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R12: AP: Prepayment Tax is Over-Applied when Tax Rounding Rule is Up (Doc ID 2629148.1)

Last updated on SEPTEMBER 22, 2020

Applies to:

Oracle Payables - Version 12.2.7 and later
Information in this document applies to any platform.

Goal

Prepayment tax is over-applied when supplier site's tax rounding rule is "UP".
*Applied Amount Handling of ZX_TAXES_B was set to Prorated(P).

(ERROR CASE)
1.Create a prepayment with tax 8%. tax rounding rule is "UP".
   PREPAYMENT   ITEM:1000   TAX:80

2.Create 4 standard invoices with tax 8%. tax rounding rule is "UP".
   INVOICE 1    ITEM: 333   TAX:27
   INVOICE 2    ITEM: 333   TAX:27
   INVOICE 3    ITEM: 333   TAX:27
   INVOICE 4    ITEM:    1    TAX: 1

3. Apply the prepayment to above invoices.
   INVOICE 1    ITEM: 333   TAX:27   APPLIED ITEM: -333   APPLIED TAX: -27
   INVOICE 2    ITEM: 333   TAX:27   APPLIED ITEM: -333   APPLIED TAX: -27
   INVOICE 3    ITEM: 333   TAX:27   APPLIED ITEM: -333   APPLIED TAX: -27
   INVOICE 4    ITEM:   1    TAX: 1    APPLIED ITEM: -333   APPLIED TAX:   -1
   -----------------------------------------------------------------------------------
   TOTAL        ITEM:1000   TAX:82   APPLIED ITEM:-1000   APPLIED TAX: -82

Then, applied tax amount will be over-applied like above.
Usually, applied tax amount is adjusted at the final application as follows:

(NORMAL CASE)
1.Create a prepayment with tax 8%. tax rounding rule is "UP".
   PREPAYMENT   ITEM:1000   TAX:80

2.Create 3 standard invoices with tax 8%. tax rounding rule is "UP".
   INVOICE 1    ITEM: 333   TAX:27
   INVOICE 2    ITEM: 333   TAX:27
   INVOICE 3    ITEM: 334   TAX:27

3. Apply the prepayment to above invoices.
   INVOICE 1    ITEM: 333   TAX:27   APPLIED ITEM: -333   APPLIED TAX: -27
   INVOICE 2    ITEM: 333   TAX:27   APPLIED ITEM: -333   APPLIED TAX: -27
   INVOICE 3    ITEM: 334   TAX:27   APPLIED ITEM: -334   APPLIED TAX: -26(*)
   -----------------------------------------------------------------------
   TOTAL        ITEM:1000   TAX:81   APPLIED ITEM:-1000   APPLIED TAX: -80

   (*)applied tax amount is adjusted at the final application.

However, the above (ERROR CASE) does not adjusted the applied tax amount.
And then, GL journals are not balanced because applied tax total do not match the prepayment tax amount.

Solution

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In this Document
Goal
Solution
References


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