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Easy Oracle R12 EBTax Australian GST – In a Day!

by | Mar 10, 2019 | Oracle EBTax, VAT/GST

General

 Australia is another GST country that is essentially your garden variety VAT tax in that GST is charged from Raw Materials to Retail sales with the customary Input Tax Credits applied along the way whereby the end customer is the ultimate payor of the fully elaborated Tax.

Registration:  Threshold is A$75,000 in Revenue
Authority:        Australian Taxation Office
Rate:                   10% Charged on Products, Services, Professional Services
GST Free:          Rent on Private Residence, Food, List

Reverse Charge should be handled by using an Offset Tax.

Foreign Firms selling into Australia

Non Resident Firms shall be required to register for GST provided they are selling A$75,000 of goods or services into Australia

Rules, Rules Rules…

Setup (configuration in EBTax) of a Australian Indirect Tax Regime is relatively straightforward for those skilled in the Art of Oracle EBTax (most folks who have EBTax Responsibilities assigned to them with configuration access either should in fact not or thankfully are disciplined enough not to mess with the configurations, especially if the firm processes 1000’s of AR/AP transactions.)

Here’s an Oracle R12 EBTax configuration for Australia

Regime

  • Australia GST

Taxes

  • Australia GST
  • Australia GST Offset

Statuses (Could Divi Up By AP and AR)

  • Standard
  • GST Free
  • Out of Scope
  • Reverse Charge

Jurisdiction

  • Australia

Rates (Could Divi Up by AP and AR)

  • Standard (10%)
  • GST Free
  • Out of Scope
  • Reverse Charge (-10%)

Recovery Rates

  • 100% 
  • 0%

Rules

  • Define the defaults for PoS, Applicability, Registration, Status, Rate
  • Upon a full review of the particular company’s exposure and based an elaborated category taxonomy  a full suite of rules would be devised accordingly

This is not to simply say….

Keep in mind, this is not to say that designing a Australia Indirect Tax solution should be done by someone who says they do Oracle Financials per se as the complexity in the solution is NOT in the configuration, but rather in understanding Indirect Tax Law.  By fully understanding the Law/Regulations one can then set about in addressing such nuances in the Rules engine in combination with leveraging a thoughtfully established Category Taxonomy in Inventory (leveraging the Inventory Items as the lowest common denominator) or at a minimum using The categorization facility in EBTax.

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