eBTax Exploration Series #1

Automate Tax Determination before AR and

Drive Tax from Order Management
Session ID #10032:

This session is part 1 of 5

and is delivered as part of the
eBTax Exploration Series.

Prepared by:
Mr A.Bohnet
Oracle R12 and Fusion eBTax Senior Consultant
eBiz Answers Ltd
@ebizanswers

REMINDER
Check in on the COLLABORATE
mobile app

AGENDA
Introduction

About the Presenter

Company Information
Collaborative SIG
Tax Management SIG

Overview eBTax Exploration Series

Depot Repair Always a service
Bonded Warehouse
Transaction Types
Thank You

INTRODUCTION:

ABOUT THE PRESENTER

Andrew Bohnet

Oracle R12 and Fusion eBTax Senior Consultant

Founder and Director of eBiz Answers Ltd
OAUG Chair forOracle Tax Management SIG
18 years Oracle Financials 8yrs on global R12 projects
Currently assists clients in configuring eBTax to meet
requirements
Performing eBTax System Audits to eliminate VAT
non-compliance
Developed eBTax Rapid Install
Roll out 30 countries in 2 hours

INTRODUCTION:

COMPANY INFORMATION

Only specialist Oracle R12 and Fusion Tax

Consultancy globally
Provides an end-to-end experience:

Consultation
Design
Integration
Implementation

We always deliver

Training
Reporting
Support
System Auditing

INTRODUCTION:

COLLABORATIVE SIG
Since 2011 the Special Interest Groups have collaborated on
joint presentations focused on a single threaded topic to allow
conference attendees to participate in end-to-end business
scenarios designed to stimulate conversation and educate
end users.
The Collaborative SIG is coordinated by:
Mohan Iyer (mohan@fscpsolutions.com) of the General Ledger SIG
Han Kolbe (hanskolbe@celantrasystems.com) of the Multi-National SIG
Thomas Simkiss (Tsimkiss@BizTech.com) of the Multi-National SIG
Special thanks to Melissa Sider (MSider@astcorporation.com) for assisting
with coordination on this collaboration.

INTRODUCTION:

TAX MANAGEMENT SIG

The Oracle Tax management SIG (formerly known as the
Oracle E-Business Tax and Fusion Tax SIG) are a key
component of the Oracle E-Business Suite and Oracle Fusion
respectively. The products have many unique features, and
boast a flexibility rarely seen in a tax compliance package.
Members of this Special Interest Group (SIG), are expected to
weigh in on both the benefits of and issues encountered with
using eBTax / Fusion Tax to solve transaction based tax
compliance problems in daily transaction processing.
The Tax Management SIG is coordinated by:
Andrew Bohnet (andrew@ebizanswers.net) Co-chair of the Tax Management SIG
Paul Kirch (paul_kirch@yahoo.com) Co-chair of the Tax Management SIG
Angie FauntLeRoy (angie.fauntleroy@thomsonreuters.com) Education Chair

INTRODUCTION:

COLLABORATIVE SIG PRESENTERS

Presenter

Company

About the Presenter

Andrew
Bohnet

eBiz Answers

Andrew is a Principal at eBiz Answers Ltd,

and a leading light in Oracle E-Business Tax
implementation and upgrade in the EMEA
region. He has been the SIG's EU Region
Education Chair since 2012 and became the
Tax Management SIG co-chair in 2014.

Dev Singh

KPMG

Dev is a Manager within KPMGs Canadian

Indirect Tax Practice focusing on Tax Process
and Technology. Dev has lead the e-Business
Tax stream for many Financial Transformation
projects including an implementation for one
of North Americas leading retailers.

Paul Kirch

Paul Kirch,
Inc.

Co-Chair of the Tax Management SIG, Paul

Kirch specializes in global implementation of
Oracle R12 & Fusion. Whilst Practice
Manager at Oracle, he headed project teams
of 50+ with budgets of $20 million+ and
frequently presented at OAUG and OOW.

INTRODUCTION:

COLLABORATIVE SIG PRESENTERS

Presenter

Company

About the Presenter

Jay
Chandran

Paul Kirch,
Inc.

Jay Chandran has over 17 years experience

in the fields of Finance, Accounting, Business
Process Re-engineering and ERP. Founder
and Director of Simplex Data Technologies in
California, Jay has held senior positions in
Oracle eBusiness Suite Consulting.

Ashish
Nagarkar

AST
Corporation

Mr. Ashish Nagarkar is a PMP & Oracle

Certified Implementer with over twelve years
of systems experience with ERP and software
projects. His functional expertise spans across
Procure-to-Pay, iExpense and E-business tax
and most of the Oracle Financial Suite.

