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Regime Precedence and Compounding Tax Functionality Not Working for Tax Regimes Associated with Different Countries (Doc ID 2769002.1)

Last updated on APRIL 15, 2021

Applies to:

Oracle E-Business Tax - Version 12.1 and later
Information in this document applies to any platform.

Goal

Tax Regime Precedence and Compounding Tax functionality does not work correctly if two Tax Regimes are associated to two different countries.

Receivable invoice list two Tax Regimes (and Taxes) in the Tax Lines. Below is the resultant behavior:
a. The tax line for lower Tax Regime precedence is not appearing first which is not correct.
b. The compounding tax functionality is not working. The system did not consider the Tax Formula and calculated tax amounts for both these taxes as if these are independent taxes.

The regime precedence and compounding tax functionality works properly if different Tax Regimes are associated with the same country. 

Example:
=========
Receivable Invoice Number 38849 where below two tax lines are populated.
Tax Regime = CA GST AND HST associated to country - CA (Canada) with Tax - CA Tax
Tax Regime = BHARAT associated to country - US (United States) with Tax - BHARAT Tax


Relevant Tax Setup
============
A. Tax Regime setup:
Responsibility: Tax Manager
Navigation: Tax Configuration > Tax Regimes

1. Query the Tax Regime
2. Go to Compounding Level Controls region
3. Select the 'Allow Cross Regime Compounding' and specify the value

Tax Regime = BHARAT has regime precedence is 1
Tax Regime = CA GST AND HST value is 3

B. Tax setup:
Responsibility: Tax Manager
Navigation: Tax Configuration > Taxes

1. Query the Tax
2. Specify value in the field 'Compounding Precedence'.

Tax Precedence set for Tax = BHARAT Tax is 1
Tax Precedence set for Tax = CA Tax is set is 2.

C. Specify the Tax Formula between both these Taxes using below navigation:
Responsibility: Tax Manager
Navigation: Advanced Setup Options > Tax Formulas

D. Specify the Tax Rule using above created Tax Formula for Rule Type = Determine Taxable Basis
Responsibility: Tax Manager
Navigation: Tax Configuration > Tax Rules

E. RESULTS:

1. Create a manual sales invoice in AR Transactions Form using below navigation:
Responsibility: Receivables
Navigation: Transactions > Transactions

2. Check the tax calculation behavior for the sales invoice. 


 

Solution

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In this Document
Goal
Solution
References


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