ORACLE APPLICATIONS WHITE PAPER USE CASES FOR IMPORTING TAX LINES THROUGH THE PAYABLES IMPORT PROCESS

JUNE 2009

Contributors:

Narayana Palukuri, Product Management Cheryl Riniker, AP Center Riniker of Expertise

Versions:

1 June, 2009

Oracle/Client Confidential - For internal use only

Contents

Introduction..................................................................................................................................3 Objective...............................................................................................................................3 Scope.....................................................................................................................................3 Background...........................................................................................................................3 Importing Tax Lines Using the Payables Open Interface.............................................................4 Overview...............................................................................................................................4 Interface tables......................................................................................................................4 Important Considerations while Importing Invoices with Tax Lines....................................4 Important Tax Driver Columns.............................................................................................5 Use Case Scenarios .......................................................................................................................6 Use Case 1: System Calculated Taxes..................................................................................6 Use Case 2: Exclusive Manual Tax ......................................................................................6 Use Case 3: Exclusive Manual Tax Applicable to All Item Lines........................................6 Use Case 4: Exclusive Manual Tax Line Not Applicable to All Item Lines........................7 Use Case 5: Multiple Exclusive and Manual Tax Lines.......................................................7 Use Case 6: Multiple Exclusive and Manual Tax Lines, Not All Lines have Tax...............8 Use Case 7: Multiple Exclusive and Manual Tax Lines, One Tax Line Prorated Across Many Lines............................................................................................................................9 Use Case 8: Multiple Exclusive and Manual Tax Lines, Same Regime to Rate Information............................................................................................................................9 Use Case 9: Inclusive Manual Tax......................................................................................10 Use Case 10: Inclusive Manual Tax Line Applicable to All Lines.....................................10 Use Case 11: Multiple Inclusive and Manual Tax Lines....................................................11 Information Sources...................................................................................................................12

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Introduction

Objective
The objective of this document is to provide various business use cases for how to populate tax line information in the ap_invoice_lines_interface that need to be imported through the Payables Invoice Import process. This document focuses on importing tax lines in R12.

Scope
This document defines use cases for importing invoices using Payables Open Interface Import with Tax lines. This document covers following scenarios: Importing invoices which allow the system to calculate taxes after import Importing exclusive manual tax lines Importing inclusive manual tax lines

Background
The Payables Import Process provides the ability to import invoices from other sources, either for upgrade to R12 or as a part of their regular business processes if invoices are provided as part of a feeder system.

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Importing Tax Lines Using the Payables Open Interface

Overview
The Payables Invoice Import is a concurrent request that should be submitted from an Accounts Payable (AP) responsibility. The purpose of the program is to interface invoice lines either from another module in Oracle Applications or for a system. The import

Interface tables
There are two tables that hold the data to be imported AP_INVOICES_INTERFACE AP_INVOICE_LINES_INTERFACE

Additionally, the following table holds the rejection reasons if an invoice is not successfully imported. AP_INTERFACE_REJECTIONS

Important Considerations while Importing Invoices with Tax Lines

1. The setup of Configuration Owner Tax Option under the Defaults and Controls section of EB-Tax, controls the creation of tax lines for the invoices imported using open interface. Please select appropriate options during your implementation. 2. The Place of Supply option under Tax Rules needs to be selected carefully during implementation Tax Rules - Place of Supply Options: - Operating Unit is for Bill-To location - Supplier & Supplier Site are for Bill-From and Ship-From - Location is for Ship-To

