Oracle Retail Merchandising System (RMS) - Tax/VAT in RMS

Welcome again Oracle Retail fans. This post is a continuation of Oracle Retail Merchandising System Deep Dive article. If you are a beginner, you may want to visit Oracle Retail Merchandising System Overview article before proceeding on this article, however, it is not completely necessary.

In this article, we'll be exploring various Tax setup options in RMS Foundations. As mentioned in my earlier posts, this article also covers each and every detail required for Tax related questions in Oracle Retail Merchandising Systems (RMS) Certification (Pearson Vue Exam Number 1Z0-453) preparations. 

I’ll be taking you through following details to understand details about Taxes in RMS Foundations:

• Regular Tax
• Value Added Tax

Regular Tax

Following is the high-level flow for setting up a regular tax in RMS, when VAT is not used:

Geocode

Geocode data is used for tax functionality.  Geocodes are determined by Vertex and setup in RMS.  This data is needed by the POS to apply the correct tax information at the store level. 

Tax Group ID

A tax group ID is assigned to the appropriate RMS Merchandise Hierarchy at the subclass level.  Although this information resides in Vertex, there is no automation to move this information from Vertex to RMS; therefore, this is handled manually within RMS.  Once the tax group ID is assigned at the subclass level, RMS will automatically assign that tax group ID to all items within the subclass.

Adding Geocode in RMS

Following are the high-level steps to add Geocode in RMS:

1.       From the RMS Start Menu, double-click Control folder.

2.       Double-click Sales Tax folder. 

3.       Double-click Geocode Maintenance folder. 

4.       Click Edit task.

The Geocode Hierarchy Maintenance screen displays:

5.       Type a value in the Country field or select it from the LOV and hit Search

6.       Click Add. A new Geocode data entry row is enabled.

7.       Type a value in the County, State, County, and City field or select it from the LOV. The Geocode populates.

8.       Click Save.

Assign Geocodes to a New Store:

1.       From the RMS Start Menu, double-click Action folder.

2.       Double-click Organizational Hierarchy Task. Select the Store hierarchy level.

3.       Type a value for each field or select it from the LOV and click OK to save.

VAT Tax

VAT functionality is optional in RMS. In several countries, value added taxes (VAT) must be considered when determining the retail price of the items. VAT amounts appear in several modules of the system, such as purchase orders, contracts, stock ledger, and invoice matching.

Prior to using the VAT functionality, you must set up a list of VAT regions and VAT codes. For each VAT code, you enter the tax rate to be used in monetary calculations. The following types of VAT regions may be set up:

Base EU Region: The VAT region encompasses the entire European Union. Only one VAT region can be designated as the Base EU Region.

EU Member: The VAT region is located within the European Union.

Non-Member: The VAT region is not located within the European Union.

As you add departments to the system, you must associate one or more VAT regions with the department. Each VAT region must have one or more VAT codes. VAT codes entered at the department level become the default VAT codes for items within the department. You can edit the default VAT codes at the item level. VAT rates are identified by VAT code. When VAT codes are associated with a VAT region, they are assigned a VAT type. The VAT type indicates where the tax rate is included when determining the price. The VAT type can be included in the:

Cost: The tax rate is applied to cost of the items.

Retail Price: The tax rate is applied to the retail price of the items.

Both: The tax rate is applied to the cost and the retail price of the items.

Value added taxes are reflected in the stock ledger when the retail method of accounting is used and the system is set up to include VAT in retail calculations.

As you add stores and warehouses to the system, you must associate a VAT region with each location.

If you indicate that class level VAT will be used, you can indicate by class whether retail prices should be displayed in RMS including or excluding the retail price. For maintenance purposes, you can set the inclusion or exclusion to default to the class level by the department.

VAT Department Maintenance Window

VAT Item Maintenance Window

VAT Region Maintenance Window

This was all about various Tax options in RMS. Looking for more or think anything else too needs to be covered. Please do let me know.

In next article, we are going to dive more in Oracle Retail Merchandising Systems and understand all about Items in RMS. 

You may also want to refer to parent article Oracle Retail Merchandising Systems - Deep Dive. Do drop a note/comment in case you have any question, comments or feedback. 

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About Nagesh Mishra

Nagesh Mishra - A Passionate Oracle Retail Certified Professional with more than 17 years of overall experience in IT industry and more than 15 years of domain expertise in Oracle Retail Applications. Worked extensively in diversified fields of Product Implementation, Business Consulting, Pre-Sales, Application Software Development, Maintenance and Support and Re-Engineering Oracle Retail projects.