Canada Case Study

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CaseStudy:SetupR12EBusinessTax(EBTax)forCanada:Includes2010HSTChanges
(DocID577996.1)
InthisDocument
Purpose
Scope
Details
1.Introduction
2.IfYouAreUsinganUpgradedEnvironment....
a.HSTSetup:
bTaxGroups:
3.PreRequisiteSetup
a.SetupGeographyHierarchyStructure&Details
b.DefineTax&GeographyValidation
c.SetupaLegalEntity,Establishment,LedgerandOperatingUnit
d.AssociatetheOperatingUnitwiththeLegalEstablishment
e.ReplicateSeedData
f.SetupResponsibilitiesfortheNewOperatingUnit
g.SetupMandatoryResponsibilityLevelProfileOptions
h.SetupItemValidationOrganizationForTheOperatingUnit
i.SetupaFreightInventoryItem
j.SetupTaxandTCAProfileOptions
k.SetupReceivablesSystemOptions
l.SetupReceivablesAutoAccounting
m.SetupReceivablesTransactionTypes
n.SetupTransactionSources
o.InitializeOperatingUnitPartyTaxProfile
p.SetupReceivablesActivityTypes
q.SetupBanks,BranchesandAccounts
r.SetupReceivablesReceiptClass&PaymentMethod
s.SetupApprovalLimits
t.RunGeographyNameReferencingProgram
(Backtotop)
4TaxSetup
a.DefineRegimes
b.DefineTaxes
c.DefineTaxStatuses
d.DefineTaxJurisdictions
e.DefineTaxRecoveryRates
f.DefineTaxRates
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g.DefinethePartyTaxProfileforLegalEntity&OperatingUnit
h.SetupDefaultTaxRules
i.MakeTaxAvailableForTransactions
j.PerformaBaselineTestinAR
k.PerformaBaselineTestinAP
5.TaxSetup:TaxSetupForCommonScenarios
a.AdjustingtheTaxableBasisforQuebecandPrinceEdwardIsland
b.ZeroRatedItemsforExport
c.ApplyingTaxtoFreight
d.SelfAssessedTaxes
e.ReportingByTaxAuthority
f.ChargingDifferentTaxAccountsForEachTax
g.SettingupTaxrecoveryforITCandRebates
6TestingYourTaxConfiguration
a.Receivables
b.Payables
CommunityDiscussion
References
APPLIESTO:
OracleReceivablesVersion12.0.0andlater
OraclePurchasingVersion12.0andlater
OraclePayablesVersion12.0.0andlater
OracleEBusinessTaxVersion12.0andlater
OracleOrderManagementVersion12andlater
Informationinthisdocumentappliestoanyplatform.
PURPOSE
InRelease12,OracleintroducedEBusinessTaxasthenewtaxcalculationenginefortheOrdertoCashandProcure
toPaybusinessflows.Eachofthesemodulesproprietarytaxenginesfromearlierreleaseswerediscontinuedinfavor
ofthisnewsolution.(LatinTaxEngine,GoldenTaxAdaptorandtheIndiaGlobalizationstillexist)
ThisWhitePaperdocumentshowasimplifiedimplementationmightbeperformedforacustomerusingEbusinessTax
forCanadainRelease12.Thisisalivingdocumentandweencouragereaderstopostinput,askquestionsorshare
bestpracticesonourcommunitythreadforCanadaTaxSetup.
ThisNoteincludeschangesreflectiveofHSTadoptionbyBritishColumbia(BC)andOntario(ON)scheduledtotake
effectJuly1,2010.AlsoaddedtothisnotearetheNovaScotiaHSTrateincreases(addedJune21,2010)
Thiswhitepapercombines,extendsandsuperseedsthefollowing:
1)OracleEBusinessTaxConfigurationLibrary(CLIC)Note463001.1
2)OracleEBusinessTaxImplementationGuideChapter4:CanadianSalesTax
3)WhitePapertitled:IntegratingOracleEBusinessTaxWithOracleReceivablesandOraclePayablesForCountry
CanadaRelease12(thisdocumentisnolongeravailableforviewingonMyOracleSupport)
SCOPE
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ThisnotewaswritteninacasestudyformatusingCanadaastheexample.Itassumesthatyouhaveanexisting
implementationandthatyouareaddinganewcountry,Canada,toyourconfiguration.
Section3beginsthecasestudywithsomemandatorysetupsteps.YoushouldrefertotheFinancialsImplementation
Guidealongwithyourmodulespecificimplementationdocumentationasappropriateforyourimplementation.The
stepsdocumentedinthissectiondocovermandatorysetupsformodulesimpactedbyEBusinessTax.Eachsection
alsoattemptstodocumentthetaximplicationsofoptionsyoumightselectwhenperformingthestep.
Section4beginsthetaxspecificsetups.Inthissectionwewalkyouthroughthebasicsetupofyourtaxsystem.
ThissectionfocusesonwhatEBusinesstaxcallsthe"RegimetoRate"flowwhereyouidentifythetaxesthatshouldbe
assessed.Alsocoveredarethedefaultsettingsusedbytheruleenginetodetermineifataxshouldbechargedandif
yes,howtocalculateandrecordthetax.
Section5coverssomeofthemorecommonbusinessrequirementsapplicabletothiscasestudy.Inthissectionwe
explaininnonspecifictermsthegeneralrequirementthatneedstobesatisfiedandprovidereferenceswhenever
possibletotheoriginoftherequirement.Wethenprovidealinktoanotethatprovidesindepthexamples,
screenshotsandvideoofhowtoconfigureasystemtosatisfytherequirement.Pleasenotethatthesereference
documentsarenotallspecifictothiscasestudybutratherareintendedtoconveyexamplesofhowtherequirement
mightbesatisfied.
AdditionalsectionsandcontentwillbeaddedtofocusonTestingthesolutionandreporting.TheintentofthisCase
StudyistohelpaneworexistinguserofEBusinessTaxtounderstandconceptsandsetupthatmayotherwisebe
dispersedacrossnumerousimplementationandusermanuals.Italsoattemptstoshowhowyoucancomplywith
somegeneralbusinessrequirements,therebyallowingyoutofocusonthelesscommonrequirementsuniquetoyour
specificorganization.Wehopethatthisenablesyoutostreamlineyourprojecttoreducethetime/costoftheeffort
andraisethevaluerealizedbyyourbusinessfromEBusinessTax.
DETAILS
1.Introduction
ForCanada,youcanmodelyourtaxsetupsbasedonthesesetupexamples.Theseexamplesareintendedto
demonstraterecommendedsetups,settings,andinterdependenciesforeachtaxregime.
Disclaimer:Thisnoteisnotintendedtoprovideexamplesofallbestpracticesnorcoverallcases.Theactualdetails
ofyourowntaxconfigurationsetupwilldependonyourcompany'sspecificinternalandlegaltaxrequirementsanditis
oftenthecasethatthesamebusinessrequirementcanbesatisfiedinmanyways.Pleaseconsultyourtaxdepartment
orobtainprofessionaltaxassistancetodeterminethespecificrequirementsforyourorganization.
Assumptions:ThiscasestudywillguideyouthroughthecreationofbasictaxsetupforCanada.Itassumethatyou
alreadyhavecompletedthesetup/installationoftheapplicationsandthatyouwishtoaddanewCanadaLegal
Entity/OperatingUnitunderwhichyouwilltransactandpay/levy/collecttaxes.
Note:ForthisCaseStudy,wehavechosen1Jan2001astheEffectiveFromdatebutyoumayneedtochoose
someotherdatedependingonyourrequirement.
2.IfYouAreUsinganUpgradedEnvironment....
a.HSTSetup:
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Ifyouareusingan11iupgradedenvironmentandtheupgradewascompletedBEFOREyousetupyour
systemfortheBCandOntarioHSTadoption,youwillneedtotakeadditionalsteps.RefertoNote
1062897.1titled:CaseStudy:HowtoSwitchfromanUpgradedTaxRegimetoaNewTaxRegime
CanadaHSTexample
bTaxGroups:
TaxGroupsarenolongerusedinRelease12SeeNote738000.1CanICreateaTaxGroupinR12E
BusinessTax?
FormoreontheupgradeprocessrefertoNote810443.1TroubleshootingandOverviewoftheE
BusinesstaxR12upgradeforOrdertoCash
3.PreRequisiteSetup
Notethatsomeprerequisitesarenotrequiredtobeperformedwhenusinganupgradedinstance.
a.SetupGeographyHierarchyStructure&Details
GeographyHierarchy:Ahierarchicalrelationshipsbetweenacountryandthespecificgeography
elementsthatexistwithinacountry(ex:State,Province,Territory,City,County,Parish,PostalCode,
etc)
Toseehowtosetupageographyhierarchy,refertoNote554492.1
Responsibility:TradingCommunityManager
Navigation:TradingCommunity>Administration>GeographyHierarchy
ForCanada,youmustminimallydefineageographytypeof"Province"underthecountry"Canada".