This setup is valid only for system calculated tax lines and not relevant for manually imported tax lines 3. For non-recoverable tax, the distribution will get the account from its corresponding ITEM line or EXPENSE account. For recoverable tax, the distribution will get the account from the account set up done at either Recover Rate or Tax rate and if neither are setup, then the interim tax account is used. The Validation process will get these distribution accounts. 4. In R12 you cannot have multiple tax lines with the same regime to rate information being allocated to a single item line. Single regime to rate can be allocated to multiple item lines for an invoice, however multiple tax lines with the same regime to rate information are not supported 5. If CALC_TAX_DURING_IMPORT_FLAG is set to Y during import, EB Tax will calculate taxes automatically as per the tax setup. Following columns in AP_INVOICE_LINES_INTERFACE are tax driver columns, which may be used to determine the tax applicability during import:
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PRIMARY_INTENDED_USE PRODUCT_CATEGORY PRODUCT_FISC_CLASSIFICATION USER_DEFINED_FISC_CLASS SHIP_TO_LOCATION_ID PRODUCT_TYPE TRX_BUSINESS_CATEGORY

Important Tax Driver Columns

PRORATE_ACROSS_FLAG If this column is set to Y and this is a non-Item type line (Tax, Miscellaneous, or Freight), then Payables will prorate the charge to all Item type lines with the same LINE_GROUP_NUMBER as this line. If no line group number is specified, Payables will prorate the charge to all Item lines. If this column is set to N, then Payables will not prorate the cost and will create only one distribution. Payables prorates tax for Tax type lines, freight for Freight type lines, and miscellaneous for Miscellaneous type lines. Payables create a distribution line for each line you prorate the charge to. The system assigns the expense account of the Item line to the new invoice distribution. LINE_GROUP_NUMBER If a charge needs to be prorated to a group of lines, enter an identical line group number value for each Item line to which charge to be prorated. For example, if a tax to be prorated across two Item lines, enter the same line group number for the two Item lines and the Tax line. CALC_TAX_DURING_IMPORT_FLAG Indicates whether tax should be calculated or not for the imported invoice. If this column is set to Y, then EBTax will calculate the tax automatically for the imported invoices based on Tax setup and data populated in Tax Driver columns of interface tables. Do not populate data in AP_INVOICE_LINES_INTERFACE with TAX lines if this column is set to Y. For manual TAX lines, leave this column blank in AP_INVOICES_INTERFACE. INCL_IN_TAXABLE_LINE_FLAG This column is the flag to indicate if the amount in the tax line is included or not in the taxable line. For Exclusive Tax lines both for manual and system generated tax lines leave this column blank. This flag is only relevant to tax lines and for non-tax lines this flag should be populated as NULL. Note: The count of AP_INVOICE_DISTRIBUTION_ALL rows given in the uses cases is based on the assumption that the taxes are non-recoverable. If a recoverable rate is not 100% for each tax line, there will be two distributions, a recoverable ditribution and a non-recoverable distribution line.

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Use Case Scenarios

Use Case 1: System Calculated Taxes
Example: An invoice with one ITEM line and system should calculate taxes. Set the CALC_TAX_DURING_IMPORT_FLAG to Y and populate data in AP_INVOICE_LINES_INTERFACE as below: Interface Column Name LINE_NUMBER LINE_TYPE_LOOKUP_CODE AMOUNT LINE_GROUP_NUMBER PRORATE_ACROSS_FLAG TAX_REGIME_CODE TAX TAX_STATUS_CODE TAX_RATE_CODE DIST_CODE_CONCATENATED ITEM Line1 1 ITEM 100

99-999-9999

Use Case 2: Exclusive Manual Tax

Example: An invoice with one ITEM line of 100 USD and one TAX line (manual and exclusive) of 10 USD Populate the data in AP_INVOICE_LINES_INTERFACE as below: Interface Column Name LINE_NUMBER LINE_TYPE_LOOKUP_CODE AMOUNT LINE_GROUP_NUMBER PRORATE_ACROSS_FLAG TAX_REGIME_CODE TAX TAX_STATUS_CODE TAX_RATE_CODE DIST_CODE_CONCATENATED ITEM Line 1 ITEM 100 1 TAX Line 2 TAX 10 1 Y A B C D

99-999-9999

After the Payables Import Process completes, the following number of rows should be inserted in the main tables. Table Name AP_INVOICE_LINES_ALL AP_INVOICE_DISTRIBUTIONS_ALL Number of ITEM rows inserted 1 1 Number of TAX rows inserted 1 2