Charles
Bauman

BizTech

Chuck is a Senior Business Analyst and

Project Manager at Biztech with over 20 years
of Corporate Accounting and Oracle
Financials and Supply Chain Management
experience. He has completed over 15 R12
eBusiness Tax implementations.

OVERVIEW:

eBTAX EXPLORATION SERIES

Session ID

Session

Date & Time

# 10032

eBTax Series #1: Automate Tax

Determination before AR and Drive
Tax from Order Management

13 April 2015
Breakers L
10:30-11:30 AM

# 10033

eBTax Series #2: eBTax and the

Procure-to-Pay Process

13 April 2015
12:45-1:45 PM

Breakers L

# 10034

eBTax Series #3: Intercompany

Transactions and Tax

13 April 2015
2:00-3:00 PM

Breakers L

# 10035

eBTax Series #4: Integration and

Upgrades with eBTax

13 April 2015
3:15-4:15 PM

Breakers L

# 10036

eBTax Series #5: Tax Configuration

and Q&A

13 April 2015
4:30-5:30 PM

Breakers L

Room

If there is a specific topic or area youd like to see covered, please reach out to your
SIG or chapter lead with ideas for future sessions.

Depot Repair
Always a service

Client Requirement
Client sold and installed weather measuring equipment.
If an item failed, a support engineer would go to the site
to make the repair.
They would take existing stock items which they would
charge the client.
Under the EU VAT laws, they had to charge the entire
transaction as a service.

The Issue

Thought they were going to have

to duplicate all items so one was
flagged as a Service and the other
as Goods!

So how did we resolve the issue?

By defaulting a dummy tax code

onto every order coming from the
Depot Repair Module.

Resolving the Issue

Resolving the Issue

Resolving the Issue

Resolving the Issue

Resolving the Issue

Resolving the Issue

Resolving the Issue

Resolving the Issue

Bonded Warehouse:

What is a Customs bonded warehouse?

A Customs bonded warehouse is a building or
other secured area in which imported dutiable
merchandise may be stored, manipulated, or
undergo manufacturing operations without
payment of duty for up to 5 years from the date
of importation.

Bonded Product

Bonded Product
We have a pile of coal in a bonded yard.

Bonded Product
30% has been custom cleared, the remaining 70%
remains in a bonded state.

Bonded Product

When we make a sale of either bonded or non-bonded product, the tax rates
determined would be very different.
Example:
Ship From (location of Coal) is NL
Ship To customer is in Germany
If we sell coal that has been customs cleared and in free circulation of the EU
then we would charge a 0% NL EU SALES GOODS rate.
If the Coal has not been customs cleared and remains in a bonded state, then we
still charge a 0% tax but this time it is out of scope of NL VAT.

But to the customer, the difference is huge. In scenario 1 above, the DE customer
would have to apply a reverse charge against the purchase. If they are VAT
registered then this usually means no tax is effectively paid.

But if they are buying bonded stock, then they are liable for the import duties at 19%!
If you as a supplier accidently charge the EU VAT and have not cleared the stock
then you have committed VAT fraud and are liable for the VAT due.

Issues
Oracle does not provide standard functionality for this.
Oracle has no functionality to recognise products in a
bonded state.
Cannot use items as a way of dividing as an item can
change state from bonded to customs cleared at any point.
The tax engine can not use a DFF as a determining factor.

Solution
We split the pile of coal in the Oracle system into two separate
locators.
And using the DFF of the locator that has the bonded coal, we
store a value of BONDED.
When the order line is created with the appropriate stock chosen,
a trigger will check the DFF of the inventory locator.
If it is BONDED, it will copy this value into the tax classification
code field (we would have created a dummy tax rate called
BONDED).
Then we can incorporate this determining factor into our tax rules.

Solution
If Ship from = NL
And Ship to = EU
And Tax Classification code = BONDED
Then charge NL EXPORT
If Ship from = NL
And Ship to = EU
And Tax Classification code = NULL
Then charge NL EU SALES GOODS

Benefits of Customisation
Configuration
Primarily uses Oracle standard functionality.
Easy to replicate and non-dependant setup.

Development
Enhancement rather than customisation.
Simplest solution, making it easy to create.

Maintenance
Extremely unlikely to be affected by patches.
Tax module can be used to change rules.

Transaction Types:

Transaction Types

THANK YOU FOR YOUR ATTENTION

This session is part 1 of 5 in the eBTax Explora,on Series.
The next presenta1on in this series is:

eBTax and the Procure-to-Pay Process

Presented by Dev Singh @ 12:45 13:45
For more information on the eBTax Management SIG, please visit:
http://www.ebstaxsig.oaug.org / eBTax Management SIG LinkedIn

Special Thank You to:

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