115 Finkor

Oracle® Financials for Korea
User Guide
Release 11i
Part No. A81257-04
August 2004
Oracle Financials for Korea User Guide, Release 11i
Part No. A81257-04
Copyright © 1998, 2004, Oracle. All rights reserved.
Contributors: Dario Betancourt, Craig Borchardt, Nina Galajan, Rafael Guerrero, Joseph Gum, Clara
Jaeckel, Robert MacIsaac, Ahmed Mohiuddin, Essan Ni, Kristin Penaskovic, Roberto M. Silva, Seong Soo
Song, Usha Srikumaran, Tai-Hyun Won
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Contents
Send Us Your Comments .................................................................................................................... v
Preface........................................................................................................................................................... vii
About this Country-Specific User Guide .......................................................................................... viii
Audience for this Guide........................................................................................................................ ix
Other Information Sources .................................................................................................................... x
Installation and System Administration ........................................................................................... xiii
Other Implementation Documentation ............................................................................................. xv
Training and Support......................................................................................................................... xvii
Do Not Use Database Tools to Modify Oracle Applications Data .............................................. xviii
About Oracle ........................................................................................................................................ xix
Thank You.............................................................................................................................................. xx
1 Oracle Payables
Withholding Tax in Korea ................................................................................................................ 1-2
Setting Up Oracle Payables for Withholding Tax........................................................................ 1-3
1. Define Locations ....................................................................................................................... 1-4
2. Define Organizations ............................................................................................................... 1-7
Prerequisites .......................................................................................................................... 1-7
3. Enable Withholding Tax.......................................................................................................... 1-9
4. Define Income Category Codes ............................................................................................ 1-10
5. Define Withholding Tax Codes ............................................................................................ 1-13
Prerequisites ........................................................................................................................ 1-13
6. Define Withholding Tax Groups.......................................................................................... 1-17
iii
Defining Suppliers ........................................................................................................................... 1-18
Korean Withholding Tax Report ................................................................................................... 1-22
Prerequisites ........................................................................................................................ 1-23
Report Parameters .............................................................................................................. 1-23
Column Headings ............................................................................................................... 1-25
2 Oracle Receivables
Defining Customers ........................................................................................................................... 2-2
3 VAT in Korea
VAT in Korea ....................................................................................................................................... 3-2
Setting Up for VAT............................................................................................................................. 3-3
1. Define Industry Lookups......................................................................................................... 3-4
2. Define Locations ....................................................................................................................... 3-5
3. Define Organizations ............................................................................................................... 3-7
Prerequisites .......................................................................................................................... 3-7
4. Define Payables VAT Codes ................................................................................................... 3-9
5. Define Receivables VAT Codes ............................................................................................ 3-11
6. Define Tax Groups.................................................................................................................. 3-14
Korean VAT Tax Report .................................................................................................................. 3-15
Prerequisites ........................................................................................................................ 3-16
Report Parameters .............................................................................................................. 3-17
Report Headings ................................................................................................................. 3-19
Column Headings ............................................................................................................... 3-19
A Using Globalization Flexfields

Using Globalization Flexfields ........................................................................................................ A-2
Index
iv
Send Us Your Comments
Oracle Financials for Korea User Guide, Release 11i
Part No. A81257-04
Oracle welcomes your comments and suggestions on the quality and usefulness of this document.
Your input is an important part of the information used for revision.
■ Did you find any errors?
■ Is the information clearly presented?
■ Do you need more information? If so, where?
■ Are the examples correct? Do you need more examples?
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If you find any errors or have any other suggestions for improvement, please indicate the document
title and part number, and the chapter, section, and page number (if available). You can send com-
ments to us in the following ways:
■ Electronic mail: [email protected]
■ FAX: (650) 506-7200 Attention: Oracle Applications Global Financials Documentation
Manager
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Oracle Applications Global Financials Documentation
500 Oracle Parkway
Redwood Shores, CA 94065
USA
If you would like a reply, please give your name, address, telephone number, and (optionally) elec-
tronic mail address.
If you have problems with the software, please contact your local Oracle Support Services.
v
vi
Preface
Welcome to Release 11i of the Oracle Financials for Korea User Guide.
This user guide includes information to help you effectively work with Oracle
Financials for Korea and contains detailed information about the following:
■ Overview and reference information
■ Specific tasks that you can accomplish with Oracle Financials for Korea
■ Oracle Financials for Korea programs, reports, and listings
■ Oracle Financials for Korea functions and features
This preface explains how this user guide is organized and introduces other sources
of information that can help you use Oracle Financials for Korea.
vii
About this Country-Specific User Guide
This user guide documents country-specific functionality developed for use within
your country and supplements our core Financials user guides. This user guide also
includes tips about using core functionality to meet your country’s legal and
business requirements, as well as task and reference information.
■ Chapter 1 describes Oracle Payables for Korea, including withholding tax setup
and reporting. This chapter also describes how to enter withholding and VAT
information for your suppliers.
■ Chapter 2 describes Oracle Receivables for Korea, including how to enter VAT
information for your customers.
■ Chapter 3 describes VAT setup and reporting in Korea.
■ Appendix A describes how to use globalization flexfields.
Documentation Accessibility
Our goal is to make Oracle products, services, and supporting documentation
accessible, with good usability, to the disabled community. To that end, our
documentation includes features that make information available to users of
assistive technology. This documentation is available in HTML format, and contains
markup to facilitate access by the disabled community. Standards will continue to
evolve over time, and Oracle is actively engaged with other market-leading
technology vendors to address technical obstacles so that our documentation can be
accessible to all of our customers. For additional information, visit the Oracle
Accessibility Program Web site at http://www.oracle.com/accessibility/
Accessibility of Code Examples in Documentation

