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Tax User Manual - Oracle Documentation

1. Description Currency Details Detats Tenor Currency Tax Currency Date Time Mod No Date Time Record Status Rounding option for Calculation Currency You need to specify the rounding option to be used for conversion of the amount to calculation currency It could either be Currency Default or Specific 2 9 ORACLE Currency Default indicates that the rounding details should be taken from the rounding parameters defined in Currency Maintenance Specific indicates that the rounding parameter should be defined picked up from the Tax Rule Rounding Method for Calculation Currency You need to specify the rounding method to be used for conversion of the amount to calculation currency This field would be enabled only if the calculation currency rounding option is Specific Select one of the following options e Truncate e Round Up e Round Down e Round Near Truncate indicates that the amount should be truncated to the number of decimals specified for the currency Round Up indicates that the amount should be rounded up based on the number of decimals and the nearest rounding unit for the currency Round Down indicates that the amount should be rounded down based on the number of decimals and the nearest rounding unit Round Near indicates that the amount will rounded either up or down to the specified number of decimal places amd uni
2. 3 9 ORACLE The system displays the following chargedetails Component Type ESN Pickup Event Sequence Number Event Value Date Charge Amount Recalc Amount The system displays the following tax details Tax Component Basis Component Event Value Date Tax Code Tax Type Rate GL Code Tax Amount Recalc Tax Amount The accounting details related to reversal and recalculation of charge and tax can be viewed in the entries sub screen 3 1 ORACLE 8 9 8 Donec I4 4 101 gt gt I G Local intranet Protected Mode Off A 910 Commission in LC is collected with different combinations as below The Reversal and Rebook of commission will be different for these combinations Periodic amp Advance This type will be allowed to reverse amp re calc only the commission collected for the current period If the advance LC Commission is accrued then this will not be allowed to be reversed If collected and realized in the Income GL then it will be reversed This means commission which is accrued realized in some receivable GL it will not be reversed Periodic amp Arrears This type will not be allowed to reverse amp re calculate Non Periodic amp Advance This type will be allowed to reverse amp re calc the commission collected If the advance LC Commission is accrued then this will not be allowed to be reversed If collected and realized in the Income GL then it will be
3. Currency Details Rounding Details Additional AmountSlab Tenor Slab Currency Details Exchange Rate Basis Amount Currency Reference Currency Rate Type Rate Code Calculation CCY Basis Deal X Basis Percentage a Tax Currency Basis Deal Date Time Mod No Checker Date Time Record Status Authorization Status Rule Code This is the code by which the tax rule is identified If you are defining a new tax rule enter its code in this field You can specify the attributes for this tax rule in the rest of the fields If you select an existing tax rule from the Tax Rule Summary View table the code is displayed in this field You can select an existing tax rule if you want to perform any of the following operations Modify All the details of the selected tax rule are displayed Except for the Tax Rule Code you can modify the input in any of the fields Delete All the details of the selected tax rule are displayed You can delete the record only if its addition has not been authorized Copy Except for the Tax Rule Code the other details related to the tax rule are displayed which can be changed Enter the Code for the new rule before you save the tax rule Close All the details of the selected tax rule are displayed If you confirm the closure the tax rule record will be closed A closed record will continue to exist in the system but c
4. Tax Rule 1 Rule Code TaxP1 Effective Date 1 Jan 2002 Component Transfer amount Tax Rate 10 Tax Rule 2 Rule Code TaxP2 Effective Date 1 April 2002 Component Transfer amount Tax Rate 12 Tax Rule 3 Rule Code Effective Date 1 Jan 2002 Component Charges Earned Tax Rate 10 Tax Rule 4 Rule Code Taxl2 2 38 ORACLE Effective Date 1 April 2002 Component Charges Earned Tax Rate 12 When all these rules are linked to a single tax scheme the tax will be applied in the following manner For the Transfer amount If you initiate a transfer from 1 Jan 2002 to 31 Mar 2002 the transfer amount will be charged at 10 If you initiate a transfer from 1 April 2002 onwards the transfer amount will be charged at 12 This is because after Tax Rule 1 Tax Rule 2 is for transfer and it has an Effective Date of 1 April 2002 All transfers will continue to be taxed at 12 till another rule for the transfer amount with a different Effective Date is added to the scheme For the Charges Earned The charges will also be taxed in the same manner as the transfer amount as two rules have been linked to the Tax Scheme that have exactly the same Effective Date and rates as the ones for the transfer amount The basis component on which the tax should be applied principal interest transfer amount etc is specified through the Tax Scheme Maintenance
5. screen You can invoke this screen by typing CFDADCHG in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button 2 51 ORACLE Financial Non Financial Commission Adhoc Charges Commission Branch Code 000 Customer No Account Contract Module Account Contract Reference Charge Details Account Number Contract Reference Number Charge Component Charge Account Currency Charge Basis Base Value Rate Charge Amount Charge GL Transaction Code Maker Checker 9 Fixed Amount Base Value Date Time Date Time Adhoc Charges Commission Branch Code The system displays the branch code Customer No Transaction Reference Number Serial Number Transaction Date Remarks 2014 01 31 Tax Code Tax Code Type Waive Reason Code Reason Tax Rate Tax Amount Tax GL Transaction Code F Default Waiver Auth Status Record Status Select the customer number from the adjoining option list Account Contract Select Account Number or Contract Reference Number as applicable Module Select the module from the adjoining option list Account Contract Reference Select the account contract reference number from the adjoining option list Transaction Reference
6. Customer Category Country Code Minimum You can query for the details based on any or all of the following criteria Authorization Status Rule Code Customer Category Minimum Amount Rate Type Region Code Record Status Effective Date Country Code Maximum Amount Rate Code Click Search The system displays the following details Authorization Status Record Status Rule Code Effective Date Customer Category Country Code Minimum Amount 2 21 ORACLE Rate Type Rate Code 2 5 2 6 e Region Code Maintaining Tax Code You can maintain tax codes and descriptions in the Tax Code Maintenance screen To invoke this screen type TADTXCMT in the field at the top right corner of the Application tool bar and click the adjoining arrow button Tax Code Maintenance Tax Code Description Maker Date Time Checker Date Time Record Status Authorization Status Tax Code Specify the tax code Description Give a brief description on the tax code maintained Viewing Tax Code Details You can view the details maintained in the Tax Code maintenance screen in the Tax Code Summary screen To invoke this screen type TASTXCMT in the field at the top right corner of the Application tool bar and click the adjoining arrow button 2 22 ORACLE 2 7 Tax Code Summary Authorization Status Record Status Tax Code aj Sear
7. screen Tax Schemes too are linked to a product through this screen You can invoke this screen by typing TADSCHEM in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button Tax Scheme Maintenance Scheme Code Description Rule Details L1 z Input By Authorized By Modification Authorized Date Time Date Time Number Open 2 39 ORACLE 2 10 3 Features of Tax Scheme Maintenance Screen Scheme Code Identify the Tax Scheme that you are maintaining with a unique code A scheme consists of several tax components classes You can indicate the components that you would like to include in the scheme in the Component field 2 11 Linking a Tax Scheme to a Product A tax scheme is linked to a product only if tax is applicable to the product This linkage is established through the tax screen of product definition The tax scheme thus linked will be applicable on a contract processed under the product by default However you have the option of waiving the application of tax for a specific contract A Tax Rule represents the method in which a specific tax has to be calculated The amount based on which the tax has to be applied is not specified for a Tax Rule This is specified only when the Tax Scheme is linked to a product The system thus offers you flexibility in terms of the method in which tax has to be calculated For example for one type of produ
8. Tax Oracle FLEXCUBE Universal Banking Europe Cluster Release 11 3 81 02 0 October 2013 Oracle Part Number E51523 01 ORACLE FINANCIAL SERVICES ORACLE Table of Contents 1 ABOUT THIS MANUAL P oe sos 1 1 1 1 INTRODUCTION eripe nta 1 1 2 AUDIENCE 1 1 1 3 ORGANIZATION 2 Diet errato viet rites c eds 1 1 1 4 CONVENTIONS USED IN THIS MANUAL enne nennen enne nennen trennen innen innen nennen nnns 1 1 15 GLOSSARY ORICONS eto iere etie ates GUI HR etii dS 1 1 1 6 RELATED DOCUMENTS eerte emeret ir Een ete test ii ie uri 1 2 2 BUILDING TAX COMPONENTS eeeeeeee eene eene sete suns ta sins tn sts tu seta suse ta senses sesso s sess sees suse tasas 2 1 2 1 IEX y LO DIODA N OE 2 1 2 1 1 Steps Involved in Processing 2 1 2 2 MAINTAINING TAX CATEGORY 2 1 23 5 See TREET en eee e EE Ie EIEEE Eea i ERENS eaS 2 5 2 3 1 RU X M E 2 9 2 3 2 Tax Application MethodAdditional Details eene nennen nennen 2 11 2 3 3 EC 2 15 2 3 4 JA Ide MR 2 18 ZA NIBWING TAX DETAILS e terere eve hae ee Ee RE
9. CUSTOMERNO The customer number for which the Alphanumeric tax summary certificate is printed CUSTOMERNAME The customer name Alphanumeric FROMDATE The from date for which the certificate Date is generated TODATE The to date for which the certificate is Date generated TXNNUMBER The contract reference number Alphanumeric 16 characters CALCDATE The tax calculation date Date TAXCCY The tax currency Alphanumeric 3 characters TAXAMTINTAXCCY The tax amount in tax currency Number INTERESTAMT The interest amount basis amount on Number which the tax has been calculated Individual Certificate Required You need to indicate whether or not Individual Tax Certificate is required for individual transactions This option would work in conjunction with a similar option in the Customer Information Maintenance screen and the Tax Details screen accessed from the Branch Parameters Details screen The message type for individual tax certificate would be IND_TAX_CERT For contracts that have tax defined on interest liquidation an individual tax certificate will be generated by the system if the Tax Certificate is mapped as an advice for the event and the Individual Tax Certificate is required for the Customer The tax certificate will be generated only if the Individual Certificate Required option is checked at the Customer and Branch levels and maintained in Tax Category For income other than through interest on customer accounts the ad
10. This is the Tax Amount to be waived First the Waiver Amount from the original amount would be calculated Then this would be subtracted from the original amount to arrive at the Tax Amount After applying the Customer Level Waiver 96 the system would round the Tax Amount again based on the rounding parameters at the Tax Amount level This would be the final tax amount to be deducted from the Account Example Consider the following scenario A deposit account yields an interest of USD 152 Tax rate is 3096 Basis Percentage is 5096 Available Tax Free Allowance Limit is USD 50 Calculation and Tax Currency are EUR and 1 EUR 1 13 USD Rounding Rule for both Calculation and Tax Currency is Truncate Customer Tax Group Waiver is defined as 2096 The tax computation would be as follows Total Interest Amount Basis Amount USD 152 After application of Basis Percentage the Basis Amount would be USD 152 50 100 USD 76 After application of the Tax Free Allowance the Basis Amount would be USD 76 50 USD 26 Now the Basis Amount would be converted into the Calculation Currency Thus the Basis Amount in EUR is USD 26 1 18 EUR 29 38 Since the Rounding Rule is Truncate the actual taxable amount would be EUR 29 The tax amount computed would be EUR 29 30 100 EUR 8 7 On applying the rounding rule Truncate the tax amount would be EUR 8 Now the Inverse of Basis Percentage would be applied to get the final tax a
