Oracle Payables Integration with E-Business Tax

Payables Integration / EBTax Overview

Payables integrates with E-Business Tax, a common tax engine used across applications to calculate taxes and generate tax distributions. E-Business Tax can be setup in the following ways. Rule Based Applicability An example is taxes are automatically calculated based on the location. Tax Classification Code (Backward Compatibility) User manually enters the tax code or have it defaulted on the invoice line to calculate taxes.

Rule Based Applicability

The tax engine uses all the relevant attributes on the invoice header and lines to determine what taxes are applicable. This set of attributes are referred to as the tax determination factors. Some of the key attributes are listed here. Invoice Header Taxation Country Legal Entity Invoice Lines Ship To Location Product Type Product Category

Tax Event Classes

Payables has seeded the following event classes in E-Business Tax. The deploying company could configure rules so that tax handling could be different for each of these documents. Standard Invoices Includes Standard, Credit Memo, Debit Memo, Mixed Invoices. Prepayment Invoices Expense Reports
These can be updated using Tax Administrator Responsibility. Navigation: Defaults and Controls Configuration Owner Tax Options

Inclusive/Exclusive Taxes
E-Business Tax will determine if a given tax is inclusive or exclusive. In case of exclusive taxes, Payables will create a separate invoice tax line. For inclusive taxes, the item line will be updated to indicate it has included tax amounts. Exceptions PO matched invoices: Taxes are always exclusive Expense Reports: Taxes are always inclusive

Data Model

Self Assessed Taxes

With E-Business Tax, rules will be applied to transaction data to determine what tax is due and what was actually charged by the supplier. Any taxes that are not charged by the supplier can be automatically generated as self assessed. An example is Oracle procuring from Dell. They are based in Texas where there is no sales tax. But, Oracle is liable to pay IRS the sales tax. E-Business Tax can be configured to compute the tax as selfassessed for the invoices from Dell. Self Assessed Tax Lines are not stored in AP. SA Tax Distributions are stored in ap_self_assessed_tax_dist_all. These are primarily used for accounting.

Manual Tax Lines

Manual entry of tax lines in the invoice lines region is supported in limited scenarios. Taxes are exclusive Invoice has not gone through tax calculation or invoice validation Tax Regime, Tax, Status and Tax Rate are mandatory. Alternately, user can enter a Tax Classification Code on a tax line and rest of the attributes regime, tax, status and tax rate are defaulted. After the invoice is validated or has tax calculated, user needs to enter a manual tax line from the tax details window.

Invoice Import
Prior to R12, Invoice Import only defaulted the tax codes onto the invoice lines. There was no tax calculation. In R12, tax can be calculated during import. This is controlled by column calc_tax_during_import_flag in ap_invoices_interface. Setting column add_tax_to_inv_amt_flag to Y, will update the invoice amount with the calculated tax amount. This is set so that validation will not apply a line variance hold on the imported invoice. Manual Tax Lines can be imported into AP. The required tax attributes like the regime, tax, status and the tax rate are required. Manual Tax Lines can be allocated to specific Item lines during invoice import. Columns prorate_across_all_items and line_group_number are used for allocations.

Tax Variance
Tax Variance distributions are generated for invoices matched to PO or Receipt. The following tax variance distributions are created in R12. TRV Tax Rate Variance TIPV Tax Invoice Price Variance TERV Tax Exchange Rate Variance E-Business Tax only creates Recoverable and Non Recoverable Tax
Distributions. It stores tax variance determining attributes on the NonRecoverable tax distribution.

AP uses these attributes to further split the Non-Recoverable Tax distribution into
the respective variance distributions if there is a tax variance. column invoice_price_variance.

In 11i, there were no separate tax variance distributions. Variance was stored in

Prepayment Application
Exclusive Taxes

When tax is exclusive, Tax lines will not be presented to the user in the Apply/Un-apply Prepayments window. Taxes are calculated during prepayment application.

Inclusive Taxes
When users are applying prepayments, the included tax amount is displayed on the window. It will appear as if we are applying the taxes as well. However, behind the scenes, E-Business Tax will actually do the calculation. The calculation mode is setup in E-Business Tax at the tax level. (Applied Amount Handling) When a non-recoverable tax distribution is fetched from E-Business Tax that has a difference between the amount and the prorated amount, the distribution created by Payables will have a non-zero value (amount minus Prorated amount) populated in prepay_tax_diff_amount.

Tax Detail Windows

Payables will provide links to three E-Business Tax windows.
Summary Tax Lines From Invoice Header Detail Tax Lines From Invoice Lines Tax Distributions From Invoice Distributions

The tax windows are owned by E-Business Tax and built on top of the tax repository. Any changes to data made in these windows will be directly stored in the tax repository. Payables does not control the data manipulation in these windows. Every time changes happen through these windows, Payables will synchronize its data with the tax repository and will refresh the Invoice window to show the most current data.

Key E-Business Tax Objects

Tables Transaction Data zx_lines_det_factors Summary Tax Lines zx_lines_summary Detail Tax Lines zx_lines Tax Distributions zx_rec_nrec_dist Forms Tax Windows - $ZX_TOP/forms/US/ZXTRLLINEDISTUI.fmb
We have four object groups that are sub-classed from this form. ZX_TRX_LINE_STAT_OG ZX_LINES_OBJECT_GROUP ZX_DISTRIBUTIONS_OG ZX_TRX_DIST_STAT_OBJECT_GROUP Do not delete and recreate ZX_TRX_LINE_STAT_OG and ZX_TRX_DIST_STAT_OBJECT_GROUP. The program units in these are "stubs" from ZX. We have coded AP specific logic in the invoice workbench after sub-classing. If you delete and recreate we loose our custom logic.

Troubleshooting
Tax Calculation Errors For troubleshooting or filing a bug, enable statement level fnd logging, reproduce
the issue and provide data from fnd_log_messages. This will give a good picture of the code path and the failure location.

Tax Details Window issues E-Business Tax team owns Tax Lines and the Distributions window. The UI
objects are sub-classed in the Invoice Workbench. Any issues here need to be handled by E-Business Tax team.

Product ID: 1087

Invoice Flow