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Fully Automating eBTax When Upgrading From 11i to R12

Prepared by:

Andrew Bohnet

Director eBTax

eBiz Answers Limited

www.ebizanswers.net

The Oracle R12 eBTax Module is extremely powerful yet rarely used to its full potential – Why?

Introduction

Andrew Bohnet

■ Director - eBiz Answer LTD

■ OAUG EU-Chair for ‘Oracle Tax Management SIG’

■ 16 Years Oracle Financials, 8 on R12, primarily on global projects

■ Currently assists clients in configuring eBTax to meet requirements

■ Performing eBTax system Audits to eliminate VAT non-compliance

■ Developed the eBTax Rapid Install product to roll out 30 countries in 4 hours (only company globally that can do this)

Presentation Agenda

■ Look at upgraded 11i Tax rates

■ Compare to new R12 rate

■ Look at upgraded 11i Tax rules

■ Compare to new R12 rules

■ Issues you may face

Why are rules not used?

So many clients I visit still have manual tax solution based on an 11i approach.

Why is this?

Why are rules not used?

■ Integrator on a fixed price and only wants to give you what you had in 11i

■ Experience and knowledge of person doing set up is limited. Tax is a huge module and complex!

■ Its one thing to be able to create a rate and a condition, it is something completely different to create a tax solution!

■ eBTax module capabilities not explained to the client so they only ask for what they had in 11i

■ Client has too many 3rd party solutions using the tax and don’t want to redesign all the interfaces

■ We don’t think the tax engine will do what we want it to do

■ Tax setup is very time consuming, we cannot fit the setup over a cutover period

Upgraded Regime To Rate

Typical look at upgraded 11i solution

Upgraded Regime To Rate

Upgraded Regime To Rate

Regime to Rate Flow showing the Regime and Tax

Upgraded Regime To Rate

Level Type indicates whether it is a Regime, Tax, Status or a Rate

Upgraded Regime To Rate

The upgrade has created multiple ‘Taxes’In this example, 55 taxes have been createdNot one of them is an offset tax!

Upgraded Regime To Rate

And expand the tax status and tax rate out

Upgraded Regime To Rate

Upgraded Regime To Rate

And in many cases, there is a one to one relationship between Tax, Status and Rate

R12 Regime to Rate

Using R12 solution instead of upgraded 11i

R12 Regime to Rate

R12 Regime to Rate

1. Only 2 Taxes needed!2. Neat Naming convention (Tax selection, Identification, reporting and

database)3. Configuration Owner is now ‘Global Configuration Owner’ so it can be

used repeatedly

R12 Regime to Rate

R12 Regime to Rate

Other Tax Status could include;

Status Rate

GB VAT STANDARD GB VAT STANDARD 20%

GB VAT EXEMPT GB VAT EXEMPT

GB VAT ZERO GB VAT ZERO

GB VAT REDUCED LOW GB VAT REDUCED 5%

GB VAT EU SALES GOODS GB VAT EU SALES GOODS

GB VAT EU SALES SERVICES GB VAT EU SALES SERVICES

GB VAT EU SALES TRIANGULATION GB VAT EU SALES TRIANGULATION

GB VAT EXPORT GB VAT EXPORT

GB VAT TAX UNKNOWN GB VAT TAX UNKNOWN

GB VAT CUSTOMS TAX GB VAT CUSTOMS TAX 20%

Additional Rate Setup

Country specific localisations

Tax reporting codes

Legal Justification Text

Default values

Upgraded Rules

Upgraded Rules

Upgraded Rules

Upgraded Rules

Upgraded Rules

R12 New Rules

Using the new rules

R12 New Rules

R12 New Rules

R12 New Rules

So what if we have one Legal Entity or Operating unit that has special requirements?

R12 New Rules

R12 New Rules

Benefits of going to Rules

■ Use of new eBTax functionality not available in 11i■ Creation of a global solution■ Tax determined by rules rather than end user

■ Rules linked to multiple determining factors (Location, Items, Customers, Transaction Types)

■ Rules stop user making mistakes■ Party specific rules can be held at the party level

without effect the global solution■ Only one regime to maintain■ No more defaulting tax codes■ Better naming convention■ Risk dramatically reduced with automated solution■ Easy for user to maintain solution■ Error checking in interfaces

eBTax Rapid Install

Setting up 30 tax regimes in 4 hours!

eBTax Rapid Install

■ Can setup 30 days of configuration in 4 hours!■ Allows for new fully automated tax solution over

cutover period■ No customisations, all standard Oracle

functionality

eBTax Rapid Install

Interfaces

■ Allowing Oracle to be the one source for tax means minimal maintenance but with maximum functionality

■ In AP, use the tax control amount and passing tax information rather than an actual rate will allow for error checking

■ Old tax rates can be incorporated into new solution meaning old systems can remain the same

Issues with keeping 11i solution

■ Tax rounding issues

■ Reporting – missing setups

■ Will need some setups to make working

■ Duplicate tax rates (from AP and AR) can cause issues as no validation in upgrade

■ Unlikely to meet client requirements

■ No Offset Reverse Charge rates

■ Extremely difficult to maintain

■ Difficult to expand solution

■ Lack of confidence by users in the system

■ Global Configuration owner means TCC seen by all

Issues with new automated solution

■ Need someone who knows what they are doing for setup

■ Updated Purchase Orders keep old tax

■ End dating or disabling old tax rates can cause interface issues

■ Patches required for full solution

■ Relearning curve for end users

■ Setup is time consuming

■ Not enough determining factors

■ Tax accounts linked to Ledger and OU, so issues if multi LE to one OU

■ No functionality for handling bonded product

■ Intercompany solution – shipping entity does not have a ship to address

Thank you.

Any Questions?

Thank you for your participation

@ebizanswers

www.ebizanswers.net blog.ebizanswers.net

+44 208 123 2833

Oracle Fusion & R12 ebusiness tax