11. Number The system displays the transaction reference number Serial Number The system displays the serial number 2 52 ORACLE Transaction Date The system displays the current system date Remarks Specify remarks if any Charge Details Charge Component Select the charge component from the adjoining option list Charge Account Select the charge account from the adjoining option list Currency The system defaults the account currency Charge Basis Select the charge basis The options are Fixed Amount e Base Value Base Value Specify the base amount You can specify the base value only if Base value is selected as Charge Basis Rate The system defaults the rate based on the charge component selected as maintained in the Charge Commission Details Maintenance screen You can choose to modify the defaulted rate You can specify the Rate only if Base Value is opted as Charge Basis Charge Amount If charge basis is selected as base value charge amount is system defaulted on click of calculate button with amount calculated on the basis of base value and rate If charge basis is selected as fixed amount you can input value in this field Charge GL The system defaults the charge GL based on the charge component selected as maintained in the Charge Commission Details Maintenance screen Transaction Code Select the transaction code from the adjoining option list
12. e tax type whether withholding or an expense type of tax e The association event e The application event e The liquidation event e The default tax rule Tax classes can be categorized into e Transaction Level Tax classes e Issuer Tax classes Transaction level taxes are those that would be levied on the portfolios you maintain and the contracts that you enter into Issuer taxes are those that are withheld by the Issuer of a security when disbursing cash dividends and coupons 2 26 ORACLE 2 9 1 Defining Transaction Level Taxes as Classes You can define the attributes of a transaction level tax under the corresponding section of the Tax Class Maintenance screen You can invoke this screen by typing TADTAXCL in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button Tax Class Maintenance Class Code Class Description Module Description Transaction Level Tax Issuer Tax TaxType Withholding v E Net Consideration Borne By Bank Add Subtract E Cash Outflow SWIFT Qualifier Event For Association az Basis Component Event for Application Default Rule zz Event For Liquidation 7 Default Waiver Allow Rule Amendment 1 Allow Amount Amendment Amend After Association Amend After application Input By 27259M01 Author
13. e Original contract is liquidated e Anew contract is initiated 2 14 1 1 Specifying Rollover Tax Details for the product In the Product Rollover Details screen you should specify the following tax details Whether tax has to be applied on the rolled over contract For tax to be applicable on a rolled over contract e It should be applicable to the product involving the contract e not have been waived for the original contract You have to indicate whether tax has to be applied on the rolled over contract also 2 14 1 2 Liquidating tax on principal upon rollover If tax is applied on the principal of a contract at the time of its initiation when you roll over the contract you have two choices in the treatment of tax e Apply tax on the principal outstanding principal outstanding interest or only the outstanding principal depends on your specifications of the new contract e Since the principal of the old contract has already been taxed you can choose to waive tax on the principal of the rolled over contract However if this principal has an outstanding interest from the old contract incorporated in it then only this portion the outstanding interest portion which is now a part of the principal will be taxed e This option applies only to tax on principal and not to tax on interest e This field assumes importance only under the following circumstances e for principal as well as interest has not been w
14. in order to change the DIRT exempt status of any customer account 2 15 3 Exempting DIRT on interest on deposits For marking term deposit contracts as DIRT exempt invoke the DIRT Exemption Details screen from the Application Browser You can invoke this screen by typing TADACMNT in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button From the list of values select the contract that you wish to specify as DIRT exempt Those tax components attached to the contract for which the exemption allowed option has been selected while maintaining tax rules are displayed 2 59 ORACLE 2 16 Refer to the Specifying Tax Exemption section earlier in this chapter for details on marking tax components for exemption Select the components that you wish to be waived for the deposit For each component that you mark off as waived you can select a reason from the pre shipped list of values and also enter additional information as text Static Maintenance for Adhoc Charges Components You can maintain a list of all the possible adhoc charges components under which a customer can get charged either with Stamp Duty tax or VAT You can invoke this screen by typing CFDADOMT in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button Charge Commission Details Maintenance Charge Commission Details Charge Commission Code Charge Commissi
15. reversed This means commission which is accrued realized in some receivable GL it will not be reversed Non Periodic amp Arrears This type will not be allowed to reverse and recalculate 3 2 ORACLE 4 Screen Glossary 4 1 Function ID List The following table lists the function id and the function description of the screens covered as part of this User Manual Function ID Function Description TADACMNT DIRT Exemption Details TADCATG Tax Category Maintenance TADRATE Tax Rates Input TADRTCD Tax Rate Code Maintenance TADTXRUL Tax Rule Maintenance TADSCHEM Tax Scheme Maintenance TADTAXCL Tax Class Maintenance TARAYABL Tax Payable Report CFDADCHG Financial Non Financial Commission CFDADCMT Charge Commission Details Maintenance CFSADCHG Financial Non financial Commission Summary CFSADCMT Charge Commission Details Summary TADGLMNT Tax Code GL Mapping TADREVRC Reversal and recalculation of tax and charges TADRTCD Tax Rate Code Maintenance TADTXCMT Tax Code Maintenance TASTXCMT Tax Code Summary TASGLMNT Tax Code GL Mapping Summary TARTAXRP Tax Report TASTAQDT Tax Query 4 1 ORACLE ORACLE Tax October 2013 Version 11 3 81 02 0 Oracle Financial Services Software Limited Oracle Park Off Western Express Highway Goregaon East Mumbai Mahara
16. 2 11 1 3 Surcharge If a surcharge is to be applied on the final tax amount then the surcharge should be created as a separate rule in the Tax Rule maintenance screen This Rule should be included in the same Tax Scheme as the primary tax rule In the Product Tax Linkage screen the Basis Amount for the surcharge should be the tax component of the primary tax rule 2 11 1 4 Processing Tax on a Contract The taxes that apply on a contract can be of two types Expense and Withholding The tax that your bank bears on a contract is referred to as an expense type of tax whereby you book the tax component to a Tax Expense account The tax that is borne by counter party of a contract is referred to as a withholding tax whereby you debit the counter party s account and credit the tax component into a Tax Payable account to be paid to the government on the counter party s behalf Example A tax on a Letter of Credit LC can be levied either on the 2 43 ORACLE e Outstanding LC amount e Onthe commissions and charges that you earn to process the LC In both cases it is the bank that bears the tax this is an Expense type of tax The tax expense account should be debited and the tax payable account should be credited From this liability account the tax should be later on paid to the government You can invoke the Contract Tax Details screen while you are processing a contract Click Tax button in the contract deta
17. Amount for taxes purpose e Tax Currency e Tax calculated amount e Tax Paid Customer Number Customer Name Portuguese Tax ID Tax code Tax GL Category TGIS Account Number or the Contact Number Currency Transaction reference number Tax component Tax rate Basic currency Basis amount Tax currency 3 3 ORACLE 3 3 Calculated Amount Paid Amount Exempted Exemption Code Operation date Revrsal Date Tax Query You can query tax details in Tax Query screen To invoke this screen type TASTAQDT in the field at top right corner of the Application tool bar and click the adjoining arrow button Tax Query Screen Branch B Customer ID Module Account Contract Reference Tax GL Number E Tax Code Type Exempted Value Date Q Search Advanced Search Records per page 15 14 4 1 Of 1 EE Customer ID Module Account Contract Reference Account Contract Currency TaxGLNumber You can to filter your search based on any of the following criteria e Branch e Module e Tax GL Number e Exempted e Customer ID e Account Contract Reference e Tax Code Type 3 4 ORACLE e Value Date When you click Search button the records matching the specified search criteria are displayed Branch Code Customer ID Module Account Contract Reference e Account Contract
18. Currency e Tax GL Number e Tax Code Type e Tax Code e Component e Basis Amount Currency e Basis Amount e Exempted e Exemption Code e Rate e Tax Currency e Tax Amount e Tax Paid e Transaction Date e Value Date e Portuguese Tax ID Number e TGIS Number e Reversal Date 3 4 Advices Whenever a tax is applied an advice is generated with the following information Bank Name Branch Name Customer Data Name Address Customer ID Portuguese tax ID Number NIB Identification Advice Data Advice Date of Issue Indication if the advice is for credit debit or both Contact Data Reference number of the contract Operation Data Value Date Transaction Description Tax Rate and Amount Currency Base Amount Indication of Debit or Credit Message Type TAX_ADVICE Format Codes TAX_ADVICE 3 5 ORACLE Mandatory Field Optional Advice Tags Name Description Conditional Bank Code to which the customer belongs will be _BKCODE_ Bank Code shown here M Bank Name will be BKNAME Bank Name shown here M Branch Code to which the customer Branch belongs will be BRCODE Code shown here M Branch Branch Name will be BRNAME Name shown here M Customer Customer Name will CUSTNAME _ Name be shown here M Customer Customer Address _ADD1_ Address 1 will be shown here M Customer Customer Address _ADD2_ Address 2 will be shown here M Customer Customer Address _ADD3_ Address 3 wi
19. OS Ebr RR E 2 20 2 9 MAINTAINING VAX CODE reinii ee syceseuussececesecessuesacshensesveouasbeesscusysenvnabhdessturesesbuebndedrecesdeescevsenseweesesteebucy 2 22 2 0 VIEWING TAX CODE DETAILS entente tte er etre eher ONE ek nir ee Ree rn e oie earns 2 22 2 MAINTAINING TAX CODE AND 2 23 2 8 VIEWING TAX CODE GL MAPPING 5 2 25 2 9 MAINTAINING TAX COMPONENTS AS CLASSES seen 2 26 2 9 1 Defining Transaction Level Taxes as Classes essen nennen nennen renes 2 27 2 9 2 Defining Issuer Taxes as Classes esses enne eene ee Eea EE E trennen rennen 2 31 2 9 3 Defining the Events and the Basis Amount eese eterne nennen trennen rennen 2 32 2 9 4 Maintaining Rate Codes and their Values eese eene 2 33 2 9 5 Furnishing the Rate Values for a 2 33 2 9 6 Associating a Rate Code with an Issuer Class eese nennen eene enne 2 35 2 10 GROUPING TAX COMPONENTS INTO A SCHEME c ccccscssssscesecssesecssesscseeescssesesesecsessecsesesessecesesessuesessesenes 2 36 2 10 1 Defining Securities and Derivative taxation schemes eese 2 36 2 10 2 Defining a Money Taxation scheme 2 38 2 10 3 Features of Tax Scheme Maintenance Screen eese eerte eene ene 2 40 2 11 LINKING A TAX SCHEME TO A PRODUCT csscsscosssnsonsenevoscseosnsnsscsseneoseossonseonsvaccosossonsessensesn
20. SD 5 000 USD 2 5 If the component amount is USD 15 000 it falls in the second tier The tax will be calculated in the following manner Amount USD 15 000 Floor Charge X 5 0 Amount to be taxed at 0 06 USD 5 000 Component Amount the floor amount of the second tier 2 17 ORACLE USD 3 5 USD 8 If the Component Amount is USD 30 000 it falls in the third slab The tax amount will be calculated in the following manner Component Amount USD 30 000 Floor Charge Y 11 0 Amount to be taxed at 0 08 USD 10 000 Component Amount the floor amount for the second tier Tax Amount USD 8 11 USD 19 Tax Code Select the tax code from the adjoining option list 2 3 4 Tenor Slab Click Tenor Slab tab to capture tax slab details Rube Maintenance Rule Code Customer Category Desongbon Efectve Date Country Coo Tax Category Region Cos Descnpbce Currency Rounding Addbonal Amount Stab Tenor Siad Tenor From and To Specify the tenor of the tax slab Tenor Type Select the type of the tenor from the adjoining drop down list The options are Years Months Days 2 18 ORACLE Flat Amount Specify the flat amount Rate Specify the rate Floor Amount Specify the floor amount Floor Charge Specify the floor charge Tax Code Specify the code of the tax Round Up Check this box if round up is applicable For LC module each tenor slab will
21. Tax Details Tax Code Select the tax code from the adjoining option list 2 53 ORACLE Tax Code Type The system defaults the tax code type Default Waiver The default waiver is applicable based on the tax status determination at the customer level Waive Reason Code The system displays the waive reason code based on the customer and tax code selected Waive Reason The system displays the waive reason based on the customer and tax code selected Tax Rate Specify the tax rate Tax Amount Tax Amount is system calculated based on tax rate and charge amount Tax GL The system displays the tax code GL based on the tax code GL code mapping maintained in the Tax Code GL Code Mapping screen Transaction Code Select the transaction code from the adjoining option list Click on Accounting button to invoke Entries screen Financial Non Financial Commission Entries 10f1 CENE Branch Account Account Currency Debit Credit Transaction Code AmountTag Foreign The accounting details related to financial and non financial charge and tax can be viewed in the entries sub screen 2 54 ORACLE 2 13 Viewing Financial Non financial Commission Details You can view the details maintained in the Financial Non financial Commission Details screen in the Financial Non financial Commission Summary screen To invoke this screen type CFSADCHG in the field at the top right corner o