JAWS, a Windows screen reader, may not always correctly read the code examples
in this document. The conventions for writing code require that closing braces
should appear on an otherwise empty line; however, JAWS may not always read a
line of text that consists solely of a bracket or brace.
Accessibility of Links to External Web Sites in Documentation

This documentation may contain links to Web sites of other companies or
organizations that Oracle does not own or control. Oracle neither evaluates nor
makes any representations regarding the accessibility of these Web sites.
viii
Audience for this Guide
This guide assumes you have a working knowledge of the following:
■ The principles and customary practices of your business area.
■ Oracle Financials for Korea.
If you have never used Oracle Financials for Korea, we suggest you attend one
or more of the Oracle training classes available through Oracle University.
■ The Oracle Applications graphical user interface.
To learn more about the Oracle Applications graphical user interface, read the
Oracle Applications User Guide.
See Other Information Sources for more information about Oracle Applications
product information.
ix
Other Information Sources
You can choose from many sources of information, including documentation,
training, and support services, to increase your knowledge and understanding of
Oracle Financials for Korea.
If this guide refers you to other Oracle Applications documentation, use only the
Release 11i versions of those guides.
Online Documentation
All Oracle Applications documentation is available online (HTML or PDF).
■ PDF Documentation- See the Online Documentation CD for current PDF
documentation for your product with each release. This Documentation CD is
also available on OracleMetaLink and is updated frequently.
■ Online Help - You can refer to Oracle Applications Help for current HTML
online help for your product. Oracle provides patchable online help, which you
can apply to your system for updated implementation and end user
documentation. No system downtime is required to apply online help.
■ Release Content Document - See the Release Content Document for
descriptions of new features available by release. The Release Content
Document is available on OracleMetaLink.
■ About document - Refer to the About document for information about your
release, including feature updates, installation information, and new
documentation or documentation patches that you can download. The About
document is available on OracleMetaLink.
Related User Guides

Oracle Financials for Korea shares business and setup information with other
Oracle Applications products. Therefore, you may want to refer to other guides
when you set up and use Oracle Financials for Korea.
You can read the guides online by choosing Library from the expandable menu on
your HTML help window, by reading from the Oracle Applications Document
Library CD included in your media pack, or by using a Web browser with a URL
that your system administrator provides.
If you require printed guides, you can purchase them from the Oracle Store at
http://oraclestore.oracle.com.
x
Guides Related to All Products
Oracle Applications User’s Guide

This guide explains how to enter data, query, run reports, and navigate using the
graphical user interface (GUI). This guide also includes information on setting user
profiles, as well as running and reviewing reports and concurrent processes.
You can access this user’s guide online by choosing “Getting Started with Oracle
Applications” from any Oracle Applications help file.
Guides Related to This Product
Oracle Financials Common Country Features User Guide

This manual describes functionality developed to meet specific legal and business
requirements that are common to several countries in a given region. Consult this
user guide along with your country-specific user guide and your financial product's
manual to effectively use Oracle Financials in your country.
Oracle Financials Country-Specific User Guides

These manuals document functionality developed to meet legal and business
requirements in countries that you do business in. Look for a user guide that is
appropriate to your country; for example, see the Oracle Financials for the Czech
Republic User Guide for more information about using this software in the Czech
Republic.
Oracle Financials RXi Reports Administration Tool User Guide

