
No
Transaction
Input Factor
Intended Use Equal To CA
Construction
No

Determine Taxable Basis rule is the tax formula CA TB PST ON MOBILE HOME. This
formula is used to determine the taxable basis, which results in a 50% reduction in the
taxable basis.
Tax Rules Setup - Quebec Example 1
As mentioned above, the taxable basis formula for most transactions is (line amount) *
(tax rate). Since the PST in Quebec is calculated on the selling price plus GST, you will
need to define a Determine Taxable Basis tax rule to identify when a different taxable
basis is needed and which taxable basis tax formula to use.
determining factor set identifies the shipping destination, the product, and the intended
use of the product.
Determining Factor
Class
Name
Required
Product -
Non-Inventory Based
User Defined
Geography
Ship To CA GST Incl No
Transaction Input
Factor
Intended Use No
Tax Condition Set
indicates that the shipping destination is either of 2 provinces that apply PST on the sale
price plus GST.
Determining
Factor Class
Class
Qualifier
Determining
Factor name
Condition
User Defined
Geography
Ship To CA GST Incl Equal To CA QC and
PE
No

Determine Taxable Basis rule is the tax formula CA TB GST INCLUDED. This formula
is used to determine the taxable basis, which results in PST calculated on the sale price
plus GST Note that this tax rule uses the same tax determining factor set as in Ontario
Example 2 for tax rule efficiency.
Tax Rules Setup - Quebec Example 2
This tax rule setup identifies when tax recovery is applicable and which tax recovery
rate applies. The example refers to setting up a Determine Recovery Rate tax rule for
resale transactions in Quebec.
determining factor set identifies the shipping destination and the intended use of the
product.
Determining Factor
Class
Name
Required
Geography Ship From Country No
Geography Ship To Country No
Party Fiscal
Classification
Bill From Party CA Organization
Types
No
Party Fiscal
Classification
Ship To Party CA Organization
Types
No
Product -
Non-Inventory Based
Product -
Non-Inventory Based
Product -
Non-Inventory Based
User Defined
Geography
Ship To CA HST Provincial
Rebate
No

Determining Factor
Class
Name
Required
Transaction Input
Factor
Intended Use No
Tax Condition Set
indicates that the shipping destination is either of 2 provinces that apply PST on the sale
price plus GST and that the product is intended for resale.
Determining
Factor Class
Class
Qualifier
Determining
Factor name
Condition
Geography Ship To Province Equal To QC No
Transaction
Input Factor
Intended Use Equal To CA Resale No
Determine Recovery Rate rule is the tax recovery rate CA PST STD REC RATE.
United States Sales and Use Tax
United States Sales and Use Tax is a tax levied on the end consumer, with the business
serving as the collection agent for the tax authority. Any company receiving goods
within a state must either pay sales tax on receipt or self-accrue a use tax, usually to the
same value. The self-accrual scheme ensures that the state receives income independent
of the tax registration of the business.
The details of rates and regulations surrounding sales and use tax vary from state to
state, and are a matter of state and local law and court cases. Exemptions are normally
available in each state, including, but not limited to: resales, manufacturing, research
and development, non-profit or exempt organizations, and governmental organizations.
The nexus of taxation refers to the minimum level of commerce necessary to allow a tax
authority to impose a tax registration, tax filing, and/or tax collection responsibility. The
type of activity required to create nexus is defined by state or local statute, case law, and
the due process and Commerce Clause of the United States Constitution. Whether a
business has established nexus in a tax jurisdiction requires an assessment of all facts
and circumstances of its activity within that jurisdiction. You should seek the advice of
a qualified tax professional to determine if your business has established nexus (a
registration and filing requirement) before you implement sales tax.

The situs of taxation describes which tax authority levies the tax. This is typically the
ship-to state, county, or city, although there are many local taxes that base situs on the
ship-from location. Any tax collected for a given tax authority must be reported back to
that same authority.
Setup Features
This tax setup example is for a first party registered in California and dealing with city,
county, state transactions. Setup features include:
• There are three taxes under the US Sales and Use tax regime, for city, county and
state sales.
• US Sales and Use tax is not recoverable, so the setup does not include recovery
rates.
• There are multiple tax jurisdictions at the city and county level.
Tax Regime Setup
Main Information
Tax Regime Code US SALES AND USE Country Name United States
Name US Sales and Use Effective From 1-Jan-2000
Controls
Allow Tax Recovery No Allow Tax
Exemptions
Yes
Allow Override and
Lines
No Allow Tax Exceptions Yes
Defaults
Tax Currency USD Allow Multiple
Jurisdictions
Yes