22. Tax Expense account to be paid to the Government You can also process tax as a Withholding type of tax where you debit the customer account and credit the tax component into a Tax Payable account to be paid to the Government on the customer s behalf Depending on the laws in your country you can define tax as an expense type of tax ora withholding type of tax Steps Involved in Processing Tax The following steps are involved in processing tax e Defining Tax Rules e Defining Tax Classes e Defining Tax Schemes e Associating a Product with a tax scheme Maintaining Tax Category You need to maintain valid Tax Categories in the system in order to apply tax on products or contracts You can invoke the Tax Category Maintenance screen by typing TADCATG the field at the top right corner of the Application tool bar and clicking the adjoining arrow button 2 4 ORACLE Tax Category Description Cl Aggregation Required C Consolidated Certificate Required C individual Certificate Required Input By Authorized By Modification Authorized exit Date Time Date Time Number Open Tax Category Tax category needs to be maintained only if tax rules of your country require maintenance of tax allowances and tax waivers for customers Description Enter a tax category along with a description This becomes a valid tax category maintained in the system Aggregation Required You need to indicate w
23. aived on the old contract e Tax has not been waived on the rolled over contract 2 14 1 3 Specifying rollover tax details for the contract While specifying rollover details for the contract you should indicate the following Whether tax has to be applied on the contract You have specified for the product whether tax has to be applied on a rolled over contract If you have opted to apply tax on the rolled over contract through this screen you can waive it for the rolled over contract Liquidating tax on rollover If you have specified for the product that tax on the principal of rolled over contracts should be liquidated then this attribute applies to all the contracts involving the product But through this Screen you can specify that tax on the entire principal should not be liquidated for a contract that you are processing 2 57 ORACLE 2 15 2 15 1 If you have specified for the product that tax the principal of rolled over contracts should not be liquidated then this attribute applies to all the contracts involving the product Through this screen you can make tax applicable on the principal of the rolled over contract Specifying exemption of tax on interest earned on accounts deposits Features of application of DIRT Deposit Interest Retention Tax DIRT is payable on interest earned on accounts and deposits This is deducted by the bank in the form of withholding tax Normally you will deduct DIRT for al
24. ance e Tax would be waived in the following cases gt If the interest rate is less than 1 gt If the interest period is more than one year gt If the amount is less than 10 EUR To achieve the above defined waivers UDE s would have to be created and used in the conditional clause for Tax Formula For the Waiver Rule where the Interest Period should be more than one year the liquidation frequency would have to be set to one year Also the Rule attached to the Product Tax Formula should not be defined For the other two options the UDEs would have to be created For example consider if an IC RUL1 is defined with two formulas FORMULA1 with normal book formula that calculates the credit interest and FORMULA2 the tax formula In such a case the following UDE s would have to be defined for this Rule RATE The credit interest rate Tax rate Value of this can be 1 For checking the interest rate TAX_AMT Value of this can be 10 EUR For checking the amount The Tax Formula FORMULA2 would be defined as follows Condition Result RATE gt TAX RATE CAP AND FORMULA1 gt FORMULA1 TAX_AMT TAX_RATE This maintenance would have to be controlled operationally by the Bank e Ifthe interest amount does not fall under the above waivers then the system will start the calculation process for the tax amount e The system will apply the of the Basis Amount for t
25. anner From 1 January 1999 to 31 March 1999 coupons paid will be taxed at 0 5 From 1 April 1999 onwards the coupons will be taxed at 0 75 Coupons will continue to be taxed at 0 75 till another rate code with a different Effective Date is encountered Associating a Rate Code with an Issuer Class The tax that applies on a coupon would be calculated at a specific rate When building an issuer tax component you have to specify the rate at which tax should be computed for a coupon When you associate a rate code that you have maintained with a component the rates corresponding to the component will be picked up A rate code identifies the rate that applies on a tax A rate code is built with attributes such as the following e tax currency e The basis amount currency e Effective Date e The Exchange Rate Type and Category Tax for the component to which you link a rate code will be computed by default on the basis of these properties When maintaining a security however you can choose to waive the rate code altogether 2 35 ORACLE 2 10 2 10 1 Grouping Tax Components into Scheme A Tax Scheme consists of a set of Tax Rules that will be made applicable on a product Tax schemes can be two types e Schemes which cater to Money Taxation These tax schemes involve a combination of tax rules only In Oracle FLEXCUBE money taxation schemes are made applicable on deposit funds transfer foreign exchange
26. annot be used To use a closed record you should reopen it Reopen All the details of the selected tax rule are displayed If you confirm the reopening of the record it will become available for use again 2 5 ORACLE Print The details of the selected tax rule are displayed on the screen and then directed to the printer Authorize The details of the tax rule will be displayed You can authorize the record if the following conditions are true The record has some activity unauthorized You have rights for authorization You did not initiate the activity that is pending authorization Customer Category Customer categories are maintained by your bank in the customer maintenance module These could be categories like banking corporate brokers financial institutions etc You can choose the customer category for which the tax rule is being defined You could also choose to define the tax rule for all categories of customers Country Code You can apply specific tax rules based on the country of residence of the customer Thus individual tax rules for each combination of customer category country code with an effective date can be maintained Select the country code for the customer from the option list Based on the country of residence of the customer specific tax rules can be applied Region Code Select the region code from the adjoining option list Tax Category Various Tax categories open a
27. at the amount should be truncated to the number of decimals specified for the currency Round Up indicates that the amount should be rounded up based on the number of decimals and the nearest rounding unit for the currency Round Down indicates that the amount is rounded down based on the number of decimals and the nearest rounding unit Round Near indicates that the amount will rounded either up or down to the specified number of decimal places and units depending on whether the next decimal place exceeds or is less than 5 Decimals for rounding tax currency This field is enabled only if the Calculation Currency Rounding Option is selected as Specific You need to specify the decimal up to which the rounding truncation needs to be done The rounding decimals defined here should be less that or equal to the decimals defined in Currency Maintenance Units for rounding tax currency This field is enabled only if the Calculation Currency Rounding Option is selected as Specific You need to specify the unit up to which the amount should be rounded The unit defined here should be a multiple of the unit defined in Currency Maintenance 2 3 2 Tax Application MethodAdditional Details Click Additional Details tab to capture additional details 2 11 ORACLE 4 Tar Rule Code Customer Descrpbon Date Coury Cod t Resin Coca Dascr
28. ation and its affiliates disclaim any liability for any damages caused by use of this software or hardware in dangerous applications This software and related documentation are provided under a license agreement containing restrictions on use and disclosure and are protected by intellectual property laws Except as expressly permitted in your license agreement or allowed by law you may not use copy reproduce translate broadcast modify license transmit distribute exhibit perform publish or display any part in any form or by any means Reverse engineering disassembly or decompilation of this software unless required by law for interoperability is prohibited The information contained herein is subject to change without notice and is not warranted to be error free If you find any errors please report them to us in writing This software or hardware and documentation may provide access to or information on content products and services from third parties Oracle Corporation and its affiliates are not responsible for and expressly disclaim all warranties of any kind with respect to third party content products and services Oracle Corporation and its affiliates will not be responsible for any loss costs or damages incurred due to your access to or use of third party content products or services
29. ax calculation This would give the amount on which tax has to be calculated The would be arrived at from the maintenance at the tax formula level After computing this amount the system would apply the rounding rules defined for the Basis Amount for this amount 2 48 ORACLE e Once the Basis 95 is arrived at the system would look into the Customer Account Customer Level Allowance Limit for the Tax Cycle defined This would be in the system as a separate Maintenance The System would first look into the table where the Customer Account Limit is maintained for the customers If this is not found then the system would look into the Customer Allowance Limit Maintenance and get the Customer Level Limit maintained Once the value of the Allowance Limit is arrived at the system would deduct this from the Basis Amount obtained after applying the Basis and arrive at the Taxable Amount e The system would update the Amount Utilized in a separate data store for Utilization of the Limit This would happen online e Onthis amount only the system would apply the Tax Rate and compute the Tax Amount e After calculating the Tax Amount the system would round the Tax Amount based on the rounding parameters for the Tax Amount e Next the Inverse Basis 95 would be applied on the Tax Amount e After computing this amount the system would apply the Customer Level Waiver This waiver would be maintained again as a separate maintenance in Oracle FLEXCUBE
30. ax to the government on behalf of the broker Expense type If you choose to bear the tax that is payable on brokerage you would define it as an expense type of tax The tax entries in this case would be posted to an Expense account If you bear the tax there could either be an immediate cash Outflow or payment or a mere crediting of it to a Tax Payable account In the latter case there would not be an immediate Outflow The tax would be paid at a later date from the Tax Payable account The Net Consideration The sum of the different components of a contract determines the net value of the contract To indicate that a transaction level tax component should be taken into account when determining the net value of a contract choose the Net Consideration option If you choose to include the tax component in the net value of the contract you should also indicate if the tax component is to be added or subtracted while calculating the net consideration amount Qo authorization of tax class system creates an accounting role and associated amount tag Accounting role is created as tax class name PRT amp Amount tag is created as tax class name LIQD Example Assume you buy securities from a counterparty The different components of the deal are e The value of the securities USD 50 000 e The applicable tax USD 1 000 e The accrued interest USD 1 500 e The applicable charge USD 50 If you choose to include the tax component when cal
31. belongs The Effective Date The date on which a rate becomes effective is referred to as the Effective Date For a code and Effective Date you can maintain a rate The Tax Currency You can specify the currency in which the tax should be applied The Exchange Rate Type and Category If you specify a Basis Amount Currency that is different from the Tax Currency you have to indicate the type of rate standard spot cash etc and the rate category mid buy or sell rate that should be used in the currency conversion The Tax Rate In this field you can enter the actual rate value for a Code for an Effective Date When you associate a rate code with an issuer tax class the rates corresponding to Effective Dates will be picked up and applied 2 34 ORACLE 2 9 6 Example You have defined the following Issuer Tax classes only the fields relevant to the example are discussed Tax Class 1 Class Code Issu clas1 Basis Amount Coupon Amount Effective Date 1 January 1999 defined for the associated Rate Code Tax Rate 0 596 defined for the associated Rate Code Tax Class 2 Class Code Issu_clas2 Basis Amount Coupon Amount Effective Date 1 April 1999 defined for the associated Rate Code Tax Rate 0 75 defined for the associated Rate Code Tax for securities associated with the Issuer Tax component will be computed in the following m
