Oracle E-Business Suite R12.1 Accounts Payables Partner Boot Camp Training Courseware Part VIII – Transaction Taxes in Payables

-2- For Oracle employees and authorized partners only. Do not distribute to third parties. © 2009 Oracle Corporation – Proprietary and Confidential For Oracle employees and authorized partners only. Do not distribute to third parties. © 2009 Oracle Corporation – Proprietary and Confidential The following is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making purchasing decisions. The development, release, and timing of any features or functionality described for Oracle’s products remains at the sole discretion of Oracle. Safe Harbor Statement

-3- For Oracle employees and authorized partners only. Do not distribute to third parties. © 2009 Oracle Corporation – Proprietary and Confidential For Oracle employees and authorized partners only. Do not distribute to third parties. © 2009 Oracle Corporation – Proprietary and Confidential Use of this Site (“Site”) or Materials constitutes agreement with the following terms and conditions: 1. Oracle Corporation (“Oracle”) is pleased to allow its business partner (“Partner”) to download and copy the information, documents, and the online training courses (collectively, “Materials") found on this Site. The use of the Materials is restricted to the non-commercial, internal training of the Partner’s employees only. The Materials may not be used for training, promotion, or sales to customers or other partners or third parties. 2. All the Materials are trademarks of Oracle and are proprietary information of Oracle. Partner or other third party at no time has any right to resell, redistribute or create derivative works from the Materials. 3. Oracle disclaims any warranties or representations as to the accuracy or completeness of any Materials. Materials are provided "as is" without warranty of any kind, either express or implied, including without limitation warranties of merchantability, fitness for a particular purpose, and non- infringement. 4. Under no circumstances shall Oracle or the Oracle Authorized Delivery Partner be liable for any loss, damage, liability or expense incurred or suffered which is claimed to have resulted from use of this Site of Materials. As a condition of use of the Materials, Partner agrees to indemnify Oracle from and against any and all actions, claims, losses, damages, liabilities and expenses (including reasonable attorneys' fees) arising out of Partner’s use of the Materials. 5. Reference materials including but not limited to those identified in the Boot Camp manifest can not be redistributed in any format without Oracle written consent. Oracle Training Materials – Usage Agreement

-4- For Oracle employees and authorized partners only. Do not distribute to third parties. © 2009 Oracle Corporation – Proprietary and Confidential Key Content Contributors Contributing Companies

-5- For Oracle employees and authorized partners only. Do not distribute to third parties. © 2009 Oracle Corporation – Proprietary and Confidential Accounts Payable

-6- For Oracle employees and authorized partners only. Do not distribute to third parties. © 2009 Oracle Corporation – Proprietary and Confidential Bootcamp Sections Procure to Pay Overview Payables Overview Suppliers Invoices Payments Expense Reports and Credit Cards Period Close Transaction Taxes in Payables Withholding Tax Advances and Progressive Contract Financing

-7- For Oracle employees and authorized partners only. Do not distribute to third parties. © 2009 Oracle Corporation – Proprietary and Confidential Section Objectives In this section we will cover the following topics: Transaction taxes in Payables Compute transaction taxes for invoices Insert manual tax lines and update transaction tax lines View tax summary and details Identify key reports related to transaction taxes Setup options in EB Tax & Payables Treatment of different types of taxes (offset tax, recoverable tax, tax on prepayment, and others)

-8- For Oracle employees and authorized partners only. Do not distribute to third parties. © 2009 Oracle Corporation – Proprietary and Confidential Payables leverages E-Business tax to setup, calculate, and manage transaction taxes such as: –Sales –VAT –Excise –Customs Duty –Environmental –Offset –Recoverable Tax Transaction taxes in Payables Overview of Transactions Taxes in Payables

-9- For Oracle employees and authorized partners only. Do not distribute to third parties. © 2009 Oracle Corporation – Proprietary and Confidential Section Objectives In this section we will cover the following topics: Transaction taxes in Payables Compute transaction taxes for invoices Insert manual tax lines and update transaction tax lines View tax summary and details Identify key reports related to transaction taxes Setup options in EB Tax & Payables Treatment of different types of taxes (offset tax, recoverable tax, tax on prepayment, and others)

-10- For Oracle employees and authorized partners only. Do not distribute to third parties. © 2009 Oracle Corporation – Proprietary and Confidential Enter Invoice E-Business Tax Validate Invoice Click Calculate Tax Change Tax Driver View Tax Lines and Distributions Calculates Tax Recalculate Taxes Compute transaction taxes for invoices

-11- For Oracle employees and authorized partners only. Do not distribute to third parties. © 2009 Oracle Corporation – Proprietary and Confidential Section Objectives In this section we will cover the following topics: Transaction taxes in Payables Compute transaction taxes for invoices Insert manual tax lines and update transaction tax lines View tax summary and details Identify key reports related to transaction taxes Setup options in EB Tax & Payables Treatment of different types of taxes (offset tax, recoverable tax, tax on prepayment, and others)

