Conquering China’s Complexity QA

Golden Tax Adaptor
By ITC Oracle Educator
May 4, 2016

Our webcast “Conquering China’s Complexity and Localization with Oracle R12” was presented last week, and it featured the hot topic of the region (China's tax policy change starting may 1st, which you can read about here. )  Today we bring you the transcript of the Q&A session. If you missed the webcast, feel free to downlad the recording.

What should we to take into account when upgrading from 11i to R12 – specifically in relation to Golden Tax and Value-added Tax?
Oracle has provided a standard feature called the Golden Tax Adaptor in R12 which is a custom golden tax interface solution in 11i. When upgrading from 11i to R12, you can choose to upgrade your custom Golden Tax Interface solution or switch to use the standard Golden tax adaptor.

You will need to evaluate whether to use the Oracle standard feature to replace any customized interface programs. In slightly more than half of the cases, we find that in order to accommodate all the business requirements of Golden Tax Invoicing, the customized interface solution is still preferred.

As for the R12 E-Business tax module, it requires additional setups which are more complex in R12 than in 11i - therefore, you should keep in mind that more testing will be required.

Have you used the Golden Tax Adaptor for China? What issues have you encountered with configurations and set up?
Yes, we have used the Golden Tax Adaptor for China in multiple projects. Regarding the issues, we should point out a couple of limitations:
1. Golden Tax Adapter does not display customer invoicing requirements. For example, during sales order creation, a Sales Representative may receive special invoicing requirements from the customer and capture those in the data fields like Invoice Instruction on the Sales Order header. This information is very important, but Oracle does not transfer it into the Golden Tax Adaptor.
2. Oracle predefines where the adaptor will get item-related information and where it will interface to the Golden Tax System. Those are the only fields you can use. Oracle provides less flexibility for users to maintain item related information.

How does the E-Business Tax work with the Golden Tax Adaptor?
E-business Tax will determine the tax/rate and calculate the VAT tax amount, you can choose to interface invoice amount with or without VAT amount into the golden tax system. The golden tax adaptor acts as interface between AR and Golden tax system.

Can you provide more information of the difference between business tax and value-added tax? 
The main difference between business tax and value added tax is that a company cannot claim any input tax credit for business tax that is paid to its vendor when purchasing services. In addition, the scope of taxable services that is applicable to business tax is different from the scope that is applied with VAT. Note that the Chinese government has announced it will replace Business tax with VAT starting May 1st.

When was the last time the MLS patch was updated?
It was last updated on March 28th, 2016

Are you rolling out OLFM (Lease Management) in these countries?
No.

Are there any options that would not require an install of MLS?
Yes, we have helped many MNCs to implement non-MLS solutions in China. Contact us for more information.

Does China have any specific intercompany reporting needs?
In China all intercompany transactions need to be treated as buy/sell with third party. Supporting documents will be needed to support this type of transaction like Intercompany PO, SO, AP invoice and AR invoice. The new features of Advanced Global Intercompany System can be used to support this china localization requirement.

Do US companies have any security concerns of the Chinese government breaching their EBS global instances since they have access to the communications of data flowing?
Not that we know of. However, all clients have security policies in place.

Written by ITC Oracle Educator

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