32. ch Advanced Search Records per page 15 4 4 1 Of 1 You can to filter your search based on any of the following criteria e Authorization Status e Tax Code e Record Status When you click Search button the records matching the specified search criteria are displayed e Authorization Status e Record Status e Tax Code Maintaining Tax Code and GL Code You can map each tax code with a GL code in the Tax Code GL Mapping screen To invoke this screen type TADGLMNT in the field at the top right corner of the Application tool bar and click the adjoining arrow button 2 23 ORACLE LZ Tax Code GL Mapping Tax Code Tax Code Description Tax Code Type Stamp Duty v GL Code 2d GL Code Description TGIS Number Maker Date Time Checker Date Time Record Status Authorization Status Tax Code Select the tax code from the adjoining option list Tax Code Description The system displays the tax code description Tax Code Type Select the type of tax code from the adjoining drop down list The options available are e Stamp Duty e Income Tax e VAT GL Code Select the GL code from the adjoining option list GL Code Description The system displays the GL code description TGIS Number Specify the TGIS number for the tax code The system allows same GL account for multiple tax codes but a particular tax code can have only GL Ac
33. count 2 24 ORACLE 2 8 Viewing Tax Code GL Mapping Details You can view the tax code GL mapping details using Tax Code GL Mapping Summary screen To invoke this screen type TASGLMNT in the field at the top right corner of the Application tool bar and click the adjoining arrow button Tax Code GL Mapping Summary Authorization Status Record Status Tax Code GL Code Tax Code Type TGIS Number Q Search Advanced Search Records per page 15 14 4 1 Of 1 M lemme Authorization Status Record Status GL Code Tax Code Type TGIS Number You can query for the details based on any or all of the following criteria Authorization Status Tax Code Tax Code Type Record Status GL Code TGIS Number Click Search The system displays the following details Authorization Status Record Status Tax Code GL Code Tax Code Type TGIS Number 2 25 ORACLE 2 9 Maintaining Tax Components as Classes A class is a specific type of component that you can build with certain attributes For instance you can build a tax class with the attributes of a specific type of tax component such as an Issuer Tax Similarly you can build a charge class with the attributes of a specific type of charge such as Charges for provision of services When building a tax class certain attributes such as the following can be defined e The module in which you would use the class
34. ct you could use a Tax Rule to apply tax on interest earned while for another product the same rule could be used to apply tax on the principal if the method of tax calculation is the same for both the components A Tax Scheme is applicable on a product by linking the two rates mentioned above Once the Tax Scheme is specified for linkage you should indicate the component on which the two rules are applicable the event when the tax should be liquidated and the type of tax withholding or expense To specify the linkage of a tax scheme to a product you have to invoke the Product Tax Linkage Definition screen from the LD MM Product Definition screen Click Tax button in the respective Product Definition screen 2 40 ORACLE Corporate Deposits Product Tax Details Scheme Details Product Description Product Code Scheme Description Tax Scheme Tax Details 10f1 rar rue Tar component Basis amount Tao raeme EN ao Currency Details 10f1 Currency Maximum Interest Period for Tax Period Unit Minimum Interest Amount for Tax nmm You can view the following details Product Code and Description The system displays the product code and the description of the product for which the tax details are being maintained Tax Scheme and Description The system displays the tax scheme and the description of the scheme 2 11 1 1 Specifying Tax Details The following are the feat
35. culating the value of the deal choose the Net Consideration option Indicate if the component is to be Added or Subtracted Result If you choose the Net Consideration option and decide to add the tax component to the value of the deal the net value of the deal would be USD 52 550 If you choose the Net Consideration option and decide to subtract the tax component from the value of the deal the net value of the deal would be USD 50 550 If you do not choose the Net Consideration option the net value of the deal would be USD 51 550 Defining the Events and the Basis Amount Each contract that your bank enters into goes through different stages each of which is referred to as an Event in Oracle FLEXCUBE A securities deal for instance goes through different stages in its life cycle such as e Deal Booking 2 28 ORACLE e Money Settlement of Securities Deal e Settlement of Securities Deal e Reversal of Securities Deal e Cancellation of Securities Deal Each of these stages is referred to as an Event in Oracle FLEXCUBE The following are examples of the events for a portfolio that you maintain e Booking of Contingent Asset e Accrual of Discount Earned e Accrual of Interest Earned e Forward Profit and Loss Accrual At any of these events you can choose to apply a tax The event at which you would like to associate a tax component is referred to as the Association Event At this event no accounting entry for the tax comp
36. currency gt The Net Taxable Amount arrived at here would again be rounded up using the Currency Rounding Parameters gt The taxable amount Basis Amount would then be converted into the Calculation Currency Basis Amount Currency in case the Calculation Currency defined in the Tax Rule is different from the contract currency gt The Taxable Amount Basis Amount thus computed would be rounded using the rounding parameters defined for the Calculation Currency Even if the taxable amount is in the same currency as Calculation Currency rounding would be done using the Calculation Currency rounding parameters defined in the Tax Rule gt The appropriate Tax Rate would be picked up based on the slabs defined in the Tax Rule and the tax would be computed on the rounded taxable amount gt The tax amount thus computed would then be converted into Tax Currency if the tax currency is different from the Calculation Currency gt The converted amount would then be rounded using the Tax Currency Rounding parameters gt The Basis Percentage defined in the Tax Rule would be applied again to the tax amount to compute the actual tax amount The inverse of Basis Percentage would be applied to get the Actual Tax Amount Thus if the Basis Percentage is 50 and the tax computed by the system is USD 125 the actual tax amount would be gt USD 125 100 50 USD 250 gt The tax amount computed after application of the Basis Percentage would a
37. dule If the tax rule has a tax category linked to it then the currency details will be mandatory A validation for this would be done during tax processing In case the tax rule does not contain the tax category and the currency details have not been defined then the maximum interest period would be ignored and the minimum interest amount would be considered as 0 indicating that the tax would always be computed Period Unit This field appears only for LD and MM product maintenance You need to specify the unit for the interest period The available options are as follows e Days D e Months M e Years Y Minimum Interest Amount for Tax This field appears only for LD and MM product maintenance You need to specify interest amount up to which tax will be waived The minimum interest amount would be applicable only for the Deposit type of products for LD and Borrowing type of products for MM module If the tax rule has tax category linked to it then the currency details will be mandatory A validation for this would be done during tax processing In case the tax rule does not contain the tax category and the currency details have not been defined then the maximum interest period would be ignored and minimum interest amount would be considered as 0 indicating that the tax would always be computed If the interest amount being liquidated is less than the minimum interest amount tax will be waived completely for that transaction
38. ective Date is added to the scheme Currency in which the Tax has to be Calculated This can be the local currency or the currency of the contract When a rule for which the tax should be calculated in local currency is applied on a contract involving a foreign currency the local currency equivalent of the contract amount is considered Currency Details Calculation Currency Basis Calculation currency is the currency in which the Basis Amounts slabs are defined You need to specify whether the calculation currency for the Basis Amount should be Specific or Deal Specific indicates that the Basis Amount will be defined as per the currency selected in the Currency field Deal indicates that the Basis Amount will be defined in the currency of the transaction Currency for Calculation Currency You need to specify the currency to be used for conversion of the taxable amount This option is enabled only if the Calculation Currency Basis is selected as Specific 2 7 ORACLE Tax Currency Basis You need to specify the currency in which the final tax should be computed by the tax subsystem This could either be Specific Deal or Local currency Specific indicates that the final tax would be reported in the currency defined in the Tax Currency field of Tax Rule Maintenance Deal indicates that the final tax reported by the tax subsystem would be in the currency of the transaction Local Currency indicates that the final tax would be comput
39. ed in the local currency of the Branch Currency for Tax Currency This is enabled only if the basis for the Tax Currency is selected as Specific 2 8 ORACLE 2 3 1 Exchange Rate Type Rate Type When maintaining a tax rule you must specify the type of exchange rate that you would like to use to compute tax At your bank you may have defined different types of exchange rates For example you may have defined a Central Bank Rate a Standard Rate a Cash Rate a Travelers Check Rate etc In Oracle FLEXCUBE these rates are referred to as Rate Types Rate Code If you have specified that tax is to be computed as a percentage of the taxable amount you should also specify if the rate to be used is e Buy Rate e Sell Rate e Rate The rate value corresponding to the Rate Type will be applied to the Basis Amount as per the application basis defined slab or tier Basis Percentage You need to specify the factor for computation of the taxable amount The basis percentage should be greater than 0 and less than or equal to 100 The basis amount would first be multiplied by this percentage to arrive at the actual basis amount on which tax needs to be computed The reciprocal of the same factor would then be applied to the calculated tax amount to arrive at the actual tax amount Rounding Details LATUS Rule Code Customer Category Efecve Date suriy Com Category 9 Region
40. enssonsonsonnentes 2 40 2 11 22 Processing Tax MM CONTACTS 2 46 2 11 3 Processing Tax on Customer 2 47 2 11 4 Document Expiry Status Change 2 50 2 12 CHARGING VAT ON NON FINANCIAL eene enn 2 51 2 13 VIEWING FINANCIAL NON FINANCIAL COMMISSION DETAILS eee enne 2 55 YOU CAN TO FILTER YOUR SEARCH BASED ON ANY OF THE FOLLOWING CRITERIA 2 55 WHEN YOU CLICK SEARCH BUTTON THE RECORDS MATCHING THE SPECIFIED SEARCH CRITERIA ARE DISPLAYED R 2 55 2 14 A NOTE ON TAX PROCESSING FOR ROLLOVERS eene een enne nnen enne 2 57 2 15 SPECIFYING EXEMPTION OF TAX ON INTEREST EARNED ON ACCOUNTS DEPOSITS eee 2 58 2 15 1 Featuresof application of DIRT tie sten iE ERI te BERE ERES ed 2 58 2 15 2 Exempting DIRT on interest for Current Savings accounts CASA essere 2 59 2 15 3 Exempting DIRT on interest on deposits eese eene nennen eene nee 2 59 2 16 STATIC MAINTENANCE FOR ADHOC CHARGES COMPONENTS eene enne enne 2 60 2 17 VIEWING CHARGE COMMISSION enne enn enne en enne nnn nnne innen enne 2 61 ORACLE WHEN YOU CLICK SEARCH BUTTON THE RECORDS MATCHING THE SPECIFIED SEARCH CRITERIA ARE DISPLA VED R 2 61 Bi
41. f the Application tool bar and click the adjoining arrow button Financial Ron Financial Commission Summary Transaction Reference Branch Code Number Account ContractReference CustomerNo Number Account Contract Reference Record Status Auth Status amp Search Advanced Search Records per page 1587144 1 0 1 Transaction Reference Number Branch Code Customer No Module Account Contract Reference Number Account A You can to filter your search based on any of the following criteria Transaction Reference Number Customer No Account Contract Reference Auth Status Branch Code Account Contract Record Status When you click Search button the records matching the specified search criteria are displayed Transaction Reference Number Branch Code Customer No Module Account Contract Reference 2 55 ORACLE Account Contract Serial Number Transaction Date Charge Transaction Code Charge Account Currency Charge Component Charge Amount Tax Code Tax Amount Tax Transaction Code Default Waiver Authorization Status Record Status 2 56 ORACLE 2 14 A Note Tax Processing for Rollovers Instead of liquidating a contract on maturity you can roll it over into a new contract The outstanding principal of the old contract can be rolled over with or without the interest outstanding on it When a contract is rolled over renewed it is processed in the following manner