Use the RXi reports administration tool to design the content and layout of RXi
reports. RXi reports let you order, edit, and present report information to better
meet your company's reporting needs.
Oracle General Ledger User Guide

Use this manual when you plan and define your chart of accounts, accounting
period types and accounting calendar, functional currency, and set of books. It also
describes how to define journal entry sources and categories so that you can create
journal entries for your general ledger. If you use multiple currencies, use this
manual when you define additional rate types and enter daily rates. This manual
also includes complete information on implementing budgetary control.
xi
Oracle Payables User Guide
This manual describes how accounts payable transactions are created and entered
into Oracle Payables. This manual also contains detailed setup information for
Oracle Payables. Use this manual to learn how to implement flexible address
formats for different countries. You can use flexible address formats in the
suppliers, customers, banks, invoices, and payments windows in both Oracle
Payables and Oracle Receivables.
Oracle Receivables User Guide

Use this manual to learn how to implement flexible address formats for different
countries. You can use flexible address formats in the suppliers, customers, banks,
invoices, and payments windows in both Oracle Payables and Oracle Receivables.
This manual also explains how to set up your system, create transactions, and run
reports in Oracle Receivables.
Using Oracle HRMS - The Fundamentals

This user guide explains how to setup and use enterprise modeling, organization
management, and cost analysis. It also includes information about defining
payrolls.
xii
Installation and System Administration
Oracle Applications Concepts
This guide provides an introduction to the concepts, features, technology stack,
architecture, and terminology for Oracle Applications Release 11i. It provides a
useful first book to read before an installation of Oracle Applications. This guide
also introduces the concepts behind Applications-wide features such as Business
Intelligence (BIS), languages and character sets, and Self-Service Web Applications.
Installing Oracle Applications

This guide provides instructions for managing the installation of Oracle
Applications products. In Release 11i, much of the installation process is handled
using Oracle Rapid Install, which minimizes the time to install Oracle Applications
and the Oracle technology stack by automating many of the required steps. This
guide contains instructions for using Oracle Rapid Install and lists the tasks you
need to perform to finish your installation. You should use this guide in conjunction
with individual product user guides and implementation guides.
Oracle Financials Country-Specific Installation Supplement

Use this manual to learn about general country information, such as responsibilities
and report security groups, as well as any post-install steps required by some
countries or the Global Accounting Engine.
Upgrading Oracle Applications

Refer to this guide if you are upgrading your Oracle Applications Release 10.7 or
Release 11.0 products to Release 11i. This guide describes the upgrade process and
lists database and product-specific upgrade tasks. You must be either at Release
10.7 (NCA, SmartClient, or character mode) or Release 11.0, to upgrade to Release
11i. You cannot upgrade to Release 11i directly from releases prior to 10.7.
Oracle Applications System Administrator’s Guide

This guide provides planning and reference information for the Oracle Applications
System Administrator. It contains information on how to define security, customize
menus and online help, and manage concurrent processing.
Oracle Alert User’s Guide

This guide explains how to define periodic and event alerts to monitor the status of
your Oracle Applications data.
xiii
Oracle Applications Developer’s Guide
This guide contains the coding standards followed by the Oracle Applications
development staff and describes the Oracle Application Object Library components
that are needed to implement the Oracle Applications user interface described in
the Oracle Applications User Interface Standards for Forms-Based Products. This manual
also provides information to help you build your custom Oracle Forms Developer
forms so that the forms integrate with Oracle Applications.
Maintaining Oracle Applications

Use this guide to help you run the various AD utilities, such as AutoUpgrade,
AutoPatch, AD Administration, AD Controller, AD Relink, License Manager, and
others. It contains how-to steps, screenshots, and other information that you need to
run the AD utilities. This guide also provides information on maintaining the
Oracle applications file system and database.
Oracle Applications User Interface Standards for Forms-Based Products

This guide contains the user interface (UI) standards followed by the Oracle
Applications development staff. It describes the UI for the Oracle Applications
products and how to apply this UI to the design of an application built by using
Oracle Forms.
xiv
Other Implementation Documentation
Oracle Applications Product Update Notes
Use this guide as a reference for upgrading an installation of Oracle Applications. It
provides a history of the changes to individual Oracle Applications products
between Release 11.0 and Release 11i. It includes new features, enhancements, and
changes made to database objects, profile options, and seed data for this interval.
Oracle Financials Open Interfaces Guide

