Oracle EBTax Implementation

( A Case Study for EU Regimes)

- Donald Fernandes
2012

About Company ABC

Public Internet-services based Company

US headquarters with Intl 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
Current Patchset Level
Application Short Name
Subscribing Oracle Modules
Seeded Oracle Responsibilities

R12
12.1.3
ZX
AR, AP, PO, GL, TCA, INV
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 enddated

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