Oracle eBTax – when to use ‘Use Subscription of Legal Entity’

When creating your Oracle eBusiness Tax Party Tax Profiles, there is an option to choose ‘Use Subscription of Legal Entity’ and whilst the Oracle documentation says to use this – when is the correct time to do so?

There are 2 scenarios that will determine whether you tick the ‘Use Subscription of Legal Entity’ box or not.

  • If you have multiple Legal Entities assigned to one Operating unit then yes, tick the ‘Use Subscription of Legal Entity’ box. The reason for this is that you want the ability to drive the tax information by the multiple Legal Entities rather than using the one location that is linked the Operating Unit.
  • If you have one Legal Entity but multiple Operating units then no, do not tick the ‘Use Subscription of Legal Entity’ box. This is because the Operating unit is likely to only have one tax regime attached to it. If this is the case then it is a lot easier to control the tax rules when there is only one tax regime, but if you had the ‘Use Subscription of Legal Entity’ box ticked then each operating unit would have the tax regimes that are linked to the Legal Entity that are meant for the other Operating Units. An example would be a UK Legal Entity have 3 legal establishments, one in UK, one in France and one in Spain. Each of these establishments are VAT registered in the countries they belong to. So you only want to calculate FR VAT in the French establishment but if the ‘Use Subscription of Legal Entity’ was ticked then the FR Operating Unit could calculate tax for the FR, GB and ES VAT regimes. if ‘Use Subscription of Legal Entity’ is not ticked then only the FR VAT regime would kick in for the FR Operating Unit (providing that only the FR VAT regime was assigned to the FR OU).
  • If you have one Legal Entity and one Operating unit then, again, NO, do not select the ‘Use Subscription of Legal Entity’ box. Once selected and saved, the choice cannot be reversed so leaving it un-ticked when there is only one Operating Unit gives you the option of either ticking or un tick at a later stage.

Of course, there may be times when you need to tick the box for ‘Use Subscription of Legal Entity’ even if you have just one Legal Entity with multiple Operating Units or one Legal Entity and one Operating Unit but the advice above will hopefully guide you to the correct solution.