Every customer we come across asks for the tax returns that can be automated from Oracle to be set up – they are all waiting with smiles on their faces because they think that finally, Oracle can provide the information for a tax return directly out of Oracle. But it is not quite as it seems as there is a lot more needed to get the right output as what you have is the platform to build your own report, not the reports themselves.
Sure, ‘Tax Box Allocation Rules’ exist, previously only available in R12 for Portugal and Belgium, and have been made available to every country now which is a simple and clever move by Oracle. But lets look at what we want or rather need when it comes to capturing the information that goes into the tax return boxes.
To create a tax box, you need to create a ‘Tax Reporting Type’ that is linked to tax boxes. Within the tax reporting type you can create the boxes and against each box, you have to choose one ‘Amount Sign’ of ‘Plus’ or ‘Minus’. You also have to set the ‘Box Type’ which can only be one of the following;
- Taxable – Recoverable
- Taxable – Non Recoverable
- Tax – Recoverable
- Tax – Non Recoverable
If you want both a recoverable and non-recoverable amount then this is not possible.
Below is a table of the common scenarios you will need and whether the tax box allocations can handle them or not. All of which are common scenarios needed in order to complete a tax return.
[wp_excel_cms name=”Oracle Fusion Tax Box Allocations”]
As you can see – in the majority of cases, it does not meet the requirements. The solution simply cannot handle the level of complexity needed but there is a reason for this. All the Tax Box Allocation Rules can do is allow you to report actual values only in a limited fashion and then expect the users to manually add or manipulate the data in order to actually create the returns.
Offset taxes cannot be used either as in order to use, you need to be able to choose the ‘Tax’ and offset taxes are not available to be chosen to create normal rules and so cannot be used for the allocation rules either.
So why can we not set the boxes up without any link to the ‘Amount Sign’ or the ‘Box Type’ until we allocate the condition to the rule? This would solve all the issues as for each condition we can say, the result of the tax condition is that we want to ‘Plus’ the amount to Box 1 and put this amount to the recoverable tax ‘Box Type’. Its not possible because the entire architecture is based on current tax rules and current tax rules only allow one result, and here lies the problem! For the allocations to be a success, we need to have three results per condition. The box number, whether we are adding or subtracting the amount to this box and what part of the tax we are reporting (taxable, tax, recoverable, nonrecoverable). So there is no way Oracle are going to change without a complete redesign of the solution.
So ‘Tax Box Allocation Rules’ is the wrong way to describe this – its more ‘ad hoc tax reporting’ because thats all it will ever be. There is nothing stopping you from editing the final reports either due some of the excellent BI reports and functionality.
Would I advise you to go near Tax Box Allocation Rules? Absolutely – because providing you have a good indirect tax solution, you can still get a lot more out of the numbers than you can with the Financial Tax Register.