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Youmayadditionallywishtodefinelowerlevelsinyourhierarchytoenforcethatusersselectvalidcity
namesandpostalcodecombinationshoweverthisisnotrequiredforCanadiantaxcalculatesastaxes
arebasedsolelyontheCountryandProvince.Somecustomersdochoosetotakethisadditionalstepto
ensurethatthemailingaddressesarevalid.RefertotheTradingCommunityArchitectureAdministration
Guide,Page1112formoredetailsonthecompleteimplementationofthisfeature.
OncetheGeographyTypeof"Province"isdefined,addeachprovinceunderthe"ViewDetails"link
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ImportantNote:DuetoanissuewithTCA,whenaGeographyvalueiscreated(SayABfor
Alberta)thesystemwillsetthedefaultdatetothesystemdate.Youcannotupdatethisviathe
application.TCAproductmanagementistrackingafixforthisinBug7150723Ifyouhaveaneedto
importhistoricaldataadatafixwillberequireduntilthisUIdefectisresolved.
@DataFix:toberunafterthecustomercreatesalltheprovincesinTCAandbeforetheycreate
jurisdictions
@updatehz_geographies
@setstart_date='&date'
@WHEREGEOGRAPHY_TYPE='PROVINCE'
@andcountry_code='CA'
TaxRelevancy:
1)GeographiesmustbedefinedinorderforaJurisdictiontobecreatedinEBusinessTax
2)Taxcalculationusesthegeographystructuretoidentifyrelevantjurisdictionswhencalculatingtaxes
andevaluatingtaxrulessuchasplaceofsupplyrule.
b.DefineTax&GeographyValidation
Toseehowtosetupanageographyvalidation,refertoNote554492.1
Navigation:TradingCommunity>Administration>GeographyHierarchy
ForCanadayoumustenablegeographyandtaxvalidationattheprovincelevelforhz_locations
YoumustalsoenabledTaxValidationforReference1forthehr_locations_all
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TaxRelevancy:
1)EnablingTaxValidationforprovinceensuresthatalladdressesmatchtheprovincedefinedinTCA.
SinceTCAisthebasisfortheJurisdictionsandplaceofsupplylogicinEBusinessTax,itiscriticalthat
thesebeconsistent.Ifyoudonothavetaxvalidationenabled,thetransactionsinARwillnotvalidatethe
taxlocationandtaxcalculationwillnotoccur.
2)EnablingtaxvalidationforHR_Locationsensuresthatthelegalentityandoperatingunitaddressesare
validfortaxesandanyrulesreferencingbill_from,ship_from,POOorPOAwillworkasintended.
c.SetupaLegalEntity,Establishment,LedgerandOperatingUnit
RefertoNote1064366.1toseestepbystepinstructionsforimplementingaLegalEntity,Establishment,
LedgerandOperatingUnitasrequiredforthiscasestudy.
Responsibility:LegalEntityManager
Navigation:LegalEntities>CreateLegalEntity
LegalEntity:Alegalentityisaclearlyidentifiedentity,whichisgivenrightsandresponsibilitiesunder
commerciallaw,throughregistrationwiththecountry'sappropriatelegalauthority.Legalentitiesare
responsibletoaccountforthemselvestocompanyregulators,taxationauthorities,andownersaccording
torulesspecifiedintherelevantlegislation.
InRelease12LegalEntities"own"oneormoreOperatingUnitswhichinturn"own"transactions.
Patch8671973shouldbeappliedpriortostartingthissteportheprovincewillnotbedisplayedin
yourLOV
TaxRelevancy:
1)ForEBusinesstax,ataxregimecanbeassociatedtoaLegalEntityandthenoptionallyoneormore
OperatingunitsinthatLegalEntitycansharethetaxsetup.
2)AtleastoneLegalEntityforCanadamustbecreated.TheLegalEntityshouldincludetheTax
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Registrationandrepresentsalevelwheretaxsetupcanbeattached.
3)TheRegistrationdefinedontheLegalEntityrecordisthesourceforthelegalestablishmentdefaults.
TheEstablishmenttaxprofileinturnfeedstheBillFrominARandtheBillTo/ShiptoinAP.
4)ThecheckboxontheLegalEntitycontrolsselfassessmentoftaxes.ForCanada,GSTandHSTmust
beselfassessedforimportedgoods.BesureyouupdatetheLegalEntitytoreflectthisafteritis
created
LegalEstablishment:Firstpartylegalentitiesidentifyyourorganizationtotherelevantlegal
authorities,forexample,anationalorinternationalheadquarters.Firstpartylegalestablishmentsidentify
eachoffice,servicecenter,warehouseandanyotherlocationwithintheorganizationthathasatax
requirement.Whenyoucreatealegalentity,thesystemautomaticallycreatesalegalentity
establishment.Youcancreateadditionallegalestablishmentsaccordingtoyourneeds.Foreachlegal
establishmentthereareoneormoretaxregistrations,dependinguponthetaxrequirementsofthe
applicabletaxauthority.
IfyouhavemultiplelegalestablishmentsyoushouldadditionallycreaterecordsaschildrenoftheLegal
Entity.Besuretosetthe"SelfAssessment"tothepropervaluewhencreatingadditionallegal
establishments.
Note604280.1ExplainsHowToAddNewLegalEntityRegistrationCodeforCountriesthatAreNot
AvailableintheList
TaxRelevancy:
1)TheRegistrationdefinedonthemainlegalestablishmentfeedstheBillFrominARandtheBillTo/
ShiptoinAP.Thisaddressisthenconsideredifyourtaxrulesusetheseasthebasisfortaxcalculation.
2)ThecheckboxontheLegalEstablishmentcontrolsselfassessmentoftaxes.ForCanada,GSTand
HSTmustbeselfassessedforimportedgoods.BesureyouupdatetheLegalEstablishmenttoreflect
thisafteritiscreated
Ledger:Alsoknownassetofbooksin11iandpriorreleasesthisistheobjectthatownstheaccounting
structureusedfortransactions.
OperatingUnit:Assignoperatingunitstotheprimaryledgertopartitionsubledgertransactiondata
whenmultipleoperatingunitsperformaccountinginthecontextofoneormorelegalentities.Atleast
oneOperatingUnitmustbedefinedforeachlegalentityandsetofbooks.OperatingUnitsarealso
referredtoas"Organizations".
TheOperatingUnitLocationistakenfromtheLegalEstablishmentrecordreferencedinsection3above
TaxRelevancy:OperatingUnitalongwithLegalEntityrepresenttwolevelswheretaxcontentcanbe
ownedandtaxsetupperformed.
d.AssociatetheOperatingUnitwiththeLegalEstablishment
Responsibility:LegalEntityManager
Navigation:Home>Search>LegalEntityName>Go>ClickonLEName>ClickonEstablishments
Tab
OnceanoperatingunitisdefineditmustbelinkedbacktotheparentLegalEstablishmentrecord.
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e.ReplicateSeedData
ReplicateSeedDatasetsdefaultsinthesystemforanoperatingunitafteritiscreated
Toseehowtorunreplicateseeddata,RefertoNote134385.1HowtoRuntheReplicateSeedData
Program
FormoredetailsonthepurposeoftheseeddataprogramrefertoNote274974.1WhatEffectDoes
"ReplicateSeedData"concurrentrequesthaveonAppls?
f.SetupResponsibilitiesfortheNewOperatingUnit
Responsibility:SystemAdministrator
Forthiscasestudy,setupOperatingUnitspecificresponsibilitiesforproductsincludingthoseshown
below
1)EBusinessTax
2)Payables
3)Receivables
4)OrderManagement
5)GeneralLedger
Addadditionalresponsibilitiesasneededforyourcompany.Thoseshownaboveareminimalrequired
forthiscasestudy.
SomeExamples:
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g.SetupMandatoryResponsibilityLevelProfileOptions
Navigation:Profile>System
ProfileOptionsforResponsibilitiescreatedinstep3f
ProfileName
GL
AR AP
HR:UserType
Yes Yes
Yes Yes Yes
Yes
Yes Yes Yes Yes
Yes
MO:OperatingUnit
GLLedgerName
OM EBTax
>
h.SetupItemValidationOrganizationForTheOperatingUnit
ItemValidationOrganization:UsedtobuildtheListofValuestoaspecificorganizationwhenselecting
inventoryitemstoincludeonanOrder(orInvoiceinAR)
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ToseeasimplifiedstepbystepoverviewofhowtosetupanInventoryOrganizationwithscreenshots,referto
Note1063992.1
Responsibility:OMResponsibilityfromsection3f
Navigation:Setup>SystemParameters>Values
SampleScreenshotshowingAssociatedInventoryOrg
i.SetupaFreightInventoryItem
Ifyouchargefreightandwishtoassesstaxesonfreightyoumustcreateaninventoryitemfortrackingfreight.
