European VAT

Copyright © 2006, Oracle. All rights reserved.

 Objectives

After completing this lesson, you should be able to:

• Explain the components required to set up European
VAT
• Calculate VAT on your invoice

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 What is European VAT?

A value added tax that varies depending on the European

country that goods are moving in and out of.
• Moving goods among countries of the European Union
often times incurs a cost.
• There might be a local VAT that applies to the movement
of goods within a single country or a cost moving goods
from one country to another.

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 European VAT Configuration

Components required for OTM to calculate the European

VAT.

Component Defines
VAT Code What percentage rate to apply
VAT Outcome What rules OTM should apply within the VAT
configuration. The logic for deciding VAT outcomes is
hard coded.

VAT Configuration What rules OTM should apply

Country Codes Mark country as EU member

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 VAT Outcomes

Used by the Calculate VAT action to calculate European

VAT.
• OTM logic goes through a series of scenarios.
– All result in one of seven VAT outcomes.

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 VAT Outcomes

VAT Outcome ID Description

EXEMPT_EXPORT_FOREIGN_SERVPROV VAT exempt; foreign service
provider

EXEMPT_EXPORT_LOCAL_SERVPROV VAT exempt; local service provider

EXEMPT_HANDLING_CHARGE Exempt handling charge
IMPORT_FOREIGN_SERVPROV Import; foreign service provider
IMPORT_LOCAL_SERVPROV Import; local service provider
INTRA_EU_VAT_APPLIES Intra EU VAT applies
LOCAL_VAT_APPLIES Local VAT applies

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 VAT Configuration

VAT Configuration determines the rules for calculating

provincial taxes.

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 Designate Countries as EU members

• For a country to be considered valid for European VAT

calculation, it must be designated as a member of the
European Union (EU).
• If you need to change the definition of a country, you
will find all countries in the PUBLIC domain.

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 Demo Overview:
Viewing a European VAT Code

This demonstration covers viewing a European VAT Code.

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 Practice Overview:
Calculating European VAT

This practice covers the following topics:

• Tendering the last TL shipment, the Spanish leg
• Tendering and accepting the tender for the service
provider
• Creating a payment invoice
• Calculating VAT on this European invoice

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 Summary

In this lesson, you should have learned how to:

• Explain the components required to set up European
VAT
• Calculate VAT on your invoice

1 - 11 Copyright © 2006, Oracle. All rights reserved.