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Innovate Tax Ltd. FACTSHEET: How to Add a New Tax Rate. Copyright 2017.

FACTSHEET:

How to Add a New Tax Rate

STEP 1.

Navigate to your Tax Regimes. This should be in the Tax Manager Responsibility (or whatever your equivalent is). Tax ManageràTax ConfigurationàTax Regimes

Enter the country name of the tax regime you want to update, click ‘Go’ then click on the ‘Regime to Rate Flow’. Does the tax rate that you are changing contain the percentage amount in the rate name, such as FR VAT REDUCED 2.1%? If so, then go to Step 2. If there is no percentage in the rate name such as FR VAT STANDARD INC then go to Step 6.

The intention of this document is to show you how to add a new tax rate in Oracle eBusiness Tax R12. In this example, we will be updating the French reduced rate of 2.1% to 3%. This is for a newly created R12 tax solution rather than one that has been upgraded from 11i.

FACTSHEET:

How to Add a New Tax Rate

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Innovate Tax Ltd. FACTSHEET: How to Add a New Tax Rate. Copyright 2017.

FACTSHEET:

How to Add a New Tax Rate

Step 2.

Find the tax status that the rate belongs to, in this case it is the Tax is FR VAT, the Status is FR VAT REDUCED LOW and after expanding, you can see that there is already a rate existing for the old 2.1%, FR VAT REDUCED 2.1%.

Click on the ‘Update’ for this rate. DO NOT end date this tax, nor click the ‘Add Another Row’ but instead click on the ‘Rate Details’ icon. Then change the ‘Default Effective To’ date to be the last day that this tax is in use as shown below.

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Innovate Tax Ltd. FACTSHEET: How to Add a New Tax Rate. Copyright 2017.

FACTSHEET:

How to Add a New Tax Rate

Make a note of the other set-ups as the next step is to replicate these details under the new rate. Click ‘Save’.

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Innovate Tax Ltd. FACTSHEET: How to Add a New Tax Rate. Copyright 2017.

FACTSHEET:

How to Add a New Tax Rate

Step 3. Having saved the existing tax rate, it is now time to create the new tax rate. Go back to the regime to rate flow and click the ‘Create Tax Rate’ for the FR VAT REDUCED LOW Status. It is important to note that we are creating a new tax rate and not deleting the existing rate. This is because we want to keep the old rate for when we need to create credit memos for older transactions. Enter the ‘Tax Rate Code’ keep the same format at the tax other tax rate. Do not enter a ‘Tax Jurisdiction Code’.

Enter the percentage rate and the effective from date from when the new rate comes into effect. When this is done, click on the ‘Rate Details’.

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Innovate Tax Ltd. FACTSHEET: How to Add a New Tax Rate. Copyright 2017.

FACTSHEET:

How to Add a New Tax Rate

Create the new tax rate using the same information from the previous tax (FR VAT REDUCED 2.1%) and ensure that the start dates are the same as the tax rates ‘Effective From’ date otherwise the rate cannot be saved.

It is important to have the ‘Default Effective From’ date to be the day after the old rate was end dated. This will mean that the system will automatically choose the correct tax rate on the correct dates. Click ‘Apply’.

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Innovate Tax Ltd. FACTSHEET: How to Add a New Tax Rate. Copyright 2017.

FACTSHEET:

How to Add a New Tax Rate

Step 4. Now click on the ‘Tax Accounts’.

The tax accounts should default in from the ‘Tax’ but they may not be correct or you may need to add a new tax account to the rate. To check the existing account – click on the ‘Update Tax Account’.

Update the tax account to the correct account.

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Innovate Tax Ltd. FACTSHEET: How to Add a New Tax Rate. Copyright 2017.

FACTSHEET:

How to Add a New Tax Rate

Click on ‘Apply’ several times until the tax rate is saved.

Step 5. Review the tax status to ensure that the new tax rate has been created.

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Innovate Tax Ltd. FACTSHEET: How to Add a New Tax Rate. Copyright 2017.

FACTSHEET:

How to Add a New Tax Rate

Step 6. For some rates, it is better to put the rate percentage in the name as this helps with identifying at the time the tax has been calculated or so it can be used for credit memos in AR but for others, those that are either a 0% tax or one that is only used in AP, then it is easier to manage the tax rules by not using a percentage in the name. So if the standard rate for France increased from 19.6% to 21% then not only do we need to update/add to the FR VAT STANDARD 19.6% rate (see Step 2) but also the other rates that have 19.6%. In the example below, we are updating the AP only FR VAT STANDARD INC rate. To do this, click on the ‘Update’ button against the rate.

Step 7. Once you are in the rate, there are two ways of changing the percentage.

1. Click on the ‘Add Another Row’ and enter the details manually. 2. Click on ‘Duplicate Details and Accounts’, which copies the old rate data to the new rate.

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Innovate Tax Ltd. FACTSHEET: How to Add a New Tax Rate. Copyright 2017.

FACTSHEET:

How to Add a New Tax Rate

There can be an issue with option two, with the duplication as there used to be a bug that does not save the dates correctly and leaves the rate un-updatable. When using the duplication, ensure that you change the tax rate name and description to show the new percentage rate rather than the old one. Also ensure that you have the correct start dates and ‘Default Effective From’ date.

Click ‘Continue’ and ensure the correct tax accounts are being used. Then click on ‘Apply’ and save your work.

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Innovate Tax Ltd. FACTSHEET: How to Add a New Tax Rate. Copyright 2017.

FACTSHEET:

How to Add a New Tax Rate

Lastly, add the ‘effective to’ date to the old tax rate as shown below.

Click ‘Apply’.

This FACTSHEET was produced by Innovate Tax Ltd. We hope it was helpful. For further Factsheets or advice visit: www.innovatetax.com