Formoreinformationonhowtaxonfreightisconfigured,refertoNote764297.1HowTaxonFreightWorks
inR12OrdertoCash
Thistaxonfreightnotewillagainbereferencedlaterinthiscasestudywhensubsequentsetupisperformed.
TaxRelevancy:Withoutthissetuptheprofileoptionsinthenextstepcannotbesetandthenfreightwillbe
excludedfromtaxcalculationsandcreatedas"freight"insteadofrevenue.
j.SetupTaxandTCAProfileOptions
Formoredetailsonthetaxprofileoptionsandhowtheinfluencetaxes,refertoNote466575.1
Navigation:Profile>System
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ProfileOptionsrequiredforTaxandTCA
ProfileOptionName
Value
ReasoninCaseStudy
HZ:AddressValidationLevelfor
Application
Error
Required
eBTax:AllowAdHocTaxChanges
Yes
eBTax:AllowManualTaxLines
Yes
Availabletosupportdataconversion
eBTax:AllowOverrideofCustomer
Exemptions
No
eBTax:AllowOverrideofTax
ClassificationCode
Yes
Availableifruleswishtobecreatedbasedupontax
codes
eBTax:AllowOverrideofTaxRecovery
Rate
Yes
Canlockdownatlowerlevelsifneeded
eBTax:InventoryItemforFreight
(OracleOrderManagementonly)
Freight EntertheItemcreatedinstep3iInordertoassesstax
onFreightChargesasperRevenueCanada
eBTax:InvoiceFreightasRevenue
(OracleOrderManagementonly)
Yes
InordertoassesstaxonFreightChargesasper
RevenueCanada
eBTax:Read/WriteAccesstoGCOData
Yes
AllowsfortaxestobedefinedatGlobalConfiguration
level
k.SetupReceivablesSystemOptions
Responsibility:Receivablesresponsibility
Navigation:Setup>System>SystemOptions
ToseehowtosetupARSystemOptions,refertotheOracleReceivablesImplementationGuide,Page224
TaxRelevancy:
1)"TaxAccount"inAccountingSystemOptionscanbeusedinAutoAccountingsetupasasource.
2)"TaxInvoicePrintingOptions"controlshowtaxisdisplayedonthedefaultinvoiceprintoutput(Bill
PresentmentArchitecturecanbeutilizedtocreateacustomlayoutandfielddisplay)
3)"ApplicationRuleSet"intheMiscellaneoussystemoptionsdetermineshowReceivablesappliespartial
paymentsandcreditmemostoyourcustomer'sopendebititems,andhowdiscountsaffectthe
openbalanceforeachtypeofassociatedcharges.RefertotheTreasuryBoardofCanadaand/oreach
provincialrevenueagencytodeterminehowtoevaluatepartialpaymentsforyourparticularbusinessneed.
Notethatyoucanadditionallycontrolwhen/ifadiscountappliestoataxwhenyousetupyourreceivableactivity
types.
l.SetupReceivablesAutoAccounting
Responsibility:Receivablesresponsibilityfromstep3f
Navigation:Setup>Transactions>AutoAccounting
ToseehowtosetupanAutoAccountinginReceivables,refertoNote885225.1onimplementingTaxAccounting
forReceivables.
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ForthisCaseStudy,mapthe"account"segmentforthe"Tax"AutoAccountingsothatitisderivedfromthe'Tax'
accountsetupdiscussedlaterinthisdocument.Detailsonhowthetaxaccountisderivedduringinvoiceentry
willbediscussedlaterinthisdocument.
TaxRelevancy:
1)TheTaxAutoAccountingtypeisusedtobuildtheaccountcombinationthatinturnisstoredonthecalculated
taxamountonthetaxline.
2)AutoAccountingisalsocalledduringthetaxruleexecutionwiththeresultingaccountderivedforyourinvoice
linebeingavailableforuseinyourtaxrules.
Note:Ifyoudefineataxruletousetheaccountcombination,theaccountmustbederivedby
AutoAccounting.Manuallyenteredoroverridenaccountcombinationswillbeignoredduringruleexecution.
RefertoNote943657.1formoredetailsonthisrestriction
m.SetupReceivablesTransactionTypes
Navigation:Setup>Transactions>TransactionTypes
TransactionTypesareseededautomaticallywhen"ReplicateSeedData"isruninstep3f.Transactiontypes
mustbeaddedonlyifyourequireadditionaltransactiontypesbeyondthoseseededvalues.
TaxRelevancy:
1)The"DefaultTaxClassification"checkboxmustbecheckedonthetransactiontypeifyouintendtousethe
transactionlinetaxclassificationcodesinyourtaxruledefinitions.(RefertoNote:801535.1forinstructionson
howthismightbeconfiguredorreferencesection5ofthisdocumentwhichdiscussesanexampleapplicableto
Exports).
2)IfyourAutoAccountingsetupreferencesthetransactiontypeasthesourceforTax,theTaxAccountmust
thenbedefinedonthetransactiontypeinthisstep.
n.SetupTransactionSources
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Navigation:Setup>Transactions>Sources
Transactionsourcesareseededby"ReplicateSeedData".Thisstepcanbeskippedifyouhavenochangesor
additionstotheseededvalues
o.InitializeOperatingUnitPartyTaxProfile
Responsibility:TaxManagersresponsibilityfromstep3f
Navigation:Parties>PartyTaxProfiles>OperatingUnitOwningTaxContent
EntertheOperatingUnitthenclick"Create"toinitializeataxprofile.AtthispointintheSetupnothingfurther
needstobedoneexcepttoclick"CreateTaxProfile"andthenapply.
Detailswillbeaddedinalaterstep.ThisTaxProfilemustexistbeforeaReceivablesActivityTypecanbe
entered.
p.SetupReceivablesActivityTypes
Navigation:Setup>Receipts>ReceivableActivities
ForthisCaseStudy,setuponeReceivableActivityTypeforAdjustmentsasshownbelow.(Additionalwillbe
requiredformostimplementations)
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Canadadoesnotdiscountthetaxwhenanearlypaymentdiscountisapplied.Reference:RevenueCanada:
TaxableorExempt
TaxRelevancy:
1)TaxRateCodeSource:TheTaxRateCodeSourceyouspecifydetermineswhetherReceivables
calculatesandaccountsfortaxonadjustments,discounts,andmiscellaneousreceiptsassignedtothisactivity.
IfyouspecifyaTaxRateCodeSourceofInvoice,thenReceivablesusesthetaxaccountinginformationdefined
fortheinvoicetaxratecode(s)toautomaticallyaccountforthetax.IftheReceivablesActivitytypeis
MiscellaneousCash,thenyoucanallocatetaxtotheAssetorLiabilitytaxaccountsthatyoudefineforthis
ReceivablesActivity.IfyousettheTaxRatecodeSourceto"None"thentaxeswillnotbeappliedonthe
adjustment.Thisisrelevantforthediscountexamplementionedabove.
2)Recoverable/NonRecoverable:Asthenamesuggests,thisradiobuttondeterminesiftheadjustment
shouldbeconsideredwhendeterminingrecoverabletaxamounts.
Note1:Ifyouwishtocalculatetaxonamiscellaneousreceipt,thereceivablesactivitytypemaynotbe
linkedtoajurisdictionspecifictaxratebecauseyoucannotentershiptoinformationintheReceipts
window.Pleasekeepthisinmindwhenplanningyourimplementation.
Note2:Thisstepmayneedtobedeferreduntilafterthetaxsetupifyouchoosetosetthetaxratecode
sourcetoActivityandenteracodeontheactivitytype.Thisismostfrequentlydonewhenanactivitytypeis
createdforamisccashreceipt
q.SetupBanks,BranchesandAccounts
FollowthestepsinNote415529.1toaddthenecessaryrolestotheLegalEntityyoucreated.
