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Easy Oracle R12 EBTax New Zealand GST – In a Day!

by | Mar 6, 2019 | VAT/GST

General

 

New Zealand is another GST country that is essentially your garden variety VAT tax in that VAT 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 NZ 60,000 in Revenue
Authority:        Inland Revenue Department
Rate:                   15% Charged on Products, Services, Experiences, Professional Services
Exempt:             Rent on Private Residence, Donated Products, Financial Services
Zero Rated:      Exported Goods, Sales of businesses, Sale of Land

Reverse Charge should be handled by using an Offset Tax.

Rules, Rules Rules…

Setup (configuration in EBTax) of a New Zealand 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 New Zealand

Regime(s)

  • New Zealand GST

Taxes

  • GST
  • GST Offset

Statuses (Could Divi Up By AP and AR)

  • Standard
  • Zero Rated
  • Exempt
  • Out of Scope
  • Reverse Charge

Jurisdiction

  • New Zealand

Rates (Could Divi Up by AP and AR)

  • Standard
  • Zero Rated
  • Exempt
  • Out of Scope
  • Reverse Charge

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 New Zealand 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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