Use Case 3: Exclusive Manual Tax Applicable to All Item Lines

Example: An invoice with two ITEM lines of 100 USD and 50 USD and one TAX line (manual and exclusive) of 15 USD.
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Populate data in AP_INVOICE_LINES_INTERFACE as below: Interface Column Name LINE_NUMBER LINE_TYPE_LOOKUP_CODE AMOUNT LINE_GROUP_NUMBER PRORATE_ACROSS_FLAG TAX_REGIME_CODE TAX TAX_STATUS_CODE TAX_RATE_CODE DIST_CODE_CONCATENATED ITEM Line1 1 ITEM 100 1 ITEM Line2 2 ITEM 50 1 TAX Line 3 TAX 15 1 Y A B C D

99-999-9999

88-888-8888

After the Payables Import Process completes, the following number of rows should be inserted in the main tables. Table Name AP_INVOICE_LINES_ALL AP_INVOICE_DISTRIBUTIONS_ALL Number of ITEM rows inserted 2 2 Number of TAX rows inserted 1 4

Use Case 4: Exclusive Manual Tax Line Not Applicable to All Item Lines
Example: An invoice with three ITEM lines of 200 USD, 100 USD and 50 USD and one TAX line (manual and exclusive) of 30 USD. The TAX is applicable to only two ITEM lines of 200 USD and 100 USD. Populate data in AP_INVOICE_LINES_INTERFACE as below: Interface Column Name LINE_NUMBER LINE_TYPE_LOOKUP_CODE AMOUNT LINE_GROUP_NUMBER PRORATE_ACROSS_FLAG TAX_REGIME_CODE TAX TAX_STATUS_CODE TAX_RATE_CODE DIST_CODE_CONCATENATED ITEM Line1 1 ITEM 200 1 ITEM Line2 2 ITEM 100 1 ITEM Line3 3 ITEM 50 TAX Line 4 TAX 30 1 Y A B C D

99-999-9999

88-888-8888

77-777-7777

After the Payables Import Process completes, the following number of rows should be inserted in the main tables. Table Name AP_INVOICE_LINES_ALL AP_INVOICE_DISTRIBUTIONS_ALL Number of ITEM rows inserted 3 3 Number of TAX rows inserted 1 4

Use Case 5: Multiple Exclusive and Manual Tax Lines

Example. An invoice with two ITEM lines of 100 USD and 50 USD and two TAX lines (manual and exclusive)

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Populate data in AP_INVOICE_LINES_INTERFACE as below: Interface Column Name LINE_NUMBER LINE_TYPE_LOOKUP_CODE AMOUNT LINE_GROUP_NUMBER PRORATE_ACROSS_FLAG TAX_REGIME_CODE TAX TAX_STATUS_CODE TAX_RATE_CODE DIST_CODE_CONCATENATED ITEM Line1 1 ITEM 100 1 ITEM Line2 2 ITEM 50 2 TAX Line1 3 TAX 10 1 Y P Q R S TAX Line2 4 TAX 5 2 Y A B C D

99-999-9999

88-888-8888

After the Payables Import Process completes, the following number of rows should be inserted in the main tables. Table Name AP_INVOICE_LINES_ALL AP_INVOICE_DISTRIBUTIONS_ALL Number of ITEM rows inserted 2 2 Number of TAX rows inserted 2 4

Use Case 6: Multiple Exclusive and Manual Tax Lines, Not All Lines have Tax
Example: An invoice with four ITEM lines of 200USD, 150USD, 100 USD and 50 USD and two TAX lines (manual and exclusive). ITEM line of 200USD AND 150USD are associated with TAX line having TAX RATE CODE D and ITEM line of 100 USD is associated with TAX RATE CODE OF S. ITEM line of 50 USD does not have any tax associated with it Populate data in AP_INVOICE_LINES_INTERFACE as below: Interface Column Name LINE_NUMBER LINE_TYPE_LOOKUP_CODE AMOUNT LINE_GROUP_NUMBER PRORATE_ACROSS_FLAG TAX_REGIME_CODE TAX TAX_STATUS_CODE TAX_RATE_CODE DIST_CODE_CONCATENATED ITEM Line1 1 ITEM 200 1 ITEM Line2 2 ITEM 150 1 ITEM Line3 3 ITEM 100 2 ITEM Line4 4 ITEM 50 TAX Line1 5 TAX 10 2 Y P Q R S TAX Line2 6 TAX 35 1 Y A B C D