42. first specify if the Basis Amount on which tax is calculated should be taken as a slab or tier Indicate Cumulative by checking the box if the Basis Amount structure is a Tier Leave it blank if the Basis Amount structure is a Slab The following example illustrates how this works Example You have the following Amount Basis cumulative structure for a Tax Rule defined for tax on the deal amount Amount Rate 0 to 250 000 1 gt 250 000 lt 1 Million 2 gt 1 Million lt 3 Million 2 5 gt 3 Million 3 When this tax rule is applied on a deal of USD 1 5 million the rate of tax will be calculated depending on whether the Amount Basis has been defined as a slab or as a tier The different methods are calculated as follows 2 15 ORACLE Tier basis The first 250 000 will be taxed at 1 Amount from 250 001 to 1 000 000 at 2 Amount from 1 000 001 to 1 500 000 at 2 5 Slab basis The entire USD 1 5M will be taxed at 2 5 Basis Amount To You should specify the upper limit of the slab or tier to which a particular rate or amount should be applied as tax Example Suppose the following is the slab or tier structure you want to specify Amount Rate 0 to 250 thousand 1 gt 250 thousand lt 1 Million 2 gt 1 Million lt 3 Million 2 5 gt Million 3 The Basis Amount To for the first slab or tier should be indicated as 250 000 and t
43. g the specified search criteria are displayed Authorization Status Record Status Charge Commission Code Charge Commission GL Account Charge Commission Description Rate 2 61 ORACLE 3 1 3 Reports Tax Payable Report The Tax Payable Report gives details of all taxes that are to be paid over a period in time You can specify the period for which you require the report when you invoke the report function In the Application Browser this report is available under the Modularity Tax module To invoke this screen type TARAYABL in the field at top right corner of the Application tool bar and click the adjoining arrow button Tax Payable Report Record preferences Rule Account From Date To Date Contents of the Events Log The contents of this report are discussed under the following heads Header The Header carries the title of the report information on the branch code the ID of the user who generated the report the date and time at which it was generated the branch date the modules covered in the report Body of the report The following details are displayed in the report Rule The rule of the transaction Account The account class of the transaction Currency The currency of the transaction 3 1 ORACLE The period of the transaction from when the tax has to be paid To The period of the transaction till when t
44. gain be rounded using the Tax Currency rounding parameters gt Now the Customer group Tax Waiver Maintenance would be verified to check if some waiver has been maintained for the Customer Group Customer Tax Category Product combination If a Waiver Rule has been maintained then the waiver amount would be computed by applying the waiver percentage to the tax amount gt The waiver amount would be subtracted from the tax amount gt The net tax amount post waiver would again be rounded using the tax currency rounding parameters to arrive at the final tax amount to be charged to the customer account 2 11 3 Processing Tax on Customer Accounts In order to process tax in customer accounts the tax formula has to be maintained in the IC Rule Maintenance screen The Periodicity in the Tax formula Formula2 should always be set to Periodic The tax rounding parameters would be maintained at the Rule level An IC Rule would also be maintained for a Tax Category The parameters maintained in the IC Rule Maintenance would be as follows 2 47 ORACLE gt Tax Category gt Rounding parameters for Basis Amount and Tax Amount gt Basis Amount Percentage gt Local Currency Basis to specify whether the Basis Amount should be in local currency or account currency gt Tax Payable Currency gt Whether to Book Tax to Expense Account or not e The tax amount on the credit interest for the account would be calculated based on the Rule Mainten
45. gal Mainland This means that the tax code referring to country PRT Portugal Region Mainland Portugal will apply If the Proof of Non Resident status is registered and is valid and the customer is a resident in an ADT country and the Certificate for ADT is not registered or is not valid then the tax code to be applied will be calculated as if they were residents other countries If Proof of Non resident Status and ADT Certificate expire you should consider the following on taxing the customer Proof of non resident status submitted and not expired Proof of non resident status and ADT certificate submitted amp both docs not expired Proof of non resident status expired Proof of non resident status and ADT certificate expired Proof of non resident status is valid Only ADT certificate expired 2 50 ORACLE e Proof of non resident status expired Only ADT certificate valid e Proof of non resident status not submitted e Both proof of non resident status and ADT certificate not submitted e Valid proof of non resident status submitted and ADT certificate not submitted e Proof of non resident status not submitted and valid ADT certificate submitted The status change due to document expiry does not apply to a resident customer 2 11 4 1 Processing Batch In the batch process system checks for the expiry date of the relevant documents If the expiry date of the document has arrived then the system automatically checks the flag of
46. hat for the second slab or tier as 1 000 000 and so on If you are to calculate cumulative tax on an amount of USD 300 000 then on 250 000 you would calculate tax at 1 which amounts to USD 2500 On the remaining 50 000 you apply tax at 2 which amounts to USD 1000 The total tax applicable would therefore be USD 3500 In a non cumulative or slab structure of tax application you will apply 2 on USD 300 000 which works out to USD 6000 Flat Amount and Rate If the tax is in the form of a flat amount you should specify the actual amount This amount will be applied on the corresponding Basis Amount To depending on whether you have specified the application basis as a slab or a tier If the tax rule computes tax on the basis of a rate you have to specify the actual rate value The rule uses the rate entered against each slab or tier to calculate tax for contracts on which the rule is applied Floor Amount The floor amount should be specified only if the Amount Basis Cumulative is a tier This will be the upper limit of the previous tier By default the amount specified as the Basis Amount To for the previous tier limit will be displayed This need not be specified for the first limit in the tier 2 16 ORACLE This amount is used to calculate the tax along with the Floor Charge Floor Charge The Floor Charge is applicable only if the Amount Basis is a tier This is the tax amount to be considered for the previous tier l
47. have a tax code LC Tenor and LC Amount Extension 1 If there is an extension in the LC tenor Example If the original guarantee is issued for a tenor of 6 months the system is expected to pick up the Tax Code IS GAR 1Y and charge the user with 0 04 Stamp Duty At the end of 6 months the same guarantee is extended and will have a tenor of 2 years Tenor will be from the value date to the maturity date When the tenor of guarantee is extended for 2 years it should be charged tax based on Tax Code IS GAR 1Y5Y with 0 50 Stamp Duty 2 If there is an extension the LC Amount Example If LC amount extension occurs due to the AMND event then tax will also be calculated on the incremental guarantee amount and or the incremental commission on guarantee amount 3 For the tenor which is less than a year Example When you want to maintain a tax rule with the tenor which is less than 1 year i e in months and days you should still select the Tenor Type as Year and check the checkbox for this slab in the Round Up column option as shown in the screenshot below In this case the you can create a tax rule code with 1st slab of tenor as Tenor From Tenor Up to Tenor Type Round Up Check Box 2 19 ORACLE 0 1 Year Checked At the time of actual contract with a tenor less than 1 year say 5 months and 10 days system will automatically consider it as whole number of months for calc
48. he tax has to be paid Reference No The contract reference number Value Date The value date of the transaction Amount The amount payable 3 2 Report You can generate reports on tax from the Tax Report screen To invoke this screen type TARTAXRP in the field at top right corner of the Application tool bar and click the adjoining arrow button a3 Customer No Date Range From Date Date 5 Report Format PDF PrinterAt Client x Report Output Print Printer 23 Branch Code Select the branch code for which you want to generate the report from the adjoining option list From and To Date Specify the From and To date of the report Customer Number Select the customer no for which you want to generate the report from the adjoining option list The following information will be available in this report e Customer ID 3 2 ORACLE e Portuguese Tax ID Number e Account Number or the Contract Number e Account Number or the Contact Number Currency e Journal Number e Operation Date e Payment Date e GL Accounting Date e Tax GL Account e Component e Component Description e Central Authorities Report Code e of Tax Applied e Code e Operation with Exemption or Reduction e f Exempt or Reduced Exemption Reason e Basis Amount Currency e Base
49. hether or not aggregation of tax for all transactions under the selected Tax category is required If this option is checked the entire tax allowance utilized by the customer is calculated even if it exceeds the allowable limit for that tax period If this option is unchecked the tax allowance utilized by the customer is calculated only till the maximum amount of the allowable limit is reached Consolidated Certificate Required You need to indicate whether or not Consolidated Tax Certificate is required for all transactions in a given tax cycle This option would work in conjunction with a similar option in the Customer Information Maintenance screen and the Tax Details screen accessed from the Branch Parameters Details screen The message type for consolidated tax certificate would be CONSOL_TAX_CERT Depending on the periodicity maintained at the branch level the system will generate the Consolidated Tax Certificate for a customer if Consolidated Tax Certificate Generation is required at the Customer level and the same is maintained at the Tax Category level There is a pre shipped advice format for generating a Consolidated Tax Certificate The certificate will be printed Year to Date basis The Certificate would include tax due on transactions for LD MM and IC products 2 2 ORACLE Following elements will be available for advice generation for tax summary Element Name Description Data Type
50. his flag displays the waiver details for the customer for the specific tax code type This is defaulted from the customer maintenance screen Waiver This flag displays the same value as default waiver However user can choose to modify this flag by either checking the checkbox i e choosing to waive tax for that rule or un checking the checkbox i e choosing to apply tax for that rule Exemption Code This field displays the exemption code for the specific tax code type This is defaulted from the customer maintenance screen Rate This field displays the rate applicable for the specific tax rule GL Code This field displays the GL code for the tax code as defined as defined in tax code GL mapping You can view the following amount details e Value Date e Transaction Date e Currency e Amount e Event Sequence Number 2 45 ORACLE 2 11 2 Processing Tax MM contracts The tax processing for MM contracts would occur as follows e First the Waiver maintenance for Interest Rate Period Amount defined at the at the LD MM product level would be checked The tax would be fully waived if any one of the following conditions was satisfied e Interest rate pertaining to Interest Rate Code defined in the Tax Definition of LD MM product is more than the contract interest rate for the Basis Amount The interest period for the current interest being liquidated is more than the interest period defined in the Tax definition of LD MM
51. ils screen Tax Details Contract Reference Scheme Waiver Rule Details 10f1 E Basis Component Code Type Default Waiver Exemption Code Rate 2 4 Amount Details 10f1 Value Date Transaction Date Event Sequence Number 8 You can view the following details Contract Reference The system displays the reference number of the contract for which the tax details are being viewed Scheme The system displays the scheme Waiver Check this box to waive the taxes for the contract You have a choice of waiving tax due to all the Tax Rule s linked to the Tax Scheme applicable to the product and hence the contract or that which is only due to specific Tax Rule s Only the tax that has not yet been liquidated can be waived 2 44 ORACLE In addition to that you can view the following rule details Rule This field displays the rule code of the rule that has been defaulted from the scheme linked to the product Basis Component this field displays the basis component on which the tax will be applied This is defaulted from the product Event This field displays the event for which the tax will be applied This is defaulted from the product Tax Code This field displays the tax code for the rule as defined in tax rule maintenance Tax Code Type This field displays the tax code type of the tax code as defined in tax code GL mapping Default Waiver T
