With Oracle R12 applications, indirect tax (sales, use, VAT) functionality has been transformed from independent and simplistic setups within a few applications to a centralized tax service or engine. Initially, that sounds great! Especially to those of us who have tried to implement tax complexities with limited features in 11i. Dig in and what you find is an engine capable of performing complex functions … except you have to define everything to make that engine function. It’s like having somebody ship you a frame for a car. You get to figure out what all the other parts are that you need, order them, and put them together! That can be challenging, whether you are building a Porsche or a Mini!
There are a few ready alternatives for partial content information … we can get rate files from some of the tax software vendors and use them to load rates, jurisdictions, and geographies. We can also use some of the content libraries provided by Oracle but they don’t cover all jurisdictions and some of the content is already outdated. And all that does is give us rates. We still have to determine all of the rules needed to use those rates correctly given the nature of each transaction.
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Even if we know all of the rates and all of the rules that apply to every product we buy or sell in every jurisdiction in which we do business, is that really what we want our tax personnel and/or IT personnel spending their time researching and maintaining?
One of the features that is provided with R12 e-Business Tax (eBTax) is the ability to integrate with a third party tax software package like Vertex, Sabrix, or Taxware (tax provider). Those companies have done all the research to identify tax situations and legislation for each of the jurisdictions they support, they have programmed their engines with the rules that apply, and they perform ongoing research to update those rules as well as supply current rates for each jurisdiction and product category.
Maybe the best choice we can make is to use the service features of eBTax that allow it to integrate with a tax provider and let the tax provider do the heavy lifting!
Read More about “Making Sense of EBTax and Oracle R12” in our Perficient Perspective on the subject.