Tax Account Derivation for Accounts Payable

For non recoverable taxes, the calculated tax amount is accounted as follows:

Using the tax expense account defined at the TAX RATE.

If it is not defined, then using the item account defined at the AP invoice line
level.

For recoverable taxes, the calculated tax amount is accounted as follows:

Using the tax recoverability account defined at the RECOVERY RATE.

If it is not defined then using the tax recoverability account defined at the TAX
RATE.

If neither is defined, then the transaction is not validated.

Note: If recovery is DEFERRED, then the tax is accounted in an interim tax account
defined at the TAX RATE until a payment is made. Afterwards the tax amount gets
transferred to the tax recoverability account.

Self Assessed Tax

For non recoverable taxes, the calculated tax amount is accounted as follows:

Using the tax expense account defined at the TAX RATE.

If it is not defined, then using the item account at the AP invoice line level.

For recoverable taxes, the calculated tax amount is accounted as follows:

Using the tax recoverability account defined at the RECOVERY RATE.

If it is not defined, then using the tax recoverability account defined at the TAX
RATE.

If neither is defined, then the transaction is not validated.

Note: For the liability the credit tax engine considers the tax liability account,
which is defined at the TAX RATE.

Tax Account Derivation for Accounts Receivable

For non partner tax calculation the accounting is done using default accounts set
for the TAX type in Auto Accounting:

If for a specific segment the account code is specified under Constant, then that
segment tax is accounted in that particular account code.

If for a specific segment taxes is specified under Table Name, then that segment
tax is accounted using the tax liability account in TAX RATE.

For partner tax calculation the accounting is done using default accounts set for
the TAX type in Auto Accounting:

If for a specific segment the account code is specified under Constant, then that
segment tax is accounted in that particular account code.
If for a specific segment taxes is specified under Table Name, then for that
segment the tax is accounted as follows:

Using the tax liability account at the tax jurisdiction.

If it is not found, then using the TAX RATE.

Note: This occurs when the Create Tax Accounts drop down is selected at the tax
level.

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For Standard Invoices and Prepayment Invoices, the default value of 'Enforce Tax
From Reference Document' is Yes.
This means the value gets copied and enforced from the PO. So even if the tax rate
is updated as per the customer's steps,
the Cancel flag gets stamped on the new tax line.

Even though the specific customer did not have a Configuration Owner Tax Option
(COTO) for Payables, Standard Invoices,
the above explanation still holds true.
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2. Which are the responsibilities in EBTax?

The responsibilities are:

. Tax Administrator: To execute technical setup and support services.
. Tax Manager: To setup and maintain E-Business Tax configuration data. This
responsibility has the
highest level of access to E-Business Tax
functionality.
Assign profile GL: Data Access Set to this
responsibility to give access to GL Tax
Options
. Oracle Tax Simulator: to test and simulate tax configuration and setup.

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13. How to disable tax usage in requisitions?

To disable tax for requisitions execute the steps:

. Go to Defaults and Controls > Configuration Owner Tax Options using Tax
Managers responsibility.
. Search Application = Purchasing and Event Class = Requisition.
. Uncheck "Allow Tax Applicability"
. Create new event class if it does not exist.
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