Wednesday Jan 30, 2013

Why didn’t Tax get Calculated on My Invoice?

The most frequent question we get in EBS Financials support............Why won't my tax calculate?   In Release 12, many factors can influence tax applicability and prevent a tax from being levied on an invoice.  Frequently this is a setup issue - either an unintended consequence of a setting, or even a setting that has not been saved correctly.  We thought it would be helpful to run through some of the troubleshooting steps we follow when trying to diagnose your tax calculation issues!


  • Tax Regime
Navigation: Tax Managers > Parties > Party Tax Profile
  • Tax

Navigation: Tax Managers > Parties > Party Tax Profile > Main Tab 

  • Tax Status
Navigation: Tax Managers > Tax Configuration > Tax Statuses
  • Tax Rate and Jurisdiction
    • Dates on the transaction must fall within those on the Rate and Jurisdiction
    • Tax Rate must be defined as a child to the tax status derived in the prior section
  • Tax Rules
    • Users are strongly encouraged to apply the latest tax rule engine patch referenced in Document 1301356.1 to avoid known issues with rule evaluations in EBTax.
    • When implementing E-Business Tax you must specify a default rules before taxes can be enabled. Make certain that the default for 'Determine Tax Applicability' is set to Applicable or that you have a rule defined and enabled that makes the tax applicable for your specific transaction.
  • Configuration Owner Tax Options

Navigation: Tax Managers > Defaults and Controls tab 

  • Intercompany (AGIS) 
    • Intercompany transactions presently do not pass a ship-to address.  Make sure that your tax rules for intercompany transactions are flexible enough to derive the proper tax rate without reliance on ship-to
  • Transaction
    • If your tax considers ship-from in Receivables, make certain you specify a warehouse on your transaction line 
    • Make certain the address on your transaction and for your Legal Entity and Operating unit are valid

This includes detailed screen shots of the setup

    • To assist in finding these records, the following document can be leveraged
This document details many of the diagnostics that can be run to get transactional data from different EBS products as well as setup information from E-Business Tax
  • Additional Considerations

E-Business tax has the flexibility to specify complex tax rules at a wide variety of levels.  Rules can consider fiscal classifications set at the party or product level, transaction classifications codes and many additional factors.  Troubleshooting expert tax rules will be addressed soon in a separate note.  Until the note is published we suggest that you read and review the examples in the following document:

DocID 1108463.1, How Tax Determining Factors Work in R12 E-Business Tax


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