ToseehowtosetupaBank,BranchandAccount,refertotheARImplementationguide
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r.SetupReceivablesReceiptClass&PaymentMethod
Navigation:Setup>Receipts
ToseehowtosetupaReceiptClassandPaymentMethod,refertotheARImplementationguide
s.SetupApprovalLimits
Navigation:Setup>Transactions>ApprovalLimits
ApprovalLimits:Mustbesetinorderforausertoenterand/orapproveaninvoiceadjustment
Toseehowtosetupapprovallimits,refertotheARImplementationguide
t.RunGeographyNameReferencingProgram
Navigation:Control>Request>Run
ThisprogrammustberunforbothHZ_LocationsandHR_LOCATIONS_ALLforthecountryCanada
TolearnaboutGeographyNameReferencingProgramandwhatitdoes,refertotheTCAImplementationguide
TaxRelevancy:
1)TheGeographyNameReferencingPrograminsertsrecordsintoatablethatisusedbyEBusinessTaxto
translateaddresslocationsintojurisdictions.
(Backtotop)
4TaxSetup
TaxSetupisperformedundertheTaxManagersresponsibilityaddedinstep3
a.DefineRegimes
TaxregimeAsinglesystemoftaxationasdefinedbyasetoflawsandregulationsthatdeterminesthe
treatmentofoneormoretaxesadministeredbyataxauthority.TaxRegimesaretypicallydefinedatthe
countrylevel.
WhyTwoRegimes?
Asabestpracticearegimeshouldbecreatedforeachtaxtype.SincePSTisasalestaxandGST/HSTare
VATtypetaxestworegimesaredefined.Whileitispossibletocombinetheseintoasingleregime,the
compoundingexampleforQuebecandPrinceEdwardIslandpresentedlaterinthecasestudyisbasedupon
atworegimemodel.Thisalsohasbeenthebasisforthetestingofthiscasestudythusifyoudoelectto
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combinetheseintooneregime,youmayneedtoinvestadditionaltimetovalidateyoursolution.
Field
Value
Value
TaxRegimeCode
CAGSTANDHST
CAPST
Name
CAGSTANDHST
CAPST
RegimeLevel
Country
Country
CountryName
Canada
Canada
EffectiveFrom
01Jan2001
01Jan2001
UsedtoGroupRegimes
No
No
AllowTaxRecovery
Yes
Yes
AllowOverrideandEntryofInclusiveTax
Lines
Yes
Yes
AllowTaxExemptions
Yes
Yes
AllowTaxExceptions
No
No
Taxcurrency
CAD
CAD
MinimumAccountableUnit
0.01
0.01
RoundingRule
Nearest
Nearest
TaxPrecision
AllowtaxInclusion
StandardNonInclusive
Handling
StandardNonInclusive
Handling
AllowMultipleJurisdictions
Yes
Yes
AllowtaxRoundingOverride
Yes
Yes
ExchangeRateType
ReportingTaxAuthority
DefaultRecoverySettlement
Immediate
Immediate
TaxAccountsPrecedentLevel
UseLegalRegistrationNumber
No
No
AllowCrossRegimeCompounding
Yes
Yes
CompoundingPrecedence
SampleScreenshotofhowthiswouldbedefined:
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Afterenteringtheabovepage,select"Continue"andthenaddtheconfigurationoptionsettingsasshownfor
yourOperatingUnit.RepeatthisforthePSTregime.
Youmayoptionallysetthe"ConfigurationforTaxesandRules"to"CommonConfiguration"ifyoudonotwishto
retaintheflexibilityforpartyspecific(OUorLEspecific)taxsetup.
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Note:Youcanalsosubscribeatthe"LegalEntity"Level.IfyouonlychoosetheLEoptionthenyoumust
alsoupdateyourPartyTaxProfilefortheOperatingUnittousetheconfigurationoftheLegalEntityorthe
taxwillnotbecalculated.Alsoifyouchoose"LegalEntity"thenitisnotrequiredthatyousubscribethe
operatingunitastheaforementionedcheckboxwillcausetheOUtodefertotheLEsetup.Finally,ifyou
subscribetotheLegalEntitythenanytaxsetupthatmightexistattheOUlevel(Taxes,Rates,etc)wouldbe
ignoredduringtaxcalculation.
b.DefineTaxes
Tax:Ataxrepresentsadistinctchargethatcanbeappliedtoatransaction.
Example:InCanada,dependingupontheprovince,atransactionmayhaveHST,GSTand/orPSTapplied.
Field
Value
Value
Value
TaxRegimeCode
CAGSTANDHST
CAGSTANDHST
CAPST
ConfigurationOwner
GlobalConfiguration
Owner
GlobalConfiguration
Owner
GlobalConfiguration
Owner
Taxsource
CreateanewTax
CreateanewTax
CreateanewTax
Tax
CAGST
CAHST
CAPST
TaxName
FederalGoodsand
ServicesTax
HarmonizedSales
tax
ProvincialSalesTax
TaxType
VAT
VAT
Sales
EffectiveFrom
01Jan2001
01Jan2001
01Jan2001
EnableTaxforProcessing
Yes
Yes
Yes
GeographyType
PROVINCE
PROVINCE
PROVINCE
ParentGeographyType
COUNTRY
COUNTRY
COUNTRY
ParentGeographyName
Canada
Canada
Canada
TaxCurrency
CAD
CAD
CAD
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MinimumAccountableUnit
0.01
0.01
0.01
RoundingRule
Nearest
Nearest
Nearest
TaxPrecision
ExchangeRateType
CompoundingPrecedence
ReportingTaxAuthority
CollectingTaxAuthority
AppliedAmountHandling
Recalculated
Recalculated
Recalculated
SetasOffsetTax
No
No
No
SetTaxforReportingPurposes
Only
No
No
No
AllowTaxInclusion
StandardNon
InclusiveHandling
StandardNon
InclusiveHandling
StandardNon
InclusiveHandling
AllowOverrideandEntryof
InclusiveTaxLines
Yes
Yes
Yes
AllowTaxRoundingOverride
Yes
Yes
Yes
AllowOverrideforCalculatedTax
Lines
Yes
Yes
Yes
AllowEntryofManualtaxLines
Yes
Yes
Yes
UseLegalRegistrationNumber
No
No
No
AllowDuplicateTaxRegistration
Numbers
No
No
No
AllowMultipleJurisdictions
Yes
Yes
Yes
AllowMassCreationof
Jurisdictions
Yes
Yes
Yes
TaxAccountsCreationMethod
CreateTaxAccounts
CreateTaxAccounts
CreateTaxAccounts
AllowTaxExceptions
No
No
No
AllowTaxExemptions
Yes
Yes
Yes
TaxExemptionCreationMethod
AllowTaxRecovery
Yes
Yes
Yes
AllowTaxRecoveryRateOverride
Yes
Yes
Yes
AllowPrimaryRecoveryRate
DeterminationRules
Yes
Yes
Yes
AllowSecondaryRecoveryRate
DeterminationRules
No
Yes
No
PrimaryRecoveryType
STANDARD
STANDARD
STANDARD
SecondaryRecoveryType
SREC
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AllowTaxRateRules
Yes
Yes
Yes
DefaultRecoverySettlement
Immediate
Immediate
Immediate
SampleSetupScreenshots:
c.DefineTaxStatuses
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TaxStatus:Ataxstatusisthetaxablenatureofaproductinthecontextofatransactionandaspecifictaxon
thetransaction.Youdefineataxstatustogrouponeormoretaxratesthatareofthesameorsimilarnature.
Example:Onetaxcanhaveseparatetaxstatusesforstandard,zero,exemption,andreducedrates.Azero
ratetaxstatusmayhavemultiplezeroratesassociatedwithitinordertohandledifferentreporting
requirementsforzerorateusage,suchasIntraEU,zeroratedproducts,orzeroratedexports.ForCanadawe
havedocumentedthesetuptoallowforthispossibilitythoughnospecificexampleisprovidedinthislimited
setupshownbelow
Field
Value
Value
Value
Value
Value
Value
Value
TaxRegime
Code
CAGSTAND
HST
CAGSTAND
HST
CAGSTAND
HST
CAGSTAND
HST
CAGSTAND
HST
CAGSTAND
HST
CAPST
Configuration Global
Global
Global
Global
Global
Global
Global
Owner
Configuration Configuration Configuration Configuration Configuration Configuration Configura
Owner
Owner
Owner
Owner
Owner
Owner
Owner
Tax
CAGST
CAGST
CAGST
CAHST
CAHST
CAHST
CAPST
TaxStatus
Code
CAGST
STANDARD
CAGST
ZERO
CAGST
EXEMPT
CAHST
STANDARD
CAHST
ZERO
CAHST
EXEMPT
CAPST
STANDA
TaxName
CAGST
Standard
CAGSTZero CAGST
Exempt
CAHST
Standard
CAHSTZero CAHST
Exempt
CAPST
Standard
Setas
DefaultTax
Status(1)
Yes
No
No
Yes
No
No
Yes
Default
Status
Effective
From
01Jan2001
01Jan2001
01Jan2
Allowtax
Exemptions
(2)
Yes
Yes
AllowTax
Rate
Override
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Default
Recovery
Settlement
Immediate
Immediate
Immediate
Immediate
Immediate
Immediate
Immedia
1)SetasdefaultTaxstatus:Eachtaxstatusmusthaveatleastonedefault.TaxRulesmustbewritten
tosetalternatevaluesasrequired.