52. imit This amount is used along with the Floor Amount that you specify to arrive at the tax The floor charge need not be specified for the first limit in the tier This amount may not always be the same as the amount calculated using the Basis Amount To and the Rate for the previous slab However if not specified the Floor charge is calculated based on the rate for the previous tier and the Floor amount for the current tier An example for the calculation of tax based on a tier structure Tax is applied on the deal amount of a deal based on the following structure gt 0 lt 10 000 0 05 gt 10 000 lt 20 000 0 06 gt 20 000 0 08 The following will be the specifications in the Tax Rule Maintenance screen Basis Amount Rate Floor Amount Floor Charge 10 000 upper limit of the first tier 0 05 0 0 20 000 0 06 10 000 upper limit X tax amount that will be of the first tier considered for the first tier 999999999 a big amount since 0 08 20 000 upper limit Y tax amount that will be there is no upper limit for the third of the second tier considered for the earlier slab slabs When this tax rule is applied on a deal tax will be calculated depending on the component amount example brokerage paid as follows If the component amount is USD 5 000 it falls in the first tier The tax amount will be calculated in the following manner Amount USD 5 000 Tax 0 05 of U
53. iplica CumencyDetzis Rounding samina Ameis Tenor fb Min Minimum Amount Amount Exempt Ruia Fiji Row iR Anani Tie A tax can be percentage of the component that is to be taxed such as the principal brokerage etc or a flat amount If you opt to calculate tax as a flat amount choose the Flat option If instead you opt to calculate tax as a percentage of the transaction amount choose the Rate option If tax is to be calculated as a flat amount specify the flat amount Amount limits for a tax rate If you have specified a percentage of tax for the rule you should also specify the maximum and minimum amounts in the local currency within which the amount calculated using the tax rate should fall Example For tax rule TX01 you have maintained the following details Code TX01 Tax Currency Deal CCY Tax Type Rate Rate 1 5 Min Amount 1 000 Max Amount 10 000 2 12 ORACLE This tax rule is applied on securities deal The deal currency is USD and the local currency is EUR The exchange rate between the two currencies is 1 9 where 1 9 units of USD is equal to 1 EUR The amount involved in the deal is 90 000 USD and tax has to be paid in USD Assume that tax is levied on the deal amount in your country Before tax is applied on the deal the minimum and maximum amounts are converted into
54. ized By Modification Authorized Date Time Date Time Number Open Before defining the attributes of a Transaction Tax Class assign the class a unique identifier called the Class Code and briefly describe the class On authorization of tax class system creates an accounting role and associated amount tag Accounting role is created as tax class name PRT and Amount tag is created as tax class name LIQD A description would help easily identify a class Module A tax class is built for use in a specific module This is because the basis amounts on which the tax is applied could vary with the modules In the Foreign Exchange module for instance you might want to levy tax on the brokerage paid In the Securities module you might have to pay a tax on the value of a security that you purchase The basis on which the tax component is calculated is different in these two cases o The Basis Amount Tags available in this screen would depend on the module for which you build the class Tax The type of tax indicates who bears the tax whether the bank or the customer 2 27 ORACLE Withholding Withholding type tax is borne by the beneficiary on an income either the bank or the customer For example the tax on the brokerage paid would be borne by the broker You withhold this component in a Tax Payable account by debiting the customer account since brokers are defined as Customers in Oracle FLEXCUBE and later paying the t
55. l customers However regulations may require you to waive DIRT for accounts or deposits held by certain customer categories Customers belonging to such categories will typically produce relevant exemption certificates from tax authorities DIRT is to be deducted by you for a customer account or deposit till such time as the customer produces the exemption certificate and again beyond the validity of the exemption certificate Therefore it is possible for a customer account or deposit to keep moving in and out of DIRT exempt status Such movements are tracked by Oracle FLEXCUBE s audit trail o DIRT exemption is always with prospective and not retrospective effect Example The Sisters of Charity a customer belonging to the DIRT exempt category opens a three year term deposit on 01 Jan 2003 but does not produce the exemption certificate immediately At the time of yearly capitalization on 31 Dec 2003 DIRT is deducted from the interest on the deposit and the net amount Principal Accrued Interest DIRT is capitalized The Sisters of Charity produces the exemption certificate on 15 Jan 2004 the certificate being valid from 01 Jul 2003 The DIRT deducted for the year ended 31 Dec 2003 is not rolled back DIRT exemption applies for the period starting 15 Jan 2004 The exemption certificate produced by The Sisters of Charity is valid up to 15 Aug 2004 DIRT becomes applicable once again from 16 Aug 2004 So the amount rolled over duri
56. ll be shown here M Customer Customer Address _ADD4_ Address 4 will be shown here M Customer ID will be _CUST_ Customer ID shown here M Portuguese Tax ID Tax ID will be shown _PORTTAXID_ Number here M NIB NIB identification will _NIBID_ identification be shown here M Advice Date Advice Date will be _ADVICEDATE_ of Issue shown here M Type of Advice Debit Type of Advice will _ADVICETYPE_ Credit Both be shown here M 3 6 ORACLE 3 5 Contract Reference Contract Reference Number Number wherever wherever applicable will be CONTREFNO applicable shown here Transaction Transaction Reference Reference Number Number wherever wherever applicable will be TXNREFNO applicable shown here Value Date will be VALDATE Value Date shown here Transaction Transaction Description will be TXNDESC Description shown here Tax Rate if Tax Rate if transaction transaction is taxed _TAXRT_ is taxed will be shown here Tax Amount if Tax Amount if transaction transaction is taxed _TAXAMT_ is taxed will be shown here Currency will be _CCY_ Currency shown here Base Base Amount will be _TXNAMT_ Amount shown here Dr Cr Dr Cr Indicator will _DRCRIND_ Indicator be shown here Exemption Reason if Exemption Reason tax is if tax is exempt will TAXEXREAS exempt be shown here Reversal and Recalculation of Tax and Charges You can reverse and recalc
57. money market and trade finance transactions e Schemes which cater to Securities and Derivative taxation These tax schemes involve a combination of tax classes For instance a security could consist of one or more issuer tax components a tax on coupons and a tax on redemption You can define these components as tax classes Since a Securities Derivatives tax scheme is composed of one or more tax classes by associating a tax scheme with a market you can compute all the tax components for the securities used from the market The manner in which you can maintain Money and Security Derivative scheme types has been discussed in detail in the subsequent sections Defining Securities and Derivative taxation schemes A contract that you enter into could consist of one or more tax components a Stock Exchange tax a Local tax etc You can define each of these components as a tax class and associate each with a tax rule A tax rule identifies the method in which a tax component is calculated A tax scheme is composed of one or more tax classes For instance a Transaction Level Tax Scheme would be composed of one or more transaction level tax classes By associating a Tax Scheme with a product you can calculate all the tax components for the contracts entered under the product at one stroke Tax schemes can be built in the Tax Scheme Maintenance screen You can invoke this screen by typing TADSCHEM in the field at the top right corne
58. mount The final tax amount thus would be EUR 8 100 50 EUR 16 Now the Customer Tax Group Waiver of 2095 would be applied on the net tax amount The waived amount would thus be EUR 16 20 100 EUR 3 2 Thus the Net Tax Amount EUR 16 3 2 EUR 12 8 2 49 ORACLE This is the final tax amount This tax amount would again be rounded using the tax currency rounding rule Truncate Thus the final tax amount to be charged to the customer would be equivalent of EUR 12 2 11 4 Document Expiry Status Change The status change due to document expiry is applicable for Income Tax Value Added Tax The status change due to document expiry for Income tax is applicable for the following modules Foreign Exchange Money Market Derivatives CASA Loan Syndication The status change due to document expiry for VAT is applicable for the following modules Funds Transfer Standing Instructions Payments and Collections Letters of Credit Foreign Exchange Derivatives Money Market CASA Retail Lending Loan Syndication For a non resident customer the tax status determination is based on the documents related to Proof of Non Residential Status and Certificate for ADT are registered at customer level are valid If the customer is a non resident and the Proof of Non Resident status is not registered or is not valid then the Tax Code to be applied to the non resident customers should be calculated as if they were residents in Portu
59. n be maintained in the Tax Rates Input screen You can invoke this screen by typing TADRATE in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button 2 33 ORACLE Tax Rates Input Rate Code Basis Amount Currency Beneficiary Country Benificary Customer Number Exchange Rate Type Tax Effective Date Rate Code Description Currency Description Beneficiary Country Name Beneficiary Customer Name Rate Type Description Tax Currency Name Exchange Rate Category Mid v Tax Rate Input By Date Time Authorized By Modification Authorized Date Time Number onen For a rate code you can enter the following details The Basis Amount Currency The basis the coupon amount the cash dividend amount etc on which a tax is calculated is referred to as the Basis Amount You can specify the currency of the Basis Amount The Beneficiary Country Issuer Tax Rates are specific to markets When maintaining a rate value for a code you have to identify the market for which you are defining the rate The Beneficiary CIF You can maintain unique tax rates for issuers of securities When you maintain a security the system applies the tax rate defined for the issuer If you have not maintained a rate for an issuer the system applies the rate maintained for the country to which issuer
60. nce It also lists the various chapters covered in this User Manual Chapter 2 Building Tax Components explains how tax rules tax classes and tax schemes are defined in Oracle FLEXCUBE Conventions Used in this Manual Important information is preceded with the symbol Glossary of Icons This User Manual may refer to all or some of the following icons Icons Function New Copy Save Pa Delete G Unlock Print A Close 1 1 ORACLE Icons Function gt p Reverse Template Roll over MN M Hold E Authorize amp Liquidate Exit Sign off Add row i Delete row Option List u ith Confirm a Enter Query t UJ F Execute Query Refer the Procedures User Manual for further details about the icons Related Documents For further information on procedures discussed in the manual refer to the Oracle FLEXCUBE manuals on e Common Procedures e Products 1 2 ORACLE 2 1 2 1 1 2 2 2 Building Tax Components Introduction This chapter explains the processing of tax to be paid to the Government due to the transactions that you enter into with your customers This type of tax is processed as an Expense type of tax whereby you book the tax component into a
61. nd authorized are maintained in the system Specify the tax category from the option list provided for the given Tax Rule If the tax category is not maintained then the tax booked under this Tax Rule will not be considered for tax waiver tax allowance processing However normal tax processing as it happens today in Oracle FLEXCUBE will continue to happen Effective Date Every tax rule is associated with an Effective Date On the specified Effective Date the rule becomes applicable When more than one rule is linked to a Tax Scheme a rule will be applied till the next rule for the same component with a different Effective Date is encountered Example The following example illustrates how the different rules in a Tax Scheme are applied You have defined the following Tax Rules only the fields relevant to the example are discussed Tax Rule 1 Rule Code TxD1 2 6 ORACLE Effective Date 1 January 1999 Component Brokerage Tax Rate 0 5 Tax Rule 2 Rule Code TxD2 Effective Date 1 April 1999 Component Brokerage Tax Rate 0 75 When these rules are linked to a single tax scheme the tax will be applied in the following manner From 1 January 1999 to 31 March 1999 the brokerage paid on contracts will be taxed at 0 5 From 1 April 1999 onwards the brokerage paid will be taxed at 0 75 Brokerage will continue to be taxed at 0 75 till another rule with a different Eff
