Creating a new, separate Tax Regime is the cleanest method for isolating a distinct tax requirement. This approach ensures the new 5% tax is calculated in isolation without interfering with the existing STANDARD rate logic used by other products. It provides clear auditability and maintainability, aligning with Oracle’s recommended practice of using regimes to model distinct legal tax obligations.

For recoverable tax (like VAT) to post to the correct GL accounts, two key setups are critical: 1) The Tax Recovery Rule defines *how* and *what percentage* of tax is recoverable. 2) The Tax Recovery GL Account, assigned via the Tax Determining Factor setup (mapping the rule to a specific account), determines *where* the recoverable amount is posted. Verifying these ensures the accounting engine knows both the amount and the destination for the recovery entry.

The EU Sales Listing report uses Reporting Codes to identify which transactions to include. Each transaction’s Business Category (e.g., DOMESTIC, EU) must be mapped to a specific ESL Reporting Code (e.g., ‘S’ for goods, ‘SERV’ for services). If this mapping is missing for the German subsidiary’s transaction flow, those transactions will be excluded from the report, even if they are otherwise tax-calculated correctly.

The ‘In’ operator, combined with a Tax Determining Factor Set of type ‘Postal Code Range’, is the optimal and maintainable method. This allows you to define a reusable set containing multiple postal codes or ranges (e.g., 10000-10200, 75001). The rule condition then simply checks if the transaction’s ship-to postal code is ‘In’ that predefined set, which is far more efficient than creating numerous ‘Equals’ conditions or using a less precise ‘Like’ operator.

The Prepare Tax Reconciliation Report works directly with data in the Tax Reporting Ledger (TRL). The TRL is a dedicated, tax-specific repository of accounting data. If the ‘Generate Tax Reporting Ledger’ process has not been run for the period in question, the reconciliation report will have no data to process, resulting in the ‘No data found’ error, even if general ledger journals exist.

Oracle E-Business Tax provides a ‘Maximum’ tax status for this exact scenario. You would create two tax rate details: one for the per-item charge (e.g., Rate Per Unit = $1) and one for the percentage (Rate Percent = 5%). By assigning the ‘Maximum’ tax status to the rule, the system automatically calculates tax both ways and applies the higher of the two resulting amounts, meeting the legal requirement efficiently within the application’s framework.

The Tax Variance Report is explicitly built to compare the system-calculated tax amount against a manually entered tax amount (often from a supplier invoice) for the same transaction. It highlights discrepancies (variances) between these two values, which is crucial for audit purposes, identifying potential setup errors, or validating supplier charges, making it the correct tool for the described task.

The core feature for this requirement is the Tax Exemption setup within a party’s (customer’s) tax profile. By creating an exemption for a specific tax, setting the ‘Certificate Required’ flag, and maintaining a certificate with a ‘Valid’ status and effective dates, the system can automatically apply the exemption during tax calculation. The rule engine evaluates the exemption status without needing manual intervention on each transaction.

Deferred tax accounting is controlled at the Tax Regime and Tax Status level. First, the Tax Regime must have its ‘Allow Deferred Tax’ option enabled. Second, a specific Tax Status (e.g., ‘DEFERRED’) must be created and assigned to the tax rule. This status is linked to temporary GL accounts. When a transaction uses this status, the tax is posted to the deferred accounts. A subsequent settlement process (like payment) moves the amount to the final liability accounts.

Creating a new, separate Tax Regime is the cleanest method for isolating a distinct tax requirement. This approach ensures the new 5% tax is calculated in isolation without interfering with the existing STANDARD rate logic used by other products. It provides clear auditability and maintainability, aligning with Oracle’s recommended practice of using regimes to model distinct legal tax obligations.0