2)AllowTaxExemptions:Witharulebasedapproachtosettingtaxexemptions,exempttransactions
willbelinkedtoanexempttaxstatusandrate.Settingthe"Yes"valuetothisconfigurationoptionwillalso
allowausertodefineataxexemptiononatransactionordirectlyinthepartytaxprofiletorecordthe
exemptreasoncode.Thisishowevernotrequirednorenforced.Becausetheexemptionsareprimarily
trackedbywayoftaxstatus/rateswesuggestthatyouuseCautionwhenreportingifyouintendtousethe
taxexemptionfieldsontheseededreports.
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SampleScreenshotofTaxStatus
d.DefineTaxJurisdictions
Jurisdiction:Theincidenceofataxonaspecificgeographicalarea.Ataxjurisdictionislimitedbya
geographicalboundarythatenclosesacontiguouspoliticaloradministrativearea,mostcommonlytheborders
ofacountry.Oftenthisisrepresentedbyastate,province,cityoracountytaxjurisdiction.InEBusinessTax,a
taxjurisdictioncanusethegeographysetupfromyourTCAgeographyhierarchytoidentifyataxrate.Taxes
suchasHSTandPSTthereforemayrequireratesatthejurisdictionlevel.
Example:CanadianPSTandHSTareapplicablebaseduponthejurisdictions.
ImportantNoteDonotbeginthisstepifyouplantoimporthistoricaltransactionsandhavenotapplied
thedatafixreferencedinstep3.aYouwillnotbeabletobackdatethejurisdictionstartdatesifthisfixhas
notbeenappliedandyourLOVfortheGeographywillreturnnorows.
SetupJurisdictionsforCAGSTANDHST
Field
Value
Value
Value
Value
Value
Value
Value
Value
Value
Tax
CAAB
Jurisdiction
Code
CABC
CABC
CAMB
CANB
CANL
CANS
CANT
CANU
Tax
CA
CA
CA
CANew
CA
CA
CA
CA
CA
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Jurisdiction Alberta
Name
British
British
Manitoba Brunswick Newfoundland Nova
Columbia Columbia
andLabrador Scotia
Northwest Nunavu
Territories
TaxRegime CAGST
Code
AND
HST
CAGST
AND
HST
CAGST
AND
HST
CAGST
AND
HST
CAGST
ANDHST
CAGSTAND
HST
CAGST
AND
HST
CAGST
ANDHST
CAGST
AND
HST
Tax
CAGST
CAHST
CAGST
CAGST
CAHST
CAHST
CAHST
CAGST
CAGST
Geography
Type
Province Province
Province
Province
Province
Province
Province Province
Provinc
Parent
Geography
Type
Country
Country
Country
Country
Country
Country
Country
Country
Country
Parent
Geography
Name
Canada
Canada
Canada
Canada
Canada
Canada
Canada
Canada
Canada
Geography
Name
AB
BC
BC
MB
NB
NL
NS
NT
NU
Precedence 1
Level
Collecting
Tax
Authority
Reporting
Tax
Authority
Effective
From
01Jan
2001
01Jul
2010
01Jan
2001
01Jan
2001
01Jan
2001
01Jan2001
01Jan
2001
01Jan
2001
01Jan
2001
Effective
To
30Jun
2010
Setas
No
DefaultTax
Jurisdiction
No
No
Yes
Yes
No
No
No
No
Default
Effective
From
01Jan
2001
01Jan
2001
SetupJurisdictionsforCAPST
Field
Value
Value
Value
Value
Value
Value
TaxJurisdictionCode
CABC
CAMB
CAON
CAPE
CAQC
CASK
TaxJurisdiction
Name
CABritish
Columbia
CA
CA
Manitoba Ontario
CAPrinceEdward CA
Island
Quebec
CA
Saskatchewan
TaxRegimeCode
CAPST
CAPST
CAPST
CAPST
CAPST
CAPST
Tax
CAPST
CAPST
CAPST
CAPST
CAPST
CAPST
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GeographyType
Province
Province
Province
Province
Province
Province
ParentGeography
Type
Country
Country
Country
Country
Country
Country
ParentGeography
Name
Canada
Canada
Canada
Canada
Canada
Canada
GeographyName
BC
MB
ON
PE
QC
SK
PrecedenceLevel
CollectingTax
Authority
ReportingTax
Authority
EffectiveFrom
01Jan2001
01Jan
2001
01Jan
2001
01Jan2001
01Jan
2001
01Jan2001
EffectiveTo
30Jun2010
30Jun
2010
SetasDefaultTax
Jurisdiction
No
Yes
No
No
No
No
DefaultEffective
From
01Jan
2001
SampleScreenshotofaJurisdictionSetup
e.DefineTaxRecoveryRates
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ForCanadaGSTisnormallyfullyrecoverablewhenpaidasaninputtocreatinganotheritem.(InputTaxCredit
orITC)
PSTisrecoverableundercriteriaestablishedbyeachprovince
HSTisrecoverableasprimary(FederalRecoveryofthe5%portion)andsecondary(Provincialrecoveryofthe
7%or8%provincialcomponentofHST)
Rebates:InCanada,someentitiessuchasMunicipalitiesandHospitalsareabletoclaimaFullorPartial
RebatesforGSTorHSTtaxespaidincaseswherethetaxesarenotsubjecttoInputTaxCredits.Rebatesmay
alsooccurinothercountriesusingasimilarmethodology.FormoreonthisrefertotheCanadaRevenue
Agency.
TaxRecoveryRates
Theratesbelowreflectonlyasubsetofthoseyouwilllikelyrequire.Expandthisasneededforyourunique
industryandbusiness.
IMPORTANT:ReviewNote735991.1onsettingupTaxrecoverybeforeyouenableyourtaxfor
transactionprocessing.
Field
Value
Value
Value
Value
Value
Value
Value
TaxRegime
Code
CAGSTAND
HST
CAGSTAND
HST
CAGSTAND
HST
CAGSTAND
HST
CAGSTAND
HST
CAGSTAND
HST
CAGSTA
HST
Configuration Global
Global
Global
Global
Global
Global
Global
Owner
Configuration Configuration Configuration Configuration Configuration Configuration Configura
Owner
Owner
Owner
Owner
Owner
Owner
Owner
Tax
CAGST
CAGST
CAHST
CAHST
CAHST
CAHST
CAHST
TaxRecovery CAGSTSTD
RateCode
RECRATE
CAGST
ZEROREC
RATE
CAHSTSTD
PROVREC
RATE
CAHSTBC
PROVREC
RATE
CAHST
ZEROPROV
RECRATE
CAHSTSTD
FEDREC
RATE
CAHSTN
FEDREC
RATE
Recovery
Type
Standard
Standard
SecRec
Type1
SecRec
Type1
SecRec
Type1
Standard
Standard
Percentage
Recovery
Rate
100
61.54
58.33
38.46
33.33
Effective
From
01Jan2001
01Jan2001
01Jan2008
01Jul2010
01Jan2008
01Jul2010
01Jul20
EffectiveTo
Setas
Default
Yes
Effective
From
01Jan2001
AllowAdHoc
Rate
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Note:Donotusea'%'signinthetaxrecoveryratecodeasthiswillreturnerrorswhenattemptingtoset
therecoveryrateonataxrate.Internalbug9343870waslogged.
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Errorthatwilloccurifthisisdoneis:"Therateperiodandtheassociateddefaultrecoveryratemust
overlap.Youcan:adjusttherateperiodenteranotherdefaultrecoveryratethatisvalidfortheentered
rateperiodorclearthedefaultrecoveryrate."
f.DefineTaxRates
TaxRatesAtleastonetaxrateisrequiredforeachtaxstatus.AdditionalTaxRatesmaybeneededatthe
JurisdictionLevelifthetaxrateapplicableforthetaxisuniqueforaparticularjurisdiction.
Example:InCanada,HSTisappliedata13%rateinMostprovincesthathaveadoptedHSTexceptforBC
wheretheRateis12%andNovaScotiawheretherateis15%.Tosatisfythisrequirementasinglerateof
13%canbedefinedwithnojurisdictionandthena12%ratecanbedefinedandassociatedwiththeBC
jurisdiction(15%rateassignedtoNovaScotia).Thisminimizesthesetuprequiredbycreatinganexception
basedsetup.
