E-Business Tax Architecture E-Business Tax Architecture
The Rule Engine tier comprises the set of tax rules that are used to determine and calculate tax on a transaction. You define tax rules for each combination of tax regime, tax and
configuration owner. You create tax rules by translating the tax regulations of a tax authority into determining factors and tax conditions that the E-Business Tax tax rules engine uses to evaluate the applicability of a tax on each transaction line. Tax rules determine: the applicability of a tax; the place of supply and tax jurisdiction of the transaction; the tax
registration; the tax status and tax rate; the recovery rate (if applicable); and the taxable basis and tax formula to use in calculation.
This module discusses the major components of a tax rule—regime determination set, tax determining factor set, tax formula, tax condition set—and how to use these components to build tax rules.
Copyright ? Oracle, 2009. All rights reserved.
Part 2: Setting Up Tax Rules
Chapter 8 - Page 6
E-Business Tax Homepage – Tax Rules
Copyright ? Oracle, 2009. All rights reserved.
Part 2: Setting Up Tax Rules
Chapter 8 - Page 7
Determining Factors Determining Factors
Determining factors are the key building blocks of your tax rules. They are the variables that are passed at transaction time or derived from information on the transaction. Determining factors fall into four groups, namely: ? Party ? Product ? Place ? Process
A determining factor is an attribute that contributes to the outcome of a tax determination process, such as a geographical location (place) or tax registration status (party). Determining factors can be used in tax rules, taxable basis formula, and tax regime determination. Determining Factor Classes
Tax determining factors are categorized into logical groupings called determining factor classes, such as Accounting or Geography. The grouping of determining factors into
determining factor classes is done to simplify searches, by grouping similar determining factors together. A determining factor is automatically created under the appropriate determining factor class whenever you create a new element, such as a new fiscal product classification code.
Copyright ? Oracle, 2009. All rights reserved.
Part 2: Setting Up Tax Rules
Chapter 8 - Page 8
Class Qualifiers
You use a class qualifier with a determining factor class when it is possible to associate a determining factor class with more than one value on the transaction. For example, for the determining factor class Geography and the determining factor Country, you need to specify which party location to use by means of a class qualifier such as ship from party or ship to party location.
Copyright ? Oracle, 2009. All rights reserved.
Part 2: Setting Up Tax Rules
Chapter 8 - Page 9
Determining Factor – Party
Determining Factor - Party
The Party determining factor includes the following determining factor classes and their class qualifiers:
? Legal party fiscal classification
- First party ? Registration
- Bill From Party - Bill To Party - Ship From Party - Ship To Party
? Party fiscal classification
- Bill From Party - Bill To Party
- Point of Acceptance Party (AR transactions) - Point of Origin Party (AR transactions) - Ship From Party - Ship To Party
Copyright ? Oracle, 2009. All rights reserved.
Part 2: Setting Up Tax Rules
Chapter 8 - Page 10