Chapter 4: Oracle Fusion Tax Implementation

Hi friends, We are in the Oracle Fusion Tax Implementation series. This is the Lesson number 4 of this series. Lets start and learn how to Implement the Taxation in Oracle Fusion.

Analyzing Your Tax Requirements

The following table represents key decisions that you must make when you analyze your tax requirements and use Oracle Fusion Tax and other Oracle Fusion applications to implement a solution

 

Question	Consideration	Impact to Tax Configuration
Who am I?	You must first answer questions about yourself and your relationship to the legal and regulatory agencies that enable you to operate in one or more counties.
Where do I have operations and 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.	Use Oracle Fusion Legal Entity Configurator to capture information about your legal entities and legal registration.
What taxes am I subject to?	Analyze your tax environment for each of the countries in which you operate.	Set up your tax regimes, taxes, and tax jurisdictions according to the tax requirements for each country.
What are the operations and businesses that I have?	Consider the types of operations and businesses in which you are engaged and the countries where you have legal entities or reporting units. The type of industries that you work under (for example, mining, telecommunications, and pharmaceuticals), the kind of operations in which you engage (for example, trading, manufacturing, and services), and the scale of your operations (for example, your turnover, company size, and growth) may all impact your taxability.	Use the classifications feature to categorize or classify your first parties under various classification schemes. In analyzing your operations, you can associate the three main classifications of a transaction to: What you do: Use transaction fiscal classifications. What products you buy or sell: Use product fiscal classifications. Who your customers and suppliers are: Use party fiscal classifications.
What do I do?	Identify and classify the transactions that 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?	Use Oracle Fusion Tax to create fiscal classifications to classify and categorize your transactions in a common manner across your organization. Use these fiscal classifications in tax rules to obtain the appropriate tax result.
What products do I buy or sell?	Determine the products that you buy and sell as they impact the taxes to which you are subject. 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.	Where Oracle Fusion Inventory is installed use the Inventory Catalog feature with Oracle Fusion Tax product fiscal classifications and intended use functionality to classify the taxable nature and intended use of the items. You can then define tax rules using these classifications to obtain the appropriate tax result. Define product category and noninventory-based intended use fiscal classifications to address classification needs for transactions that do not use inventory items.
Who are my customers and suppliers?	Determine the types of customers and suppliers with whom you do business, as they can impact the taxes to which you are subject or the tax status or tax rate that applies. For example, let's say that you are a company in the UK that supplies physical goods to another country that is also a member of the European Union. The transaction rate for UK VAT is dependent on whether the customer is registered for VAT in the country to which the supply is made.	Use the party classifications feature to categorize or classify your customers and suppliers. You can use these classifications in your tax rules to derive the appropriate tax result. You create a party fiscal classification by assigning an Oracle Fusion Trading Community Model class category to a party fiscal classification type code that you define. The Trading Community Model class codes defined under the class category become fiscal classification codes belonging to the party fiscal classification type. You can create a hierarchy of party fiscal classification types to reflect the levels of codes and subcodes within the Trading Community Model classification.

Implementation of Transaction Tax (GST) in Oracle Fusion

Chapter 4: Oracle Fusion Tax Implementation

India GST Transaction Tax Rates

Here below are the Rates of India GST Transaction Tax, which we do apply in Buy and Sell transaction. In this Implementation we will configure these below tax rates in Oracle Fusion.

1.       5%

2.       12%

3.       18%

4.       28%

 

Role of Tax Classification codes in Oracle Fusion:

To Apply any type of Transaction Tax in oracle Fusion, we must apply in the form of Tax Classification code. We cannot apply the tax rates directly in AP Invoice or AR Invoice Transactions. We must create the Tax Classification code and under the Tax Classification code, we do attach the tax rates which will be applied for Tax classifications. For in the Transactions, we just apply the tax Classification code for the Tax and automatically tax rates do attach automatically.

Defining Tax Classification codes for GST Transaction Tax in Oracle Fusion

For All Local Purchases/Intra States in one State, we will be creating these below Tax Classification codes. We can give any name as per our business Requirment and for easy identification. These are tax classification codes will be show in the Transaction Tax Window for apply.