Setting Up Tax Legal Entity

Use the Legal Entity Configurator to set up these parties:

• First party legal entity - The legal entities that represent your company.

• First party legal establishments - The legal establishments that have or require tax registrations, either implied or explicit, from one or more tax authorities.

• Legal authorities - The legal authorities that represent the tax authorities in the tax regimes where you do business.

When you set up a legal entity or establishment, you can also set up party tax profile details, including general information, rounding rule, and tax registrations. See: Party Tax Profiles in Oracle E-Business Tax, Oracle E-Business Tax User Guide for more information.

If you set up country default controls for the countries where you do business, then the applicable tax regime and tax values default to the legal establishment tax registration record. 

Setting Up Legal Entities

Set up the legal entities that represent your company. You must set up your company as a legal entity before you can perform these tax-related setups:

• Party tax profiles - Party tax profiles contain the information that relates to a party's transaction tax activities, and identify the legal entity to the tax authorities. See: Setting Up a First Party Tax Profile, Oracle E-Business Tax User Guide for more information.

• Configuration options - Configuration options indicate the tax regimes to which the legal entity is subject. For each tax regime/legal entity assignment, the configuration option also defines the way in which the legal entity uses tax configuration data for the regime. See: Setting Up Configuration Options, Oracle E-Business Tax User Guide for more information.

• Configuration owner tax options - Configuration owner tax options let you set specific transaction tax processing and control options for a combination of configuration owner and application event class. See: Setting Up Configuration Owner Tax Options, Oracle E-Business Tax User Guide for more information.

When you set up legal entities for your company, set the Transacting Entity option to Yes. See: Creating a Legal Entity, Oracle Financials Implementation Guide for more information.

After you set up legal entities, set up the legal establishments that belong to the legal entity.

Setting Up First Party Legal Establishments

Set up a legal establishment record for each office, service center, warehouse and any other location within the company that requires a registration with a tax authority for one or more taxes. You set up legal establishments under a parent legal entity.

When you set up legal establishments, you can also perform these tax-related setups:

• Party tax profiles - Set up a party tax profile for each legal establishment. You can set up certain details of the party tax profile when you create the legal establishment. See: Setting Up a First Party Tax Profile, Oracle E-Business Tax User Guide for more information.

• Tax registrations - Set up tax registrations for each legal establishment. Depending on the applicable tax requirements, you may need to set up more than tax registration for an establishment. You must complete additional setup in E-Business Tax to set up a tax registration. See: Setting Up a Tax Registration, Oracle E-Business Tax User Guide for more information.

Use the Associate Business Entities region to link a tax-related business entity to a legal establishment. 

Setting Up Legal Authorities

Set up a legal authority record for each tax authority that administers taxes in a tax regime where you do business. While not mandatory, you can set up legal authority records before you perform these tax-related setups:

• Tax authority tax profile - Set up tax authority tax profiles for your collecting, reporting, and issuing tax authorities. A collecting tax authority manages the administration of tax remittances. A reporting tax authority receives and processes all company transaction tax reports. An issuing tax authority issues tax registration numbers and tax exemption certificates. See: Setting Up a Tax Authority Tax Profile, Oracle E-Business Tax User Guide for more information.

• Basic tax configuration - The collecting and reporting tax authorities appear in the corresponding list of values on these tax configuration setups:

  • Tax regimes

  • Taxes

  • Tax jurisdictions

• Tax registrations - Enter the tax authority responsible for issuing the legal establishment tax registration number. Update the collecting and reporting tax authorities that default from the tax jurisdiction record. See: Setting Up a Tax Registration, Oracle E-Business Tax User Guide for more information.

• Tax exemptions - Enter the tax authority that issues the tax exemption certificate. See: Setting Up Tax Exemptions, Oracle E-Business Tax User Guide for more information.

When you set up a legal authority, set the Legislative Category to Transaction Tax.