AP Invoice Tax Cal High-level Steps#ORACLE FUSION
In Oracle Fusion, the tax calculation for AP invoices works by applying the appropriate tax rates to the taxable items on the invoice. Here is an example of how the tax calculation process works in Oracle Fusion:
Example:
Suppose an organization has set up the following tax codes and rates in Oracle Fusion:
Tax code: Standard rate
Tax rate: 10%
Tax code: Reduced rate
Tax rate: 5%
The organization receives an AP invoice from a supplier with the following items:
Item 1: $100
Tax code: Standard rate
Item 2: $50
Tax code: Reduced rate
Item 3: $20
Tax code: Exempt
To calculate the tax for this invoice, the organization would follow these steps:
Identify taxable items on the invoice: In this case, the taxable items on the invoice are Item 1 and Item 2, as they have tax codes that are subject to tax. Item 3 is exempt from tax.
Apply the appropriate tax rates: The organization would apply the tax rates for the taxable items as follows:
Item 1: $100 x 10% = $10 tax
Item 2: $50 x 5% = $2.50 tax
3. Calculate the total tax for the invoice: The organization would add up the tax amounts for all of the taxable items to calculate the total tax for the invoice:
Total tax = $10 + $2.50 = $12.50
4. Add the total tax to the invoice total: The organization would add the total tax amount to the invoice total to calculate the final amount that the supplier will be paid:
Invoice total = $100 + $50 + $20 + $12.50 = $182.50
In this way, the tax calculation process in Oracle Fusion helps organizations accurately calculate and apply taxes to AP invoices, ensuring compliance with tax laws and regulations.
In reality the Tax Calculations are Complicated, In this post i tried to Simplify so that Everyone understands . Hope this Helps.
Happy Learning.