Minimum
Accountable Unit
.01 Allow Tax Rounding
Override
Yes
Rounding Rule Nearest Exchange Rate Type Corporate
Tax Precision 2 Use Legal
Registration Number
No
Non-Inclusive
Handling
Allow Cross Regime
Compounding
No
Tax Accounts
Precedence Level
Jurisdictions
Configuration
Options (if defined
from tax regime)
Product Exceptions
Common
Configuration
Configuration for
Taxes and Rules
Common
Configuration
First Party Legal
Entity
Entity
Country Name United States
Main Information

Set for Self
Assessment/Reverse
Charge
No Rounding Rule Nearest
Rounding Level Header Set Invoice Values as
Tax Inclusive
No
Configuration
Options (if defined
from party tax
profile)
Tax Regime Code US SALES AND USE Configuration for
Product Exceptions
Common
Configuration
Configuration for
Taxes and Rules
Common
Configuration
First Party Legal
Establishment
Establishment
Country Name United States
Tax Registration
Tax Regime Code US SALES AND USE Tax Jurisdiction Code US CA STATE SALES
Tax US STATE SALES Effective From 1-Jan-2001
Tax Registration
Number
567890 Rounding Rule Nearest
Set as Default
Registration
Yes Set Invoice Values as
Tax Inclusive
No

Tax Registration
Status
REGISTERED Set for Self
Assessment/Reverse
Charge
Yes
Source Explicit
Tax Setup
There are three taxes under the US SALES AND USE tax regime for city, county, and
state sales. The example below is for state sales. All setup values are the same for the
three taxes.
Main Information
Tax Regime Code US SALES AND USE Tax Currency USD
Owner
Minimum
Accountable Unit
.01
Tax US STATE SALES Tax Precision 2
Tax Name US State Sales Exchange Rate Type Corporate
Tax Type Sales Reporting Tax
Authority
US STATE Tax
Authority
Effective From 1-Jan-2000 Collecting Tax
Authority
US STATE Tax
Authority
Geography Type State Applied Amount
Handling
Prorated
Parent Geography
Type

Parent Geography
Name
United States Set Tax for Reporting
Purposes Only
No
Controls
Non-Inclusive
Handling
Use Legal
Registration Number
No
Allow Override and
Lines
No Allow Duplicate Tax
Yes
Allow Tax Rounding
Override
Yes Allow Multiple
Jurisdictions
Yes
Allow Override for
Yes Allow Mass Creation
of Jurisdictions
Yes
Allow Entry of
Manual Tax Lines
Yes
Tax Account
Controls
Tax Accounts
Creation Method
Create Tax Accounts
Tax Recovery
Controls
Allow Tax Recovery No Allow Secondary
Recovery Rate
Determination Rules
No
Allow Tax Recovery
Rate Override
No Allow Tax Rate Rules Yes
Allow Primary
Recovery Rate
Determination Rules
No

Tax Status Setup
Main Information
Tax Regime Code US SALES AND USE Tax US STATE SALES
Owner
Tax Name US State Sales
Standard Status
Tax Status Code US STATE SALES
STANDARD
Name US State Sales
Standard
Set as Default Tax
Status
Yes
Reduced Status
REDUCED
Name US State Sales
Reduced
Set as Default Tax
Status
No
Zero Status
ZERO
Name US State Sales Zero Set as Default Tax
Status
No
Default Controls (all
statuses)
Allow Tax
Exemptions
Yes Allow Tax Rate
Override
Yes
Allow Tax Exceptions Yes

This setup is for the California state tax jurisdiction.
Field Value
Tax Jurisdiction Code US CA STATE SALES
Tax Jurisdiction Name US California State Sales
Tax Regime Code US SALES AND USE
Tax US STATE SALES
Geography Type State
Parent Geography Name United States
Geography Name California
Precedence Level 1
Set as Default Tax Jurisdiction Yes
Default Effective From 1-Jan-2000
Tax Rate Setup
This example shows the standard state tax rate. The setup for reduced and zero is the
same, except for the special reduced percentage rate and a zero percentage rate.
Main Information

Tax Regime Code US SALES AND USE Tax Status Name US State Sales
Standard
Tax Regime Name US Sales and Use Tax Rate Code US STATE SALES
STD RATE
Tax US STATE SALES Configuration Owner Global Configuration
Owner
Tax Name US State Sales Rate Type Percentage
STANDARD
Rate Period
Percentage Rate 6.25 Default Effective
From
1-Jan-2000
Effective From 1-Jan-2000 Set as Default Rate Yes
Allow Tax
Exemptions
Yes Allow Ad Hoc Rate Yes
Allow Tax Exceptions Yes Adjustment for Ad
Hoc Amounts
Tax Rate

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