62. ng yearly capitalization on 31 Dec 2004 is Rolled over amount as on 31 Dec 2003 Interest for the year 2004 DIRT for the period 01 Jan 2004 to 14 Jan 2004 DIRT for the period 16 Aug 2004 to 31 Dec 2004 2 58 ORACLE 2 15 2 Exempting DIRT on interest for Current Savings accounts CASA In order to waive DIRT on interest earned on CASA you have to first build the DIRT exempt SDE into an interest rule build an interest product using that rule and attach the product to the relevant account Refer to the Maintaining System Data Elements and Maintaining Interest Rules chapters of the Interest and Charges user manual for details on the above Invoke the DIRT Exemption Details screen from the Application Browser Account Number z Account Details E E o Effective Date Dirt Exempt Reason Text Additional Text o AHG Fields i Cancel Select the relevant account number which you wish to specify as DIRT exempt from the list of values Select the DIRT Exempt option to mark the account for exemption from DIRT on interest earned You have to enter the date from which DIRT exemption is to take effect You also need to select the reason for DIRT exemption from the list of values built into Oracle FLEXCUBE Additionally Oracle FLEXCUBE gives you the facility for capturing any pertinent additional information as text You need to visit this screen
63. ntained in its corresponding section of the Tax Class Maintenance screen invoked from the Application Browser STOP nt Please note that it is not necessary to associate tax rules to an Issuer Tax class For Issuer Tax component you only have to furnish the following details e The Association Event e The Basis Amount e The Rate Code e Other operational controls 2 31 ORACLE Tax Class Maintenance Class Code Class Description Module Description Transaction Level Tax Issuer Tax Event For Association Basis Component Default Rate Code laz C Default Waiver C Allow Rate Code C Amend After Association Amendment Input By Authorized By Modification Authorized Date Time Date Time Number pen 2 9 3 Defining the Events and the Basis Amount A security goes through different stages in its life cycle such as e Booking e Interest Accrual e Liquidation etc Each stage is referred to as an Event in Oracle FLEXCUBE When defining an Issuer Tax class you should specify the following e The Association Event e Basis Amount The event at which you would like to associate a tax component to a security is referred to as the Association Event The basis on which interest charge or tax is calculated or levied is referred to as the Basis Amount An Issuer Tax can be on the basis of the coupon paid or on a cash dividend The different basis amounts available in the Sec
64. on Description Charge Commission GL Account Rate Maker Date Time Checker Date Time Mod No Record Status You can capture the following here Charge Commission Code Specify the charge or commission code here Charge Commission Description Give a brief description on the charge commission Charge Commission GL Account Select the relevant GL account from the adjoining option list Rate Specify the rate for the charge commission code specified 2 60 ORACLE 2 17 Viewing Charge Commission Details You can view the details maintained in the Charge Commission Details Maintenance screen in the Charge Commission Details Summary screen To invoke this screen type CFSADCMT in the field at the top right corner of the Application tool bar and click the adjoining arrow button Charge Commission Details Summary Authorization Status v Record Status Charge Commission Code PH Charge Commission Charge Commission GL az Description Account Rate a Search Advanced Search Reset Records per page 15 bei 4411 Of 4 ii Authorization Status Record Status Charge Commission Code Charge Commission Description Charge Commissionli You can to filter your search based on any of the following criteria Authorization Status Record Status Charge Commission Code Charge Commission GL Account Charge Commission Description Rate When you click Search button the records matchin
65. onent is passed The event at which the tax component is actually computed is referred to as the Application Event The tax is liquidated at the Liquidation Event The basis on which a tax is calculated is referred to as the Basis Amount A tax can be on the basis of the principal the brokerage paid and so on When building a tax class you have to specify the tag associated with the Basis Amount Choosing the Default Tax Rule A tax rule can be linked to the tax component that you are building When you link a rule to a component the attributes that you have defined for the rule will default to the component A tax rule identifies the method in which tax is to be calculated A rule is built with attributes such as the following e tax currency e Whether the tax is to be a flat amount or calculated a rate basis e The minimum and maximum tax that can be applied e tier or slab structure on which the tax is to be applied e The currency restrictions etc The tax component to which you link a rule acquires ITS properties Tax for the contracts with which you associate a tax component will by default be calculated according to the rule linked to the component However when processing a contract you can choose to waive the rule When building a tax class you can choose to allow the amendment of the rule linked to it under the following conditions e You can choose to allow amendment after the association event e Y
66. onent is available for marking off as non applicable during DIRT exemption maintenance you will have to select the exemption allowed option for that component while maintaining its tax rule Cumulative There are two ways of applying tax e Cumulative 2 13 ORACLE e Non cumulative In a cumulative structure the rate of tax will be calculated in a cumulative manner where the tax of the previous slab is added to the tax of the next In a non cumulative structure the tax of the previous slab will not be added to the tax of the next slab Only the rate applicable to that particular slab will be applied If you check this field the cumulative method of applying tax will be used if you leave this field blank the non cumulative type of tax will be used while calculating the tax By default non cumulative processing is done for tax Slab Select the applicable slab The options are e Amount e Tenor 2 14 ORACLE 2 3 3 Amount Slab Click Amount Slab tab to capture amount related to tax slab details Rube haisian Ruk Code Desken Category irgi Enic Die County Come Category Coss Gumeng Details Rounding Additional amount sah Stab Slab 10 m Bi Ameer To Aue Ate er Charge 2 3 3 1 Tax Slab You can define the tax that you would like to apply to a contract in terms of a tier or a slab structure Through this screen
67. ou can choose to allow amendment after the application event e You can choose to allow amendment of the tax amount 2 29 ORACLE Including Component in SWIFT Messages To report a component of a contract in the SWIFT messages that you generate identify the component with the appropriate SWIFT code You can identify a tax component with its SWIFT code when building the component Example You would like to report the details of a contract to a customer over SWIFT Assume you would like to report the tax component amongst others in the message that you generate Each component is identified in SWIFT by a unique code Even while building the tax component in the Tax Class Maintenance screen you can identify it with its SWIFT Code 2 30 ORACLE In the SWIFT Qualifier field of the Tax Class Maintenance screen you can enter the component identifier as follows If the tax component you are building is Enter a Country National Federal tax COUN a Payment Levy sort of tax LEVY a Local tax LOCL a Stock Exchange tax STEX a Transfer tax TRANSACTION a Transaction tax TRAX a Value Added tax VATA a Withholding tax WITH 2 9 2 Defining Issuer Taxes as Classes An issuer tax can be levied on the coupon paid or on a cash dividend The issuer of a security determines the tax To process the tax levied on a security you have to maintain Issuer Tax classes An Issuer Tax class can be mai
68. product This would be applicable only for deposit and borrowing type of products The total interest amount on which tax has to be computed is less than the minimum interest amount defined in the Tax Definition of LD MM product This is also applicable for deposit and borrowing type of products e category is linked to a Tax Rule the Waiver parameters have not been defined then a configurable override would be shown Incase the Waiver conditions defined are not satisfied the tax computation would be done as follows This computation would be done only for Deposit LD and Borrowing MM type of products 2 46 ORACLE gt First the actual basis amount would be arrived at based on the Basis Percentage defined in Tax Rule Maintenance gt This Basis Amount would be rounded using the currency rounding parameters gt Then the availability of Tax Free Allowance at the contract level would be verified If the Limit has been defined then availability of the same would be verified in the sequence in which it has been defined In case the Tax Free Allowance has not been defined at the contract level the same would be verified at the Customer level If the Tax Free Allowance is available the same would be reduced from the taxable amount Basis Amount to arrive at the Net Taxable Amount If the contract currency and the tax free allowance currency are different the Basis Amount would be converted to the Tax free Amount
69. r REPORTS c o 3 1 3 1 PAYABLE REPORT RR 3 1 3 1 1 Contents of the Events 3 1 3 2 AXR POR T PEE 3 2 3 3 gesti d oaei e a a A E a E a R o a aE AAE aed 3 4 YOU CAN TO FILTER YOUR SEARCH BASED ON ANY OF THE FOLLOWING 3 4 WHEN YOU CLICK SEARCH BUTTON THE RECORDS MATCHING THE SPECIFIED SEARCH CRITERIA ARE DISPLA VED RR 3 5 3 4 PAID VICES eo ca detract EET LT 3 5 3 5 REVERSAL AND RECALCULATION OF TAX AND CHARGES ccccccccecesececececesecececeseceseceseceseceseseseeeseeseeeeeeeess 3 7 4 SCREEN GLOSSARY scscsiscscsnssccevcdbecsossessosensecsssendecessvesovessedessoeseecesuscoecestssevcssessescessucosshsedsvecesisseusocecsssvdsosesse 4 1 4 1 FUNG TION ID LIST EHE 4 1 ORACLE 1 1 1 2 1 3 1 4 1 5 1 About this Manual Introduction This manual is designed to help you maintain and process taxes on the contracts you process in Oracle FLEXCUBE You can further obtain information specific to a particular field by placing the cursor on the relevant field and striking lt F1 gt the keyboard Audience This manual is intended for the officers at your bank who set up tax components Organization This manual is organized as follows Chapter 1 About this Manual gives information on the intended audie
70. r of the Application tool bar and clicking the adjoining arrow button Scheme Code Description Fields Cancel 2 36 ORACLE Specify the following details Scheme Code and Description You must identify a Tax Scheme that you build with a unique Code and a brief Description A tax scheme is built specifically for a module in Oracle FLEXCUBE For example a scheme with Stock Exchange tax classes would only be relevant to the Securities module When you define a product in a module only those tax schemes that you have built specifically for the module will be available to you Rule Specify the rules to be associated with the tax scheme Select the appropriate one from the option list 2 10 1 1 How a Scheme Works class in scheme will remain effective till another class for the same component but with a different Effective Date is encountered The following example illustrates how the different classes in a tax scheme defined for the same component is applied Example You have defined the following Tax classes only the fields relevant to the example are discussed Tax Class 1 Class Code Brok clas1 Effective Date 1 January 1999 defined for the associated tax rule Basis Amount Brokerage Amount Tax Rate 0 5926 defined for the associated tax rule Tax Class 2 Class Code Brok clas2 Effective Date 1 April 1999 defined for the associated
71. se type of tax and the tax component is booked to a tax expense account Example For an LC it is always the bank which bears the tax Hence a tax that is levied always falls under an Expense type The tax is debited from an expense account and put in a tax payable account from where it is subsequently paid to the government The tax details specified for product will be automatically applied on all contracts involving the product However while processing a contract you can waive the application of all or specific tax rules for the contract Minimum Interest Rate Code for Tax This field is appears only for LD and MM product maintenance You need to specify the rate code that will be used to determine the minimum interest rate for the tax to be applicable If the rate code is not defined then the minimum interest rate will be taken as 0 2 11 1 2 Specifying Currency Details Currency This field appears only for LD and MM product maintenance You need to specify the currency for which the tax waiver rules maximum interest period and minimum interest amount should be defined Maximum Interest Period for Tax This field appears only for LD and MM product maintenance 2 42 ORACLE You need to specify the interest period beyond which tax the interest amount liquidated would be waived The maximum interest period would be applicable only for Deposit type of products for LD and Borrowing type of products for the MM mo