This guide contains a brief summary of each Oracle Financial Applications open
interface.
Oracle Applications Character Mode to GUI Menu Path Changes

This is a quick reference guide for experienced Oracle Applications end users
migrating from character mode to a graphical user interface (GUI). This guide lists
each character mode form and describes which GUI windows or functions
replace it.
Oracle Workflow Administrator's Guide

This guide explains how to complete the setup steps necessary for any Oracle
Applications product that includes workflow-enabled processes, as well as how to
monitor the progress of runtime workflow processes.
Oracle Workflow Developer's Guide

This guide explains how to define new workflow business processes and customize
existing Oracle Applications-embedded workflow processes. It also describes how
to define and customize business events and event subscriptions.
Oracle Workflow User's Guide

This guide describes how Oracle Applications users can view and respond to
workflow notifications and monitor the progress of their workflow processes.
Oracle Workflow API Reference

This guide describes the APIs provided for developers and administrators to access
Oracle Workflow.
xv
Multiple Reporting Currencies in Oracle Applications
If you use Multiple Reporting Currencies feature to report and maintain accounting
records in more than one currency, use this manual before implementing Oracle
Financials for Korea. The manual details additional steps and setup considerations
for implementing Oracle Financials for Korea with this feature.Multiple
Organizations in Oracle Applications
If you use the Oracle Applications Multiple Organization Support feature to use
multiple sets of books for one Oracle Financials installation, use this guide to learn
about setting up and using Oracle Financials with this feature.
Oracle Applications Flexfields Guide

This guide provides flexfields planning, setup and reference information for the
Oracle Financials for Korea implementation team, as well as for users responsible
for the ongoing maintenance of Oracle Applications product data. This guide also
provides information on creating custom reports on flexfields data.
Oracle eTechnical Reference Manuals

Each eTechnical Reference Manual (eTRM) contains database diagrams and a
detailed description of database tables, forms, reports, and programs for a specific
Oracle Applications product. This information helps you convert data from your
existing applications, integrate Oracle Applications data with non-Oracle
applications, and write custom reports for Oracle Applications products. Oracle
eTRM is available on OracleMetalink
Oracle Applications Message Manual

This manual describes all Oracle Applications messages. This manual is available in
HTML format on the documentation CD-ROM for Release 11i.
xvi
Training and Support
Training
Oracle offers a complete set of training courses to help you and your staff master
Oracle Financials for Korea and reach full productivity quickly. These courses are
organized into functional learning paths, so you take only those courses
appropriate to your job or area of responsibility.
You have a choice of educational environments. You can attend courses offered by
Oracle University at any one of our many education centers, you can arrange for
our trainers to teach at your facility, or you can use Oracle Learning Network
(OLN), Oracle University's online education utility. In addition, Oracle training
professionals can tailor standard courses or develop custom courses to meet your
needs. For example, you may want to use your organization structure, terminology,
and data as examples in a customized training session delivered at your own
facility.
Support
From on-site support to central support, our team of experienced professionals
provides the help and information you need to keep Oracle Financials for Korea
working for you. This team includes your technical representative, account
manager, and Oracle’s large staff of consultants and support specialists with
expertise in your business area, managing an Oracle server, and your hardware and
software environment.
xvii
Do Not Use Database Tools to Modify Oracle Applications Data
Oracle STRONGLY RECOMMENDS that you never use SQL*Plus, Oracle Data
Browser, database triggers, or any other tool to modify Oracle Applications data
unless otherwise instructed.
Oracle provides powerful tools you can use to create, store, change, retrieve, and
maintain information in an Oracle database. But if you use Oracle tools such as
SQL*Plus to modify Oracle Applications data, you risk destroying the integrity of
your data and you lose the ability to audit changes to your data.
Because Oracle Applications tables are interrelated, any change you make using
Oracle Applications can update many tables at once. But when you modify Oracle
Applications data using anything other than Oracle Applications, you may change a
row in one table without making corresponding changes in related tables. If your
tables get out of synchronization with each other, you risk retrieving erroneous
information and you risk unpredictable results throughout Oracle Applications.
When you use Oracle Applications to modify your data, Oracle Applications
automatically checks that your changes are valid. Oracle Applications also keeps
track of who changes information. If you enter information into database tables
using database tools, you may store invalid information. You also lose the ability to
track who has changed your information because SQL*Plus and other database
tools do not keep a record of changes.
xviii
About Oracle
Oracle develops and markets an integrated line of software products for database
management, applications development, decision support, and office automation,
as well as Oracle Applications, an integrated suite of more than 160 software
modules for financial management, supply chain management, manufacturing,
project systems, human resources and customer relationship management.
Oracle products are available for mainframes, minicomputers, personal computers,
network computers and personal digital assistants, allowing organizations to
integrate different computers, different operating systems, different networks, and
even different database management systems, into a single, unified computing and
information resource.
Oracle is the world’s leading supplier of software for information management, and
the world’s second largest software company. Oracle offers its database, tools, and
applications products, along with related consulting, education, and support
services, in over 145 countries around the world.
xix
Thank You
Thank you for using Oracle Financials for Korea and this user guide.
Oracle values your comments and feedback. In this guide is a reader’s comment
form that you can use to explain what you like or dislike about Oracle Financials for
Korea or this user guide. Mail your comments to the following address or call us
directly at (650) 506-7000.
Oracle Applications Global Financials Documentation
Oracle Corporation
500 Oracle Parkway
Redwood Shores, CA 94065
USA
Or send electronic mail to [email protected].
xx
1
Oracle Payables
This chapter describes withholding tax setup and reporting in Korea. This chapter
also overviews how to enter withholding information for your suppliers.
Oracle Payables 1-1