99-9999999

88-8888888

77-7777777

66-6666666

After the Payables Import Process completes, the following number of rows should be inserted in the main tables. Table Name AP_INVOICE_LINES_ALL AP_INVOICE_DISTRIBUTIONS_ALL Number of ITEM rows inserted 4 4 Number of TAX rows inserted 2 6

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Use Case 7: Multiple Exclusive and Manual Tax Lines, One Tax Line Prorated Across Many Lines
Example: An invoice with four ITEM lines of 200 USD, 150 USD, 100 USD and 50 USD and two TAX lines (manual and exclusive). The ITEM line of 100 USD is associated with TAX line having TAX RATE CODE S and TAX line with TAX RATE CODE with D will be prorated across all the four ITEM lines Populate data in AP_INVOICE_LINES_INTERFACE as below: Interface Column Name LINE_NUMBER LINE_TYPE_LOOKUP_CODE AMOUNT LINE_GROUP_NUMBER PRORATE_ACROSS_FLAG TAX_REGIME_CODE TAX TAX_STATUS_CODE TAX_RATE_CODE DIST_CODE_CONCATENATED ITEM Line1 1 ITEM 200 ITEM Line2 2 ITEM 150 ITEM Line3 3 ITEM 100 1 ITEM Line4 4 ITEM 50 TAX Line1 5 TAX 10 1 Y P Q R S TAX Line2 6 TAX 50 Y A B C D

99-9999999

88-8888888

77-7777777

66-6666666

After the Payables Import Process completes, the following number of rows should be inserted in the main tables. Table Name AP_INVOICE_LINES_ALL AP_INVOICE_DISTRIBUTIONS_ALL Number of ITEM rows inserted 4 4 Number of TAX rows inserted 2 10

Use Case 8: Multiple Exclusive and Manual Tax Lines, Same Regime to Rate Information
Example: An invoice with two ITEM lines of 100 USD and 50 USD and two TAX lines (manual and exclusive) but with same Regime to Rate information. Populate data in AP_INVOICE_LINES_INTERFACE as below: Interface Column Name LINE_NUMBER LINE_TYPE_LOOKUP_CODE AMOUNT LINE_GROUP_NUMBER PRORATE_ACROSS_FLAG TAX_REGIME_CODE TAX TAX_STATUS_CODE TAX_RATE_CODE DIST_CODE_CONCATENATED ITEM Line1 1 ITEM 100 1 ITEM Line2 2 ITEM 50 2 TAX Line1 3 TAX 10 1 Y A B C D TAX Line2 4 TAX 5 2 Y A B C D

99-999-9999

88-888-8888

After the Payables Import Process completes, when tax is calculated either by clicking on Calculate Tax button or during invoice validation two TAX lines imported will be merged to single tax line and only one row will be inserted into AP_INVOICE_LINES_ALL. Table Name AP_INVOICE_LINES_ALL Number of ITEM rows inserted 2 Number of TAX rows inserted 1
9

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AP_INVOICE_DISTRIBUTIONS_ALL

Use Case 9: Inclusive Manual Tax

Example: An invoice with one ITEM line of 100 USD and one TAX line (manual and inclusive) of 10 USD. Set the INCL_IN_TAXABLE_LINE_FLAG to Y for Tax line and Populate data in the AP_INVOICE_LINES_INTERFACE as below: Interface Column Name LINE_NUMBER LINE_TYPE_LOOKUP_CODE AMOUNT LINE_GROUP_NUMBER PRORATE_ACROSS_FLAG TAX_REGIME_CODE TAX TAX_STATUS_CODE TAX_RATE_CODE DIST_CODE_CONCATENATED INCL_IN_TAXABLE_LINE_FLAG ITEM Line 1 ITEM 100 1 TAX Line 2 TAX 10 1 Y A B C D Y