72. shira 400 063 India Worldwide Inquiries Phone 91 22 6718 3000 Fax 91 22 6718 3001 www oracle com financialservices Copyright 2007 2013 Oracle and or its affiliates All rights reserved Oracle and Java are registered trademarks of Oracle and or its affiliates Other names may be trademarks of their respective owners U S GOVERNMENT END USERS Oracle programs including any operating system integrated software any programs installed on the hardware and or documentation delivered to U S Government end users are commercial computer software pursuant to the applicable Federal Acquisition Regulation and agency specific supplemental regulations As such use duplication disclosure modification and adaptation of the programs including any operating system integrated software any programs installed on the hardware and or documentation shall be subject to license terms and license restrictions applicable to the programs No other rights are granted to the U S Government This software or hardware is developed for general use in a variety of information management applications It is not developed or intended for use in any inherently dangerous applications including applications that may create a risk of personal injury If you use this software or hardware in dangerous applications then you shall be responsible to take all appropriate failsafe backup redundancy and other measures to ensure its safe use Oracle Corpor
73. tax rule Basis Amount Brokerage Amount Tax Rate 0 7596 defined for the associated tax rule When these classes are linked to a single tax scheme the tax will be applied in the following manner 2 37 ORACLE 2 10 1 2 From 1 January 1999 to 31 March 1999 the brokerage paid on contracts will be taxed at 0 5 From 1 April 1999 onwards the brokerage paid will be taxed at 0 75 Brokerage will continue to be taxed at 0 75 till another class with a different Effective Date is added to the scheme Putting a Component in a Scheme on hold You can choose to keep one or more tax components in a scheme on hold When you associate the scheme with a product those tax components that are on hold will not apply on contracts entered under the product This status can be changed at any time 2 10 2 Defining a Money Taxation scheme Any transaction on which tax is applicable is linked to a Tax Scheme A Tax Scheme describes the method in which the tax has to be applied on a transaction A tax scheme can have a number of Tax Rules linked to it The attributes of all these rules will be applied on the transaction Thus a Tax Rule is made applicable on a contract through the Tax Scheme For instance let assume we are building a tax scheme which should be used for the Funds Transfer module of Oracle FLEXCUBE You have defined the following Tax Rules only the fields relevant to the example are discussed
74. the deal currency USD as follows Min Amount USD 1900 EUR 1000 1 9 Max Amount USD 19000 EUR 10000 1 9 The tax amount for this deal is calculated as follows 90000 1 5 100 USD 1 350 tax amount As this amount is less than the Minimum Tax Amount specified for this tax rule a tax of 1 900 USD will be levied on the deal instead of USD 1350 On the other hand if the tax calculated was more than the maximum tax amount USD 19 000 would be applied as tax since that is the maximum possible tax that can be levied If you have specified a flat amount for the tax rule then you need not specify the minimum and maximum amount limits Qu minimum and maximum limits apply for specific rules linked to a Tax Scheme and not for the entire scheme Tax Flat If you opt to calculate tax as a flat amount choose the Flat option Rate You can specify the percentage in the Rate field This Rate is applied on the amount to be taxed to calculate the tax amount Exemption Allowed Deposit Interest Retention Tax DIRT is payable on interest on deposits and accounts Customers belonging to certain customer categories can be exempt from paying DIRT As part of the DIRT exemption maintenance you need to indicate such deposits and accounts which will not attract DIRT While doing so you will have to mark off specific tax components which you do not wish to be applicable to the account deposit In order that a particular tax comp
75. the relevant document as a part of batch impact On resubmission of the document if the customer is unlocked and the expiry date of the documents is extended system will uncheck the flags automatically on save of customer In a case where the document s get expired the system checks the flags and this will in turn uncheck the Exemption of VAT and Exemption of Income Tax which are also present in the main tab in the Customer Maintenance Screen STDCIF If the document s gets expired and if the Exemption of VAT and Exemption of Income Tax are originally unchecked they will continue to remain unchecked This impacts the tax status exempt tax at each of the contract level of this customer For existing contracts this will apply for all the future events and for a new contract this will be applicable as is the current resolution When the documents are resubmitted you have to unlock the customer and extend the expiry date of the relevant document The system will uncheck the document expiry flags Proof of non resident status and ADT Certificate automatically on save of customer In this case the Exemption of VAT and Exemption of Income Tax will also be automatically checked or unchecked as per the requirement 2 12 Charging VAT on Non financial Commission You can maintain the details at the time of charging the customer with Stamp Duty on Financial Commission or VAT on Non Financial Commission in Financial Non Financial Commission
76. ts depending on whether the next decimal place exceeds or is less than 5 Decimals for rounding for Calculation Currency This field is enabled only if the calculation currency rounding option is selected as Specific You need to specify the decimal up to which the rounding truncation needs to be done The rounding decimal defined here should be less that or equal to the decimal defined in Currency Maintenance Units for rounding for Calculation Currency This field is enabled only if the calculation currency rounding option is selected as Specific You need to specify the unit up to which the amount needs to be rounded The unit defined here should be a multiple of the unit defined in Currency Maintenance Rounding Option for Tax Currency You need to specify the rounding option for conversion of the amount to tax currency It could either be Currency Default or Specific Currency Default indicates that the rounding details would be taken from the rounding parameters defined in Currency Maintenance Specific indicates that the rounding parameter would be defined picked up from the Tax Rule Rounding Method for Tax Currency This field is enabled only if the Calculation Currency Rounding Option is selected as Specific You need to specify the rounding method to be used for the defining the tax amount The available methods are 2 10 ORACLE e Truncate e Round Up e Round Down e Round Near Truncate indicates th
77. ulate the charges and the tax collected on these charges To invoke this screen type TADREVRC in the field at top right corner of the Application tool bar and click the adjoining arrow button 3 7 ORACLE Tax and Charge reversal and recalculation Branch 000 Version 4 ot Customer From Date To Date Account Contract Reference 23 Alternate Branch Alternate Account Number Module X 14 4 10 10 Checker Authorization Status DateTime DateTime Branch The system defaults the branch code Customer Select the customer number from the adjoining option list Module Select the module from the adjoining drop down list Account Contract Reference Select the account or contract reference number from the adjoining option list From and To Date Specify the From and To date Option to default charge and tax details for date range by specifying From date and To date is applicable for all modules except PC CASA and ADHOC type reversal 3 8 ORACLE Alternate Branch Select the alternate branch from the adjoining option list Alternate Account Number Select the alternate account number from the adjoining option list Recalc Amount Specify the new charge amount Recalc Tax Amount On click of save the system calculated tax amount based on the new charge amount is defaulted
78. ulation i e round up to the nearest month in this case 6 months and calculate the tax accordingly Tax amount Amount of guarantee n of months Tax Rate e Formula to Tax amount for Various Tenors Tax Amount Amount of Issued lt Contract Initiation guarantee whole no of 1 year Amendment months Tax Rate Guarantees Issued gt 1 lt 5 Contract Initiation Tax Amount Amount of Year Amendment guarantee Tax Rate Issued gt 5 Contract Initiation Tax Amount Amount of Years Amendment guarantee Tax Rate 2 4 on authorization of tax rule system creates an accounting role and associated amount tag Accounting role is created as tax rule name_PRT amp Amount tag is created as tax rule name_AMT Viewing Tax Rule Details You can view the Tax rule details using Tax Rule Maintenance Summary screen To invoke this screen type TASTXRUL in the field at the top right corner of the Application tool bar and click the adjoining arrow button 2 20 ORACLE Tax Rule Maintenance Summary Authorization Status Rule Code Customer Category Minimum Amount Rate Type Region Code Records per page 15 4 4 1 Of 1 Rule Code ry Authorization Status Search Record Status Advanced Search Effective Date Record Status Effective Date Country Code Maximum Amount Rate Code
79. ures of the Product Tax Linkage definition screen Tax Rule This indicates the tax rule applicable to the product Tax Component and Basis Component Tax can be applied on the basis of any component that is taxable according to the laws in your country This component is called the Basis Component The method of tax application defined for the Tax Rule will be applied on this component 2 41 ORACLE Example Tax can be applied on either the LC amount the commission or charge component These are called the Basis Component The method of tax application defined for the Tax Rule will be applicable on this component Basis Amount Tag This is the basis amount tag for the tax component Event You should specify the event for which the tax is applicable For example if you specify that the tax is to be applied upon initiation of the contract then the liquidation entries for tax will be passed when the contract is initiated If you specify the event as the Maturity of the contract the tax will be liquidated upon Maturity of the contract Similarly if you specify that the tax be to be applied at the time the commissions are collected from the customer then the entries for tax will be passed when the commission is paid Tax Type The type of tax decides the bearer the tax It could be the bank or the customer A customer bears withholding type of tax and the tax component is debited to the customer s account The bank bears an expen
80. urities module are associated with a unique tag When building a tax component you have to specify the tag associated with the Basis Amount When tax is calculated for a security the basis amount corresponding to the tag will be picked up automatically 2 32 ORACLE 2 9 4 2 9 5 Maintaining Rate Codes and their Values A Tax Rate Code identifies the rate that applies on an issuer tax For instance you can create a rate code and specify the rate values for different Effective Dates in the Tax Rate Maintenance screen When building an Issuer Tax component say Issuer_01 in the Tax Class Maintenance screen you only need to specify the Rate Code that should apply For all securities associated with Issuer_01 the rates corresponding to the code will be picked up You can define a rate code and enter a brief description for it in the Tax Rate Code Maintenance screen You can invoke this screen by typing TADRTCD in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button Tax Rate Code Maintenance Rate Code Rate Code Description County Code Country Code Description Input By Authorized By Modification Authorized Date Time Date Time Number Open Since tax rates would vary across markets you can define rate codes specific to markets countries Furnishing the Rate Values for a Code The actual rate values for a rate code ca
81. vice format can be maintained This advice format can be mapped to the products For income through interest on customer accounts there is a pre shipped advice format from the system The format of the advice can be modified However the name of the advice format is pre shipped and cannot be modified The following tags will be available for advice generation for individual transactions Tag Name Description Data Type 2 3 ORACLE TXNNUMBER The contract reference number Alphanumeric 16 characters CALCDATE The tax calculation date Date COMPCCY The interest component currency Alphanumeric 3 characters TAXCCY The tax currency Alphanumeric 3 characters TAXAMTINTAXCCY The tax amount in tax currency Number INTERESTAMT The interest amount basis amount on Number which the tax has been calculated 2 4 ORACLE Maintaining Tax Rules A tax rule identifies the method in which a tax component a Stock Exchange tax a Local tax etc is calculated You can build tax rules in the Tax Rule Maintenance screen You can invoke this screen by typing TADTXRUL in the field at the top right corner of the Application tool bar and clicking the adjoining arrow button Tax Rule Maintenance Rule Code Customer Category Description EN Effective Date Country Code laj Tax Category Region Code Les Description

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