UKOUG Applications Conference 2013 - Innovate Tax

UKOUG Applications Conference 2013

15th October 2013 - The Brewery, London

Fully Automating eBTax when upgrading from 11i to R12 with New E-Business Tax Rules

Introduc)on

Andrew Bohnet •  Director -‐ eBiz Answer LTD •  OAUG EU-‐Chair for ‘Oracle Tax Management SIG’ •  16 Years Oracle Financials, 7 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

Presenta)on Agenda

•  Look upgraded 11i Tax rates •  Compare to new R12 rate •  Look upgraded 11i Tax rules •  Compare to new R12 rules •  Issues you may face

Why are rules not used?

So many clients I visit sZll have manual tax soluZon 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 condiZon, it is something

completely different to create a tax soluZon! •  eBTax module capabiliZes not explained to the client so they only ask for what

they had in 11i •  Client has too many 3rd party soluZons using the tax and don’t want to redesign all

the interfaces •  Tax setup is very Zme consuming, we cannot fit the setup over a cutover period •  We don’t think the tax engine will do what we want it to do

Upgraded Regime to Rate


Regime to Rate Flow showing the Regime and Tax

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

The upgrade has created mulZple ‘Taxes’ In this example, 55 taxes have been created Not one of them is an offset tax!

Lastly, we can see the ConfiguraZon Owner This tells us who the tax belongs to and in this case it belongs to the OperaZng unit of eBiz GmbH


•  We see poor naming convention throughout

•  No distinction between country or type of VAT rate (Reduced, Standard, Reverse Charge)

•  Mixed country rates under one regime

•  Can have duplicate rate names (AR and AP)


And in many cases, there is a one to one between


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’

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%

R12 Regime to Rate

•  Country specific localisaZons

•  Tax reporZng codes

•  Legal JusZficaZon Text

•  Default values

Addi)onal Rate Setup

Upgraded 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

•  Use of new eBTax funcZonality not available in 11i •  CreaZon of a global soluZon, setup repeated to all tax regimes •  Tax determined by rules rather than end user •  Rules linked to mulZple determining factors (LocaZon, Items, Customers,

TransacZon Type, Accounts, •  Rules stop user making mistakes •  Party specific rules can be held at the party level without effect the global

soluZon •  Only one regime to maintain •  No more defaulZng tax codes •  Beder naming convenZon •  Risk drama)cally reduced with automated solu)on •  Lowered risk of non-‐compliance •  Easy for user to maintain soluZon (rate change setup in 5 minutes) •  Error checking in interfaces

Benefits of going to Rules

•  Can setup 30 days of configuraZon in 4 hours! •  Allows for new fully automated tax soluZon over cutover period

•  No customisaZons, all standard Oracle funcZonality

eBTax Rapid Install

•  Allowing Oracle to be the one source for tax means minimal maintenance but with maximum funcZonality

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

•  Old tax rates can be incorporated into new soluZon meaning old systems can remain the same

Interfaces

•  Tax rounding issues •  ReporZng – missing setups •  Will need some setups to make working •  Duplicate tax rates (from AP and AR) can cause issues as no

validaZon in upgrade •  Unlikely to meet client requirements •  No Offset Reverse Charge rates •  Extremely difficult to maintain •  Difficult to expand soluZon •  Lack of confidence by users in the system •  Global ConfiguraZon owner means TCC seen by all

Issues with keeping 11i solu)on

•  Need someone who knows what they are doing for setup •  Updated Purchase Orders keep old tax •  End daZng or disabling old tax rates can cause interface issues •  Patches required for full soluZon •  Relearning curve for end users •  Setup is Zme consuming •  Not enough determining factors •  Tax accounts linked to Ledger and OU, so issues if mulZ LE to one

OU •  No functionality for handling bonded product •  Intercompany solution – shipping entity does not have a ship

to address

Issues with new automated solu)on

For more informaZon visit:

www.ebizanswers.net

About UKOUG UKOUG exists to serve the Oracle community in the UK and Ireland. We act as a focal point for sharing knowledge about Oracle applications, technologies, tools and developments and, as an independent, not for profit membership organisation, represent the views of users and partners to Oracle.

© Copyright 2011 UKOUG

Contact User Group House 591-593 Kingston Road Wimbledon London SW20 8SA

T: +44 (0)20 8545 9670 W: www.ukoug.org

UKOUG Applications Conference 2013 - Innovate Tax

Documents

Transcript of UKOUG Applications Conference 2013 - Innovate Tax