Saturday, January 22, 2022

How Do You Turn Off Or Disable Tax Calculation In R12 E-Business Tax (EBTax)

 1) How to turn off tax calculation for all products and taxes in case a tax regime exists

1) Login as Tax Manager
2) Navigate: Parties > Party tax profiles
3) Select "First Party Legal Entity" and choose your Legal entity then press "Go"
4) Click "Update tax profile"
5) Select "Configuration Options
6)  Enter an effective to date for the tax regime and apply
7) Navigate: Parties > Party tax profiles
8) Select "Operating Unit Owning Tax Content"
9) Enter your operating unit and press "Go"
10)  Click on "update tax profile"
11) Select "Configuration Options
12) Enter an effective to date for the tax regime and apply

2) How to turn off tax calculation for all products and taxes in case NO tax regime exists

Ans) 1)Check your transaction types and make sure that the Tax Calculation check box is not checked

2)Since you did not setup any tax, then you need to uncheck tax for each country that you do not want to calculate tax.

Responsibility is Trading Community Manager
Administration > Geography Hierarchy
Query for your Country
Make sure the tax box is not checked

3) How to stop tax calculations for all taxes within a single module (Ex: AP)

Ans) As Tax Managers, navigate Defaults and Controls > Configuration owner Tax Options.  Click "Create" and select the configuration owner and Event Class  (ex: Standard Invoices   -- Payables).  Uncheck the "Allow Tax Applicability" checkbox and save.
4) How to disable tax calculation for an entire flow (Sales or Purchases)

Ans) To define a rule for order to cash to disable tax calculations applies to all modules, do the following

1. Login with Tax Managers Responsibility.
2. Navigate to Tax Configuration -> Tax Rules.
3. Query for your tax rule:
4. Click on "Guided rule entry" next to the "Determine Tax Applicability" rule
5. Select the Option 'This rule applies to specific transactions only.'
6. Select 'Event Class Category' = 'Tax Event Class'.
7. Select 'Event Class' = 'Sales Transaction'.
8. Enter the other conditions (if any) for this rule then "Next"
9) Set the "Applicable tax" as "Not Applicable".  This is the "outcome" for the conditions above.  In our case it would evaluate that for Sales transactions (Order Management, Receivables, Project Invoices, Contracts, iStore, etc) if the condition from step 8 occurs then set the outcome to "Not Applicable"
8. Click NEXT till last step and then click FINISH to save the changes.

Modify this slightly as need to create a rule for Procure to Pay.

5) How to Turn off Tax Calculation for an Operating Unit

Ans)  1)  Set up your tax regime to rate flow so that the content is owned at the "Global Configuration Owner" level
2)  Subscribe only those operating units to the regime to rate flow that should be taxed.  Be sure to select "Common Configuration with Party Overrides" when subscribing the regime to the operating unit.
6) How to Turn off Tax Calculations if the Place of Supply is Outside the Regime Country

Ans) There are two methods for disabling tax calculations where the place of supply is outside of the Regime Country.

Method 1:  Set the place of supply in the tax rules form (Say to Ship-To) and create tax rates associated with Jurisdictions for in-country locations only.  The system will only find tax rates when a jurisdiction match is found and the tax will not be applied for exports.

Method 2:  Create non-jurisdiction rates (set the jurisdiction to null on the tax rate)  and then define a  Tax Applicability Rule that references the appropriate address as shown in the screenshots below. (example below assumes a place of supply is Ship-To and there is no tax is levied on exports)

7) How to Turn off Tax Calculation for an AR Transaction Type
Ans) Please do the following to stop the tax calculation for specific transaction type

1.Go to Tax Manager > Advanced Setup Options > Tax Determining Factor Sets Click on Create > Enter name

Determining Factor Class > select Transaction Generic Classification
Determining Factor Name > Select Transaction type
Click Apply.

2. Go to Tax Condition Sets and click on create
Give a name and select the factor set you have just defined
Click next
Select the relevant transaction type in the Value From field and apply.

This completes the factor and condition sets setup.

3.Go to Tax configuration > Tax Rules Page

Give Operating Unit as the Configuration Owner and query the regime.

4.For the Rule Type "Determine Applicability", click on the "Guided Rule Entry" Button
Give a rule name, start date and click next.
Select the condition set and factor set you have defined and select Result as 'Not Applicable'
Then give rule Order and enable the rule and click finish.

This rule will imply the following

> If Transaction Type = '.......', then the tax is not applicable;

So if you use this transaction type, the tax should not get calculated.

8) How to Allow the User to pick if the system should calculate tax for each Invoice Line

Ans) 1)  Tax Managers > Tax Configuration > Tax Rates > Create
Under one of your taxes (say State in this example) enter a tax rate code with the name "No Tax" and a rate of zero, null jurisdiction.

2)  Tax Managers > Tax Configuration > Tax Rules
Query your STATE tax
3) Click on Guided Rule Entry for the Determine Tax Applicability rule name (Make sure your default is Applicable)
4) Click on This rule applies to specific transactions only and set the tax event class to Sales Transactions
5) Expand the Additional Factors Available on Transaction Line section  of the "rule conditions" page and add the condition "Tax Classification Code"  Equal to  "No Tax"
6) Set the outcome to "Not applicable'
7)  Complete the rule
8)  Repeat the same rule setup for both county & city (if United States).  You do not need to create a "No Tax" tax rate under county/city, just state
9)  Enter an invoice line and select "No tax" as the tax classification code on the invoice line.  Save.  No tax will calculate.

This rule leverages the R12 feature that allows you to pick a tax rate code as a tax classification code on an invoice line. Note that this code is ignored unless a rule exists to reference the code thus it can be used as discussed above to provide flexibility to a user to not charge tax.

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