-12- For Oracle employees and authorized partners only. Do not distribute to third parties. © 2009 Oracle Corporation – Proprietary and Confidential Insert manual tax lines and update transaction tax lines Working with Transactions Taxes in Payables

-13- For Oracle employees and authorized partners only. Do not distribute to third parties. © 2009 Oracle Corporation – Proprietary and Confidential To enter manual tax lines, enable the following options for the configuration owner or event class: –Allow Entry of Manual Tax Lines –Allow Manual Tax Only Lines (optional) To manually enter tax details for Item, Freight, Miscellaneous, or Prepayment lines, complete the following fields: –Tax regime –Tax –Tax status –Tax rate –Tax amount –Place of supply (supplier site) Insert manual tax lines and update transaction tax lines (Cont…) Entering Manual Tax Lines

-14- For Oracle employees and authorized partners only. Do not distribute to third parties. © 2009 Oracle Corporation – Proprietary and Confidential To update tax lines, enable the following options for the configuration owner or event class: –Allow Entry of Manual Tax Lines –Allow Recalculation for Manual Tax Lines –Tax Line Override Impacts Other Tax Lines Insert manual tax lines and update transaction tax lines (Cont…) Updating Tax Lines

-15- For Oracle employees and authorized partners only. Do not distribute to third parties. © 2009 Oracle Corporation – Proprietary and Confidential Insert manual tax lines and update transaction tax lines (Cont…)

-16- For Oracle employees and authorized partners only. Do not distribute to third parties. © 2009 Oracle Corporation – Proprietary and Confidential Insert manual tax lines and update transaction tax lines (Cont…) Entering Tax Only Lines

-17- For Oracle employees and authorized partners only. Do not distribute to third parties. © 2009 Oracle Corporation – Proprietary and Confidential Insert manual tax lines and update transaction tax lines (Cont…) Updating Tax Lines

-18- For Oracle employees and authorized partners only. Do not distribute to third parties. © 2009 Oracle Corporation – Proprietary and Confidential Section Objectives In this section we will cover the following topics: Transaction taxes in Payables Compute transaction taxes for invoices Insert manual tax lines and update transaction tax lines View tax summary and details Identify key reports related to transaction taxes Setup options in EB Tax & Payables Treatment of different types of taxes (offset tax, recoverable tax, tax on prepayment, and others)

-19- For Oracle employees and authorized partners only. Do not distribute to third parties. © 2009 Oracle Corporation – Proprietary and Confidential View tax summary and details Viewing Tax Amounts on Invoices

-20- For Oracle employees and authorized partners only. Do not distribute to third parties. © 2009 Oracle Corporation – Proprietary and Confidential View tax summary and details (Cont…) Tax Lines Summary and Tax Details

-21- For Oracle employees and authorized partners only. Do not distribute to third parties. © 2009 Oracle Corporation – Proprietary and Confidential Tax Summary Tax Details View tax summary and details (Cont…) Viewing Tax Amounts on Invoices (Cont…)

-22- For Oracle employees and authorized partners only. Do not distribute to third parties. © 2009 Oracle Corporation – Proprietary and Confidential View tax summary and details (Cont…) Viewing Tax Amounts on Invoices (Cont…)

-23- For Oracle employees and authorized partners only. Do not distribute to third parties. © 2009 Oracle Corporation – Proprietary and Confidential View tax summary and details (Cont…) Viewing Tax Amounts on Invoices (Cont…)

-24- For Oracle employees and authorized partners only. Do not distribute to third parties. © 2009 Oracle Corporation – Proprietary and Confidential Section Objectives In this section we will cover the following topics: Transaction taxes in Payables Compute transaction taxes for invoices Insert manual tax lines and update transaction tax lines View tax summary and details Identify key reports related to transaction taxes Setup options in EB Tax & Payables Treatment of different types of taxes (offset tax, recoverable tax, tax on prepayment, and others)

-25- Sales Tax and Freight Proration Report Tax Audit Trail Tax Information Verification Letter Tax Names Listing Tax Recovery Rules Listing Update Income Tax Details Utility Use Tax Liability Report For Oracle employees and authorized partners only. Do not distribute to third parties. © 2009 Oracle Corporation – Proprietary and Confidential Identify key reports related to transaction taxes

-26- For Oracle employees and authorized partners only. Do not distribute to third parties. © 2009 Oracle Corporation – Proprietary and Confidential Section Objectives In this section we will cover the following topics: Transaction taxes in Payables Compute transaction taxes for invoices Insert manual tax lines and update transaction tax lines View tax summary and details Identify key reports related to transaction taxes Setup options in EB Tax & Payables Treatment of different types of taxes (offset tax, recoverable tax, tax on prepayment, and others)

-27- For Oracle employees and authorized partners only. Do not distribute to third parties. © 2009 Oracle Corporation – Proprietary and Confidential Setup options in EB Tax & Payables Setting Up taxes in E-Business Tax