Note:InsomecasessuchasAlcoholsales,taxesareappliedatthequantitylevel.Ifthereforea$0.05tax
isapplicableforeachbottleasecondarytax,statusandratecanbecreatedtoapplythistax.Thisisnot
reflectedintheexamplesbelow
SetupRatesforGSTANDHST
Field
Value
Value
Value
Value
Value
Value
Value
TaxRegime
Code
CAGSTAND
HST
CAGSTAND
HST
CAGSTAND
HST
CAGSTAND
HST
Configuration
Owner
Global
Configuration
Owner
Global
Global
Global
Configuration Configuration Configuration

Owner
Owner
Owner
Tax
CAGST
CAGST
CAGST
CAHST
TaxStatusCode
CAGST
STANDARD
CAGST
ZERO
CAGST
EXEMPT
CAHST
STANDARD
TaxJurisdiction
Code
TaxRateCode
CAGST
STANDARD
RATE
CAGST
ZERORATE
CAGST
EXEMPT
RATE
CAHST
STANDARD
RATE
RateType
Percentage
Percentage
Percentage
Percentage
PercentageRate
13
14
EffectiveFrom
01JAN2008 01JUL
2006
01JAN
2001
01JAN2008 01JUL
2006
EffectiveTo
31DEC
2007
30JUN
2006
31DEC
2007
TaxRateName
CAGST
Standard
Rate
CAGSTZero CAGST
Rate
ExemptRate
CAHST
Standard
Rate
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DefaultRecovery CAGST
STANDARD
RateCode
RECRATE
CAGST
CAGST
CAGST
STANDARD STANDARD ZEROREC
RECRATE RECRATE RATE
CAGST
ZEROREC
RATE
CAHSTSTD
FEDREC
RATE
CAHST
STDFED
RECRATE
RecoveryType
STANDARD STANDARD STANDARD
STANDARD
STANDARD
STANDARD
DefaultRecovery Immediate
Settlement
Immediate
Immediate
Immediate
Immediate
Immediate
Immediate
SetasDefault
Rate
Yes
Yes
Yes
Yes
Yes
Yes
Yes
DefaultEffective
From
01Jan2008
01Jul
2006
01Jan
2001
01Jan2001
01Jan2001
01Jan2008
01Jul
2006
DefaultEffective
To
31Dec
2007
30Jun
2006
31Dec
2007
AllowTax
Inclusion
Standard
Non
Inclusive
Handling
Standard
Non
Inclusive
Handling
Standard
Non
Inclusive
Handling
Standard
Non
Inclusive
Handling
Standard
Non
Inclusive
Handling
Standard
Non
Inclusive
Handling
Standard
Non
Inclusive
Handling
AllowOverride
andEntryof
InclusiveTax
Lines
Yes
Yes
Yes
Yes
Yes
Yes
Yes
AllowTax
Exemptions
No
No
No
No
Yes
No
No
AllowTax
Exceptions
No
No
No
No
No
No
No
AllowAdHoc
Rate
No
No
No
No
No
No
No
Adjustmentfor
AdHocAmounts
Taxable
Basis
Taxable
Basis
Taxable
Basis
Taxable
Basis
Taxable
Basis
Taxable
Basis
Taxable
Basis
TaxAccounts:
Optional
Tax
Recovery/Liability
Optional
Optional
Optional
Optional
Optional
Optional
STANDARD
SetupRatesforPST
Field
Value
Value
Value
Value
Value
Value
Value
TaxRegime
Code
CAPST
CAPST
CAPST
CAPST
CAPST
CAPST
CAPST
Configuration
Owner
Global
Global
Global
Global
Global
Global
Global
Configuration Configuration Configuration Configuration Configuration Configuration Configu
Owner
Owner
Owner
Owner
Owner
Owner
Owner
Tax
CAPST
CAPST
CAPST
CAPST
CAPST
CAPST
CAPST
TaxStatusCode
CAPST
STANDARD
CAPST
STANDARD
CAPST
STANDARD
CAPST
STANDARD
CAPST
STANDARD
CAPST
STANDARD
CAPST
STAND
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TaxJurisdiction
Code
CAQC
CAON
CAPE
CASK
CABC
CASK
TaxRateCode
CAPST
STANDARD
RATE
CAPST
STANDARD
RATE
CAPST
STANDARD
RATE
CAPST
STANDARD
RATE
CAPST
STANDARD
RATE
CAPSTBC
SPECIAL
RATE
CAPST
SPECIA
RATE
RateType
Percentage
Percentage
Percentage
Percentage
Percentage
Percentage
Percen
PercentageRate
7.5
10
3.5
EffectiveFrom
01Jan2001
01Jan2001
01Jan2001
01Jan2001
01Jan2001
01Jan2001
01Jan
EffectiveTo
30Jun2010
30Jun2010
TaxRateName
CAPST
Standard
Rate
DefaultRecovery CAPST
RateCode
ZEROREC
RATE
CAPST
ZEROREC
RATE
CAPST
ZEROREC
RATE
CAPST
ZEROREC
RATE
CAPST
ZEROREC
RATE
RecoveryType
STANDARD
STANDARD
STANDARD
STANDARD
DefaultRecovery Immediate
Settlement
Immediate
Immediate
Immediate
Immediate
SetasDefault
Rate
Yes
Yes
Yes
Yes
Yes
Yes
Yes
DefaultEffective
From
01Jan2001
01Jan2001
01Jan2001
01Jan2001
01Jan2001
01Jan2001
01Jan
DefaultEffective
To
30Jun2010
30Jun2010
AllowTax
Inclusion
Standard
Non
Inclusive
Handling
Standard
Non
Inclusive
Handling
Standard
Non
Inclusive
Handling
Standard
Non
Inclusive
Handling
Standard
Non
Inclusive
Handling
Standard
Non
Inclusive
Handling
Standa
Non
Inclusiv
Handlin
AllowOverride
andEntryof
InclusiveTax
Lines
Yes
Yes
Yes
Yes
Yes
Yes
Yes
AllowTax
Exemptions
No
No
No
No
No
No
No
AllowTax
Exceptions
No
No
No
No
No
No
No
AllowAdHoc
Rate
No
No
No
No
No
No
No
Adjustmentfor
AdHocAmounts
Taxable
Basis
Taxable
Basis
Taxable
Basis
Taxable
Basis
Taxable
Basis
Taxable
Basis
Taxable
Basis
TaxAccounts:
Optional
Tax
Recovery/Liability
Optional
Optional
Optional
Optional
Optional
Optiona
STANDARD
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SampleScreenshots:TaxRate
TaxRateDetails
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TaxAccounts
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g.DefinethePartyTaxProfileforLegalEntity&OperatingUnit
Ataxprofileisthebodyofinformationthatrelatestoaparty'stransactiontaxactivities.Ataxprofilecan
includetaxregistration,taxexemptions,configurationoptions,mainanddefaultinformation,partyfiscal
classifications,taxreportingcodes,andaccounttaxdetails.
StepsRequired:
1)SetupataxprofilefortheOperatingUnitandLegalEntity.Makesurethatyouhaveselectedbothtax
regimesasassociatedtotheOperatingUnit(willautomaticallycopytotheLegalEntity)orthatyousetbothtax
regimesasassociatedtothelegalentityandyoucheckthe"UseSubscriptionoftheLegalEntity"checkboxon
theOperatingUnittaxprofile.Forthiscasestudywearesubscribingattheoperatingunit.
2)Makesurethe"SetforSelfAssessment/ReverseChargecheckboxischeckedifyouwishtoselfassessin
AP(requiredforimports)
SampleScreenshotofOUTaxProfile
TaxRelevance:
1)TaxProfilescontainvastamountsofdatathatcaninfluencetaxcalculationsandreporting.Most
significantly,theconfigurationoptionstabontheLegalEntityandOperatingUnitidentifythetaxregimesthat
willbeinvokewhenatransactioniscreated.
Note:Ifyouselectthe"UseSubscriptionoftheLegalEntity"ontheOperatingunittaxprofile,the
configurationoptionswillbeignoredandinsteadtheapplicationwillreferencethelegalentity.Thisalso
eliminatessomefeaturesinEBusinessTaxsuchastheabilitytodefinetaxrulesthatreferenceoperating
unit"owned"componentssuchastransactiontype.Usecautionwhenselectingthisvalueasyoucannot
reversethisselection.
2)SelfAssessmentiscriticalforAPifyouimportmaterials.
