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11i to R12 Upgrade: Impact for Tax [Part II-Receivables]

This is the second part of a series discussing impacts for tax processing when upgrading from 11i to R12. Part II will address how Receivables tax components are migrated.

Tax Codes and Tax Groups in 11i Receivables will be migrated in the same manner as those in 11i Payables. A Regime will be created for each Operating Unit. A Tax, Status, and Tax Rate will be created for each 11i Tax Code that exists in the Operating Unit. Tax Classification codes created for Receivables Tax Codes will have a type of ‘Output’. A Tax Rule with type of ‘Direct Rate’ will be created to associate each Tax Classification Code to the corresponding Tax Rate. Tax Group conditions are migrated as additional formulas in Tax Rules. No Offset Tax Code functionality exists in Receivables.

Oracle Receivables application also has the concept of location-based tax in the US with tax structures tied to address components. Location-based structures are migrated to a Regime with the structure ID in the name.  A Tax for structure components (COUNTY, CITY, and STATE) will be created within the Regime. Tax location records for state, county, city, and postal combination are migrated into the geography structures in Trading Community Architecture (TCA). A Tax Jurisdiction is created for each tax location structure and the Tax Jurisdiction is tied to the geography record. Tax Rates will be tied to Tax Jurisdictions for tax calculation so no Tax Rules are created.

Customer exemptions in 11i are migrated to R12 and have the same general capabilities. But the exemption in R12 is actually migrated to a different data element. In 11i, the exemption is tied to the customer or customer site record. In R12, the exemption is tied to the location which represents the party site. Locations for customers exist in the same table as locations for suppliers and employees in R12.

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April Stooksberry

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