-28- For Oracle employees and authorized partners only. Do not distribute to third parties. © 2009 Oracle Corporation – Proprietary and Confidential Setup options in EB Tax & Payables (Cont…) Financial Options

-29- For Oracle employees and authorized partners only. Do not distribute to third parties. © 2009 Oracle Corporation – Proprietary and Confidential Setup options in EB Tax & Payables (Cont…) Exclude Tax from Discounts

-30- For Oracle employees and authorized partners only. Do not distribute to third parties. © 2009 Oracle Corporation – Proprietary and Confidential Payables subtracts the tax amount from the invoice amount when it calculates the discountable amount for a scheduled payment create payments with a payment date before the system date allow users to deduct bank charges from payment Setup options in EB Tax & Payables (Cont…) Payables Options: Payment

-31- For Oracle employees and authorized partners only. Do not distribute to third parties. © 2009 Oracle Corporation – Proprietary and Confidential Setup options in EB Tax & Payables (Cont…) Taxes with Deferred Recoverability

-32- For Oracle employees and authorized partners only. Do not distribute to third parties. © 2009 Oracle Corporation – Proprietary and Confidential Enable the following option in the Party Tax Profile: –Set for Self Assessment/Reverse Charge option You can enable this option at the following levels: –Regime –Regime, Tax –Regime, Tax, Tax Jurisdiction Insert manual tax lines and update transaction tax lines (Cont…) Self Assessed Taxes

-33- For Oracle employees and authorized partners only. Do not distribute to third parties. © 2009 Oracle Corporation – Proprietary and Confidential Section Objectives In this section we will cover the following topics: Transaction taxes in Payables Compute transaction taxes for invoices Insert manual tax lines and update transaction tax lines View tax summary and details Identify key reports related to transaction taxes Setup options in EB Tax & Payables Treatment of different types of taxes (offset tax, recoverable tax, tax on prepayment, and others)

-34- For Oracle employees and authorized partners only. Do not distribute to third parties. © 2009 Oracle Corporation – Proprietary and Confidential Set Tax Registration Details: Check to mark associated tax on all supplier invoices as Self Assessed. Treatment of different types of taxes Self Assessed Taxes – Setup First Party, Party Tax Profile (EBTAX)

-35- For Oracle employees and authorized partners only. Do not distribute to third parties. © 2009 Oracle Corporation – Proprietary and Confidential Supplier’s Tax is $0 and the amount due to the Supplier is $1, Self Assessed Tax Amount Treatment of different types of taxes (Cont…) Self Assessed Taxes – Process Calculate Tax

-36- For Oracle employees and authorized partners only. Do not distribute to third parties. © 2009 Oracle Corporation – Proprietary and Confidential To calculate taxes on Prepayment Invoices, enable the following option for the Prepayment event class: – Allow Tax Applicability Tax calculation is affected by how the Applied Amount Handling option is set up. You can set this option as: –Recalculated –Prorate Treatment of different types of taxes (Cont…) Considerations for Taxes in Prepayments

-37- For Oracle employees and authorized partners only. Do not distribute to third parties. © 2009 Oracle Corporation – Proprietary and Confidential To define tax tolerances: –Enable the Allow Override for Calculated Tax Lines option for the configuration owner or event class Tax Tolerances define the limits of user override If an invoice exceeds the Tax Tolerances, then a Tax-Related Hold is applied during Invoice Validation Treatment of different types of taxes (Cont…) Tax Tolerance and Tax related Holds

-38- For Oracle employees and authorized partners only. Do not distribute to third parties. © 2009 Oracle Corporation – Proprietary and Confidential Existing Oracle Payables implementations that use Offset Taxes can setup and manage Offset Taxes in E-Business Tax. –Ensure that the Set as Offset Tax option is enabled for the tax. For new taxes and new implementations, use E-Business Tax’s Self Assessed tax feature instead. Treatment of different types of taxes (Cont…) Offset Taxes

-39- For Oracle employees and authorized partners only. Do not distribute to third parties. © 2009 Oracle Corporation – Proprietary and Confidential To define a supplier as subject to income tax reporting requirements: –Enter a Taxpayer ID –Enable the Federal option and select an Income Tax Type (1099 MISC Type). –Enable the State option, if applicable –Enable the Allow Withholding Tax option If you enter a purchase order for a 1099 supplier, then Oracle Purchasing retains the Income Tax Type information at the purchase order line level. Treatment of different types of taxes (Cont…) Suppliers Subject to Income Tax Reporting

-40- For Oracle employees and authorized partners only. Do not distribute to third parties. © 2009 Oracle Corporation – Proprietary and Confidential Treatment of different types of taxes (Cont…) Taxes with Deferred Recoverability

-41- For Oracle employees and authorized partners only. Do not distribute to third parties. © 2009 Oracle Corporation – Proprietary and Confidential Treatment of different types of taxes (Cont…) Tax Variances