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h.SetupDefaultTaxRules
TaxRulesareevaluatedbytheruleengineforeachenabledtaxwithinataxregime.Rulesuseacombination
ofdefaultsplus1..Nnumberofadditionaluserdefinedrulestodetermineifataxshouldbeapplied,whatthe
taxablebasisshouldbeforthetaxapplication,whatratetouse,whatjurisdictionisrelevant(Placeofsupply),
whatsourcetouseforataxregistration,whattaxstatustoapply,whatcalculationmethodtoexecuteand
finallywhatrecoveryratetoapply(ifapplicable).
Setupdefaultsforeachofthetaxesdefinedinstep4basshownbelow
Rule
CAGST
CAHST
CAPST
DirectTaxRate
Determination
Blank
Blank
Blank
DeterminePlaceof
Supply
Shipto,usebilltoifship
toisnotfound
toisnotfound
toisnotfound
DetermineTax
Applicability
Applicable
Applicable
Applicable
DetermineTax
Registration
ShipFromParty
ShipFromParty
ShipFromParty
DetermineTax
Status
CAGSTSTANDARD
CAHSTSTANDARD
CAPST
DetermineTaxRate
CAGSTSTANDARDRATE
CAHSTSTANDARDRATE
CAPSTSTANDARDRATE
DetermineTaxable
Basis
STANDARD_TB
STANDARD_TB
STANDARD_TB
CalculateTax
Amounts
STANDARD_TC
STANDARD_TC
STANDARD_TC
Note:Notalltaxrulesdefaultsaresetinthe"taxrules"window
1)DirectTaxRateDeterminationisnormallyonlyusedforupgradedregimes.Thisruleisalsoignoredif
anyotherrulesareenabled
2)DetermineTaxStatusissetonthetaxstatussetupform
3)DetermineTaxRateissetontheTaxRatesetupform
4)TaxablebasisissettoexcludeearlypaymentdiscountsasCanadadoesnotdiscountthetaxwhenan
earlypaymentdiscountisapplied.Reference:RevenueCanada:TaxableorExempt
SampleScreenshotoftheGSTTaxDefaultsisShownBelow
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i.MakeTaxAvailableForTransactions
Enableeachtaxfortransactionprocessing.
Toseehowtoenableataxandlearnmoreaboutthesettingsandvalidationrequiredtoenableatax,referto
notetheEBusinessTaxUserGuide
Note:Notshownareseveralstepsrequiredtodefineataxrecoveryrule.Ifyouhaveselectedtoallow
primarytaxrecoveryratedeterminationrulesthenatleastonesuchrulemustexistforeachtax.These
stepsinvolvesettingupinventoryandthusarenotcurrentlyshowninthiscasestudy.Theywillbeaddedas
supportingcontentiscreated.
Toenableataxforthiscasestudytakethefollowingactions:
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1)Querythetax
2)Select"Update"
3)ExpandTaxtoview"DefaultsandControls
4)Selecta"DefaultPrimaryRecoveryRateCode"and"DefaultSecondaryRecoveryRateCode"asshownin
thetablebelow
5)Apply
Field
Value
Value
Value
Tax
CAGST
CAHST
CAPST
DefaultPrimaryRecovery
RateCode
CAGSTSTANDARD
RECRATE
CAHST100PCTFEDREC
RATE
CAPSTSTANDARD
RECRATE
DefaultSecondaryRecovery
RateCode
CAHST61.54PCTPROV
RECRATE
61.54PCTrateisbaseduponcurrentprimaryHSTrecoveryrateforallprovincesexceptforBC.InBCthe
recoveryrateis7/12thor58.33%.Aseparaterateandrulemustbedefinedtoapplythisrecoverrate.
Note:Bug9762787hasreportedaproblemwherethemessagebelowisdisplayedevenwhenataxrate
hasbeendefined:
Row1ErrorYoumustfirstdefineataxrateforthistax.
Thisissolvedafterapplyingpatch9762787:R12.ZX.B
Orasaworkaroundyoucanuncheckthecheckboxnextto"Allowtaxraterules"andenablethetax.This
canbechangedatalaterdatewhen/ifyoudefineataxraterule.
j.PerformaBaselineTestinAR
AtthispointintheCaseStudyyoushouldbeabletotestandseetaxescalculating.Performthesimpletest
belowtovalidateyoursetup:
1)Createacustomer
Name:CanadaTestCorporation
Address:123MainStreet,Toronto,ONL5R3P4,Canada
SetasPrimaryBillToaddressandsave
2)OpentheGLperiod(s)
3)Enteraninvoiceforthiscustomer.Save.Taxesshouldcalculate
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Sohowdidthepriorstepscausethistocalculate?
1)AnInvoicewasenteredagainstaspecificOperatingUnitwhichispartofaLegalEntity
2)TheOUorLEarelinkedtothe"TaxRegime"bywayofthetaxprofile.ThistriggeredEBusinesstaxto
considertheregime.
3)Thetaxplaceofsupplyrulevalidatedthatthebilltoaddressshouldbeconsidered
4)Thebilltoaddressontheinvoicehadaprovinceandcountrythatcouldbetiedtoataxingjurisdictionwithin
theregime
5)Thetaxingjurisdictionwasfoundtobeassociatedwithavalidtaxrate
6)Thetaxwasapplicable
7)Standardtaxcalculationwasused(ruledefaultssaidtouselineamount*Taxrate)
k.PerformaBaselineTestinAP
PerformAPSetupasrequiredforyoursite.SeetheAPImplementationManualforrequiredsteps.
Forthiscasestudyasimplifiedsetofstepswereperformedthatincluded:
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1)SetupPaymentTerms
2)Setupbank,branchandaccount(usedsamesetupasfromARinsection3)
3)SetupFinancialOptions(requiredtosetupinventoryorgfirstseesection3)
4)SetupSupplier:
Name:CanadaSupplier
Address:123OracleWayToronto,ONABC123
Invoicewasenteredwithminimumdata
Controlamountfortaxwasenteredas$13andInvoiceamountof$100
CalculateTaxreturnstheamountsshownbelowforGSTandPST
5.TaxSetup:TaxSetupForCommonScenarios
ThissectiondiscussestaxsetupnecessarytoaddresssomecommonscenariosencounteredinCanada.For
moreonhowtosetuptaxrulesandusedeterminingfactorspleasereviewNote1108463.1wherewelisteach
determiningfactorandprovidesampletaxrulesetupbuiltuponthiscasestudy.
a.AdjustingtheTaxableBasisforQuebecandPrinceEdwardIsland
Thetaxablebasisformulaformosttransactionsis(lineamount)*(taxrate).SincethePSTinQuebecandon
PrinceEdwardIslandiscalculatedonthesellingpriceplusGST,youwillneedtodefineaDetermineTaxable
Basistaxruletoidentifywhenadifferenttaxablebasisisneededandwhichtaxablebasistaxformulatouse.
Note1063491.1documentsthestepbystepsetuprequiredtocomplywiththisrequirement.
TaxSetupImpactofNoteonCaseStudy:
1)TaxRegimecompoundingmustbeenabledandprecedenceset(Alreadyshowninstep4aonTaxRegime
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setup)
2)TaxZonesetuprequired(Newstepnoimpactonpriorsetup)
3)TaxFormulasetuprequired(Newstepnoimpactonpriorsetup)
4)TaxableBasisRulesetuprequired(Newstepnoimpactonpriorsetup)
b.ZeroRatedItemsforExport
TheCanadaRevenueAgencyhasstatedthatgoodexportedoutofCanadaarezeroratedforGSTiftheytake
deliveryoutsideofCanada.GoodsdeliveredinsideCanadamayalsobezeroratedasexportsincertain
circumstancessuchaswhenthepurchaseisnotaconsumerandthepurchaserexportsthegoodsassoonasis
reasonableinthecircumstanceafteryoudeliverthem.
ThedefaultlogicwillautomaticallyexcludeitemswithashiptoaddressoutsideofCanadafromhavingGST
applied.Thisexampleassumesthatallexportsshouldinfacthaveataxlinewithazeroratetaxinsteadofno
taxlineatall.Itaddressestwoscenarios:
Scenario1:GoodsaresoldwithashiptoaddressoutsideofCanada
Scenario2:GoodsaredeliveredinCanadaforimmediateexport
AgaininbothofthesecasesthetaxshouldapplywithaZeroRate.
Note1063534.1'HowToApplyAZeroRateTaxToExports'hasbeencreatedtoprovidestepbystep
instructionsforsettinguprulestocomplywiththisrequirement.
AsimilarapproachcanbetakenwhencreatingtaxrulesforotherExemptorZeroRatedgoodsasdefinedby
CanadaRevenue
1)2Taxplaceofsupplyrulesrequired
2)TaxratemustbeaddedtoregimetoallowforLOVselection
c.ApplyingTaxtoFreight
InCanada,GSTandHSTarenormallyassessedonthetransportationexpenses.RefertotheGST/HSTInfo
SheetpublishedbyCanadaRevenueformoredetails.Therequirementisthereforetotaxfreightchargesalong
withtheitemcost.Thisisdonebyfollowingtheinstructionsreferencedinthenotebelow.
