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Case Study: Setup R12 E-Business Tax (EBTax) for Canada: Includes 2010 HST Changes (Doc ID 577996.1)

Last updated on NOVEMBER 30, 2020

Applies to:

Oracle Purchasing - Version 12.0 and later
Oracle Payables - Version 12.0.0 and later
Oracle E-Business Tax - Version 12.0 and later
Oracle Order Management - Version 12 and later
Oracle Receivables - Version 12.0.0 and later
Information in this document applies to any platform.

Purpose

In Release 12, Oracle introduced E-Business Tax as the new tax calculation engine for the Order to Cash and Procure to Pay business flows. Each of these modules proprietary tax engines from earlier releases were discontinued in favor of this new solution. (Latin Tax Engine, Golden Tax Adaptor and the India Globalization still exist)

This White Paper documents how a simplified implementation might be performed for a customer using E-business Tax for Canada in Release 12.  This is a living document and we encourage readers to post input, ask questions or share best practices on our community thread for Canada Tax Setup. 

This Note includes changes reflective of HST adoption by British Columbia (BC) and Ontario (ON) scheduled to take effect July 1, 2010.  Also added to this note are the Nova Scotia HST rate increases (added June 21, 2010)

This white paper combines, extends and superseeds the following:
1)  Oracle E-Business Tax Configuration Library (CLIC) Note 463001.1
2)  Oracle E-Business Tax Implementation Guide  Chapter 4: Canadian Sales Tax
3)  White Paper titled: Integrating Oracle E-Business Tax With Oracle Receivables and Oracle  Payables For Country Canada Release 12  (this document is no longer available for viewing on My Oracle Support)

Scope

This note was written in a case study format using Canada as the example.  It assumes that you have an existing implementation and that you are adding a new country, Canada, to your configuration.

Section 3 begins the case study with some mandatory setup steps.  You should refer to the Financials Implementation Guide along with your module specific implementation documentation as appropriate for your implementation.  The steps documented in this section do cover mandatory setups for modules impacted by E-Business Tax.  Each section also attempts to document the tax implications of options you might select when performing the step.

Section 4  begins the tax specific setups.  In this section we walk you through the basic setup of your tax system.  This section focuses on what E-Business tax calls the "Regime to Rate" flow where you identify the taxes that should be assessed.  Also covered are the default settings used by the rule engine to determine if a tax should be charged and if yes, how to calculate and record the tax. 

Section 5 covers some of the more common business requirements applicable to this case study.  In this section we explain in non-specific terms the general requirement that needs to be satisfied and provide references whenever possible to the origin of the requirement.  We then provide a link to a note that provides in-depth examples, screenshots and video of how to configure a system to satisfy the requirement.   Please note that these reference documents are not all specific to this case study but rather are intended to convey examples of how the requirement might be satisfied.

Additional sections and content will be added to focus on Testing the solution and reporting.  The intent of this Case Study is to help a new or existing user of E-Business Tax to understand concepts and setup that may otherwise be dispersed across numerous implementation and user manuals.  It also attempts to show how you can comply with some general business requirements, thereby allowing you to focus on the less common requirements unique to your specific organization.  We hope that this enables you to streamline your project to reduce the time/cost of the effort and raise the value realized by your business from E-Business Tax.

Details

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In this Document
Purpose
Scope
Details
 Case Study: Setup R12 E-Business Tax (EBTax) for Canada: Includes 2010 HST Changes
 1.  Introduction
 2.  If You Are Using an Upgraded Environment....
     a.  HST Setup:
     b Tax Groups: 
 3.  Pre-Requisite Setup
     a. Setup Geography Hierarchy Structure & Details
     b. Define Tax & Geography Validation
     c. Setup a Legal Entity, Establishment, Ledger and Operating Unit
     d. Associate the Operating Unit with the Legal Establishment
     e. Replicate Seed Data
     f. Setup Responsibilities for the New Operating Unit
     g. Setup Mandatory Responsibility Level Profile Options
     h. Setup Item Validation Organization For The Operating Unit
     i.  Setup a Freight Inventory Item
     j.  Setup Tax and TCA Profile Options
     k. Setup Receivables System Options
     l. Setup Receivables AutoAccounting
     m. Setup Receivables Transaction Types
     n. Setup Transaction Sources
     o. Initialize Operating Unit Party Tax Profile
     p. Setup Receivables Activity Types
     q. Setup Banks, Branches and Accounts
     r. Setup Receivables Receipt Class & Payment Method
     s. Setup Approval Limits
     t. Run Geography Name Referencing Program
 (Back to top)
 4 Tax Setup
     a. Define Regimes
     b.  Define Taxes
     c. Define Tax Statuses
     d. Define Tax Jurisdictions
     e. Define Tax Recovery Rates
     f.  Define Tax Rates
     g. Define the Party Tax Profile for Legal Entity & Operating Unit
     h. Setup Default Tax Rules
     i.  Make Tax Available For Transactions
     j. Perform a Baseline Test in AR
     k. Perform a Baseline Test in AP
 5. Tax Setup:  Tax Setup For Common Scenarios
     a. Adjusting the Taxable Basis for Quebec and Prince Edward Island
     b. Zero Rated Items for Export
     c. Applying Tax to Freight
     d.  Self-Assessed Taxes
     e. Reporting By Tax Authority
     f. Charging Different Tax Accounts For Each Tax
     g. Setting up Tax recovery for ITC and Rebates
 6 Testing Your Tax Configuration
     a. Receivables
     b. Payables
 Community Discussion
References

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