Oracle EBTax Implementation( A Case Study for EU Regimes)

- Donald Fernandes

2012

About Company ABC

• Public Internet-services based Company

• US headquarters with Int’l Operations

• Oracle R12.1.3 Financials and HRMS

• 50 End-Users + 5 Power-Users (Oracle)

Agenda

• Business Requirements

• Implementation

• Business Process Changes

• Reporting

• Challenges and Limitations

• Next Steps and Q&A

EBTax: Business Requirements

• Maintain Tax Rates for specific EU Jurisdiction

• Record VAT ID for eligible Customers

• Record VAT Rate on AR Invoices

• Record VAT Rate on AP Invoices

• Print VAT details on AR Invoices

• Automate Accounting for Input and Output VAT

• Generate regulatory reports (example VIES)

• Perform AR Invoice Adjustments for Tax

Implementation Summary

Implementation: EBTax Basics

Debut Platform R12

Current Patchset Level 12.1.3

Application Short Name ZX

Subscribing Oracle Modules AR, AP, PO, GL, TCA, INV

Seeded Oracle Responsibilities Tax Managers

Tax User

Configuration Specifications

• Global Ownership of EU Tax Regimes

• Multiple EU Tax Authorities

• One Tax Regime, Jurisdiction per EU Country

• Multiple Legal Entities per Jurisdiction

• Manual Maintenance of Tax Codes and Rates

• Legal Justification Message Text

• Allowance for Manual Tax Rate Overrides

• Integration with AP and AR Transactions

• Provision for Tax Recoverability

EBTax Data Model

Extensions (to Standard EBTax)

Extensions Summary

• Automated Computation of Tax

• Generation of Regulatory VIES Report

• Third-Party determination of Tax Code for

standard AutoInvoice program

• Capture Customer VAT Id within standard

Customer Interface program

• Printing of appropriate LJM on Customer

Invoices

Automated Tax Computation

Tax Determination Factor Set

Tax Condition Set

Regulatory VIES Reporting

• Data Sourced from Receivables

• Quarterly and Annual Versions

• Custom Concurrent Program w/ XML Output

• Electronic Filing

Autoinvoice Plug-in

Impacted Interface

Columns

LINE_TYPE=TAX

TAX_RATE_CODE

TAX

TAX_RATE

EU Invoice Printing

Business Process Change

Highlights

Business Process Changes

• Offline Validation of Customer VAT ID

• Determination of VAT Codes for Receivables

• Regulatory Reporting of Output VAT for VIES

• Internal Reconciliation of Output and Input VAT,

using standard Financial Tax Register EBTax report

• Manual Maintenance of VAT Tax Rates by

Jurisdiction

• Tax-Only Adjustment in Receivables

Business Process Changes

• Validation of Customer VAT ID

Business Process Changes

• AP Invoice Validation, Accounting, Application

Business Process Changes

• Tax-Only Receivable Adjustment

Report Listings

• Financial Tax Register

• VIES Reports

• Exception Reports

EBTax: Challenges and Limitations

Does not replace 1099 Tax Processing and Reporting

Does not provide Withholding Tax functionality

Does not provide interface to upload Tax content data

Does not compute Payroll Tax

No public APIs to incorporate custom Tax Rules

Out-of-box cannot meet all statutory Reporting Needs

Technical Data Model does not adhere to EBS standards

Overall design is too “location-centric”

Most configurations are irreversible; only may be end-

dated

Next Steps

• Automated Validation of Customer VAT

• Automated update/load of VAT Rates

• Custom Reports for detecting Taxation

exceptions

• Record Customer Tax Exemptions

• Automated Self-Assessment for Taxes on

Payables Invoices