The document describes an Oracle EBTax implementation for an international company to manage EU tax regimes. Key aspects include: - Configuring tax rates, jurisdictions, and regulations for multiple EU countries - Extending EBTax to automate tax computation, generate regulatory reports, and capture VAT IDs - Changes to business processes for validating VAT IDs, determining tax codes, and reconciling output/input VAT - Generating reports on taxes and exceptions while also noting current limitations of the EBTax solution.

1. Oracle EBTax Implementation
( A Case Study for EU Regimes)
- Donald Fernandes
2012

2. About Company ABC
• Public Internet-services based Company
• US headquarters with Int’l Operations
• Oracle R12.1.3 Financials and HRMS
• 50 End-Users + 5 Power-Users (Oracle)

3. Agenda
• Business Requirements
• Implementation
• Business Process Changes
• Reporting
• Challenges and Limitations
• Next Steps and Q&A

4. 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

5. Implementation Summary

6. Implementation: EBTax Basics
Debut Platform R12
Current Patchset Level 12.1.3
Application Short Name ZX
Subscribing Oracle Modules AR, AP, PO, GL, TCA, INV
Seeded Oracle Responsibilities Tax Managers
Tax User

7. 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

8. EBTax Data Model

9. Extensions
(to Standard EBTax)

10. 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

11. Automated Tax Computation
Tax Determination Factor Set
Tax Condition Set

12. Regulatory VIES Reporting
• Data Sourced from Receivables
• Quarterly and Annual Versions
• Custom Concurrent Program w/ XML Output
• Electronic Filing

13. Autoinvoice Plug-in
Impacted Interface
Columns
LINE_TYPE=TAX
TAX_RATE_CODE
TAX
TAX_RATE

14. EU Invoice Printing

15. Business Process Change
Highlights

16. 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

17. Business Process Changes
• Validation of Customer VAT ID

18. Business Process Changes
• AP Invoice Validation, Accounting, Application

19. Business Process Changes
• Tax-Only Receivable Adjustment

20. Report Listings
• Financial Tax Register
• VIES Reports
• Exception Reports

21. 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 end-
dated

22. 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