99-999-9999

After the Payables Import Process completes, there will be no TAX line inserted for inclusive tax in AP_INVOICE_LINES_ALL and this tax is not visible in Invoice lines region of Invoice workbench. Inclusive tax details can be viewed in Tax Summary and Tax Detail window. Distributions corresponding to the Inclusive tax can be viewed in Invoice Distributions window. Table Name AP_INVOICE_LINES_ALL AP_INVOICE_DISTRIBUTIONS_ALL Number of ITEM rows inserted 1 1 Number of TAX rows inserted 0 2

Use Case 10: Inclusive Manual Tax Line Applicable to All Lines
Example: An invoice with two ITEM lines of 100 USD and 50 USD and one TAX line (manual and inclusive) of 15 USD Set the INCL_IN_TAXABLE_LINE_FLAG to Y for the tax line and populate the data in the AP_INVOICE_LINES_INTERFACE as below: Interface Column Name LINE_NUMBER LINE_TYPE_LOOKUP_CODE AMOUNT LINE_GROUP_NUMBER PRORATE_ACROSS_FLAG TAX_REGIME_CODE TAX TAX_STATUS_CODE TAX_RATE_CODE DIST_CODE_CONCATENATED INCL_IN_TAXABLE_LINE_FLAG ITEM Line1 1 ITEM 100 1 ITEM Line2 2 ITEM 50 1 TAX Line 3 TAX 15 1 Y A B C D Y

99-999-9999

88-888-8888

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10

After the Payables Import Process completes, there will be no TAX line inserted for inclusive tax in AP_INVOICE_LINES_ALL and this tax is not visible in Invoice lines region of Invoice workbench. Inclusive tax details can be viewed in Tax Summary and Tax Detail window. Proration of tax amount for each ITEM line details can be viewed from Tax Detail window. Distributions corresponding to the Inclusive tax can be viewed in Invoice Distributions window. Table Name AP_INVOICE_LINES_ALL AP_INVOICE_DISTRIBUTIONS_ALL Number of ITEM rows inserted 2 2 Number of TAX rows inserted 0 4

Use Case 11: Multiple Inclusive and Manual Tax Lines

Example: AN invoice with two ITEM lines of 100 USD and 50 USD and two TAX lines (manual and inclusive) Set the INCL_IN_TAXABLE_LINE_FLAG to Y for the TAX line1 and populate data in AP_INVOICE_LINES_INTERFACE as below: Interface Column Name LINE_NUMBER LINE_TYPE_LOOKUP_CODE AMOUNT LINE_GROUP_NUMBER PRORATE_ACROSS_FLAG TAX_REGIME_CODE TAX TAX_STATUS_CODE TAX_RATE_CODE DIST_CODE_CONCATENATED INCL_IN_TAXABLE_LINE_FLAG ITEM Line1 1 ITEM 100 1 ITEM Line2 2 ITEM 50 2 TAX Line1 3 TAX 10 1 Y P Q R S Y TAX Line2 4 TAX 5 2 Y A B C D

99-999-9999

88-888-8888

After the Payables Import Process completes, there will be no TAX line inserted for inclusive tax (TAX Line1) in AP_INVOICE_LINES_ALL and this tax is not visible in Invoice lines region of Invoice workbench. Inclusive tax details can be viewed in Tax Summary and Tax Details window. Distributions corresponding to the Inclusive tax can be viewed in Invoice Distributions window. Table Name AP_INVOICE_LINES_ALL AP_INVOICE_DISTRIBUTIONS_ALL Number of ITEM rows inserted 2 2 Number of TAX rows inserted 1 4

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Information Sources

Oracle Payables Reference Guide, Release 12, Part No. B25455-03

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