Note764297.1HowTaxonFreightWorksinR12OrdertoCash
Note:Theexampleinthenoteisnotspecifictothiscasestudybutthesameflow/approachcanbeused
forCanada.
1)TaxProfileOptionSettingsrequired
2)Freightmustbedefinedasinventoryitem
3)ProductFiscalClassificationsetupmayberequired
4)Taxapplicabilityrulemayberequired
5)Taxexceptionmayneedtobecreated
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d.SelfAssessedTaxes
InCanada,taxesmustbeselfassessedforanumberofscenariosincludingagainstpurchaseswherethe
supplierisoutsideofCanadaandnotregisteredtoassesstaxes.
Toseehowtoconfigureyoursystemtocomplywiththissamplescenario,refertoNote948414.1Howto
ConfigureaTaxforAutomaticSelfAssessmentinR12EBusinessTaxandPayables
1)TaxprofileforLEmayneedtobeupdated
2)Vendortaxprofilesmayneedtobecreated
3)TaxRegistrationRulemayberequired
e.ReportingByTaxAuthority
InordertorunreportsbyTaxAuthorityyoumustcreateataxingauthorityandassociateattheproperlevelin
yourregimetoratesetup.
ToseehowtoconfigureaTaxAuthorities(akaLegalAuthority),followthestepsoutlinedin
Note817698.1.
ForPSTyoushouldassociatetheTaxAuthorityattheJurisdictionlevel.
BesuretocreateaTaxAuthorityforCanadaRevenueAgencyaswellasoneforeachPSTtaxingauthority.A
taxauthoritycanbedefinedasacollectingorreportingtaxauthority.
1)LegalAuthoritymustbecreated
2)LegalAuthoritymustbelinkedtoexistingtaxobjects(jurisdiction,rates,etc)asneededforbusiness
requirements
f.ChargingDifferentTaxAccountsForEachTax
Receivables:
Inmanycases,companiesdesiretotracktheirtaxliabilitiesusinguniquetaxaccountcombinationsforeachTax
thatisassessedonaninvoice.Forexample,inCanadaaninvoicemaybechargedbothPSTandGST.To
reportontheliabilityoutofGLthesewouldneedtohitseparateaccountcombinations.
ThisisaccomplishedbysettingupReceivablesAutoAccountingandmappingEBusinessTaxaccountsatthe
properlevel.
ToseeadetailedexampleofhowthissetupisperformedandhowEBusinessTaxandReceivableswork
togethertoderiveinterimtaxaccounts,refertoNote885225.1SettingupTaxAccountforR12EBusinessTax
andOracleReceivables.
Payables:
ToseemoreinformationabouthowtaxaccountingisconfiguredforPayables,refertotheaccountingsectionin
<Note735991.1>
1)Taxsetupmayrequirechanges(NOTE:Changesmustbemadepriortoperformingsection4!)
2)Jurisdictionsetupmayrequirechanges(NOTE:Changesmustbemadepriortoperformingsection4!)
3)TaxAccountsmustbesetatappropriatelevels
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g.SettingupTaxrecoveryforITCandRebates
Asdiscussedearlierinsection4eofthisnote,CanadaallowsforrecoveryonHSTandGSTandsomeprovinces
allowrecoveryofallorsomePSTpayments.Tosatisfythisrequirementyouwillneedtoconfigurerecoverable
taxes.
ForHSTrecoverybothaprimaryrecoveryrateandsecondaryrecoveryratearetypicallyrequired.Configure
primaryrecoveryforthefederalportionofyourtaxrecoveryandsecondaryrecoveryfortheprovincialrecovery.
IfyoucanrecoverboththroughInputTaxCreditsandRebates,considersettingupuniquerecoveryratesfor
each.Youcanthensetaccountsforeachscenariotosimplifyyourreportingandtaxformpreparations.
Toseeadetailedexampleofhowrecoverabletaxesareimplemented,refertoNote735991.1
6TestingYourTaxConfiguration
Thissectionwillbeexpandedgreatlyinthecomingmonthswithdetailedtestcasesandmorecomprehensive
scenarios.Theintentofthissectionistoprovidealistingoftopicsthatshouldbeconsideredwhentestingyoursetup.
a.Receivables
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
InvoiceEntrywithautomaticcalculation
InvoiceEntrywithManualEntryofTaxLine
AutoInvoiceIntegrationwithothermodules
AutoInvoiceIntegrationwithLegacysystems
AutoInvoiceDataMigration
CreditMemoApplied
CreditMemoOnAccount
Adjustments(Tax)
Adjustments(NonTax)
TaxAccounting
TaxCompounding
TaxExemptions
Exports
ExceptionRates
MiscellaneousReceipts
ReceiptApplications
TaxReporting
b.Payables
1.
2.
3.
4.
5.
6.
7.
StandardInvoiceEntrywithtaxcontrolamount
SelfAssessment
CreditMemo's
TaxRecovery
TaxReporting
TaxExceptionRates
TaxExemptions
CommunityDiscussion
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AllPlaces >MyOracleSupportCommunity >OracleEBusinessSuite(MOSC)>EBusinessTax(MOSC)
49Replies
Latestreply:Oct16,201312:46AMbyUser586443OC
user560115 Oct15,201311:35PM
DedicatedThread:CaseStudyonCanadaTaxsetup
uptakebyBCandOntario
StartinginJuly2010,BCandOntario willjoin4otherprovincesinusingHST
documentationthatwillhelpallofyouwiththismigration.Letusknowifyouhavestartedthissetup.Wha
Whatquestionshavearisen?Alsoletusknowifyouhaveanyrequirementsthatyouneedtosatisfysow
thatarecreated.
Note577996.1hasbeencreatedasacasestudyonhowonemightgoaboutsettinguptaxforCanada.P
andsuggestionssowecanenhancethisnotefurther.
CommunitythreadforCanadaTaxSetup.
REFERENCES
NOTE:463001.1EBusinessTaxSeedData
NOTE:466575.1WhatIsTheUsageOfEBusinessTaxProfileOptions?
NOTE:554492.1SettingUpGeographyHierarchyAndAddressValidationInRelease12
NOTE:604280.1HowToAddNewLegalEntityRegistrationCodeForCountriesThatAreNotAvailableInTheList?
NOTE:735991.1ImplementingandUsingTaxRecoveryinR12EBusinessTax(EBTax)
BUG:7150723UNABLETOSETSTARTDATEFORHZ_GEOGRAPHIES
BUG:9762787CANNOTMAKETHECAPSTTAXLIVEWHENALLOWTAXRATERULEISCHECKED
NOTE:1062897.1CaseStudy:HowtoSwitchFromanUpgradedTaxRegimetoaNewTaxRegimeCanadaHST
example
NOTE:1063534.1HowToApplyATaxToExportsinR12EBusinessTax(EBTax)
NOTE:1063992.1HowDoISetUpaInventoryOrganization
NOTE:1064366.1HowtoAddaNewLegalEntity,LedgerandOperatingUnitforaNewCountry
NOTE:1108463.1HowTaxDeterminingFactorsWorkwithTaxRulesinR12EBusinessTax
NOTE:134385.1HowtoRuntheReplicateSeedDataProgram
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NOTE:738000.1CanICreateaTaxGroupinR12EBusinessTax?
NOTE:764297.1HowtoSetupTaxonFreightinR12EBusinessTax(EBTax)OrdertoCash
NOTE:274974.1WhatEffectsDoesReplicateSeedDataConcurrentRequestHaveOnOracleApplications?
NOTE:415529.1R12:CE:UnabletoSeetheLegalEntityListofValuesintheBankAccountOwnerField
NOTE:943657.1TaxRulesDoNotConsiderManuallyEnteredRevenueAccount
NOTE:948414.1HowtoConfigureaTaxtoSelfAssessinR12EBusinessTax(EBTax),PayablesandPurchasing
(Offset,UseTax)
NOTE:801535.1HowtoSetupandTroubleshootTaxClassificationCodesandUseinTaxRuleinR12EBusinessTax
(EBtax)
NOTE:810443.1OverviewoftheR12EBusinessTax(EBTax)UpgradeforOrdertoCash
NOTE:885225.1SettingUpandTroubleshootingTaxAccountingforR12EBusinessTax(EBTax)andOracle
Receivables
NOTE:1063491.1HowtoSetupaTaxableBasisRuleforTaxCompoundinginR12EBusinessTax(EBTax)
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