Withholding Tax in Korea
Withholding Tax in Korea
In Korea, companies are required to withhold tax on certain types of income

payments to their suppliers. Korean companies pay the supplier invoice net the
withheld amount, issue a withholding certificate for the withheld amount to the
supplier, and remit the withheld tax to the proper tax authority.
There are two types of withholding under Korean tax law: Income withholding and
Resident withholding. Income withholding is comprised of Business withholding
and General withholding.
■ Business withholding is withholding on payments for professional services to
suppliers such as lawyers, accountants, and doctors.
■ General withholding is withholding on all other types of income payments to
suppliers, such as interest, dividends, and real estate income payments.
■ Resident withholding is a surcharge on the General and Business withholding
tax. For more information about Resident withholding, see Step 5. Define
Withholding Tax Codes on page 1-13.
Normal operating expenses, such as purchase transactions between companies, are
not subject to withholding tax.
See Setting Up Oracle Payables for Withholding Tax on page 1-3 for a list of the
prerequisite setup steps that you must complete before you can withhold tax using
Oracle Financials for Korea. You must use Korean Won as the functional currency.
Legal reporting for withholding tax

Oracle Financials for Korea provides you with the Korean Withholding Tax report
which you can use to review your company’s withholding tax history. This report
provides complete details of the withholdings that were applied to your company’s
income payments to suppliers. For more information, see Korean Withholding Tax
report on page 1-22.
1-2 Oracle Financials for Korea User Guide

Setting Up Oracle Payables for Withholding Tax
This section describes the steps for setting up Oracle Payables to calculate
withholding tax in Korea. Use this checklist to help you complete the appropriate
setup tasks in the correct order.
Step Setup task

1 Define Locations on page 1-4
2 Define Organizations on page 1-7
3 Enable Withholding Tax on page 1-9
4 Define Income Category Codes on page 1-10
5 Define Withholding Tax Codes on page 1-13
6 Define Withholding Tax Groups on page 1-17
See also: Setting Up Withholding Tax, Oracle Payables User Guide
Oracle Payables 1-3

1. Define Locations
1. Define Locations
Use the Location window to enter information about your company. You define one
location for each company site that is responsible for reporting withholding taxes to
the tax authority.
The information that you enter here is used for reporting purposes:
■ Use the Location Address flexfield to enter your company’s location
information.
■ Use the globalization flexfield to enter your company’s tax registration number
and related tax information.
You use these locations when you define withholding tax codes. For more
information about defining withholding tax codes, see Step 5. Define Withholding
Tax Codes on page 1-13.
You also use the Location window to define a corporate location for each legal
entity. To define a corporate location, enter a corporate identification number in the
globalization flexfield on the Location window. Before you can assign a corporate
identification number to a location, however, you must define a legal entity and
assign the location to the legal entity. For more information, see Step 2. Define
Organizations on page 1-7.
See also: Setting Up Locations, Using Oracle HRMS - The

Fundamentals

To define company information:

1. Navigate to the Location window.
2. Enter the location that you want.
3. Enter Korea (International) in the Address Style field to enable the Korean
Location Address flexfield.
4. Navigate to the Location Address flexfield.
5. Enter your company’s location address and contact information in the available
fields.
6. Press the OK button.
7. Navigate to the globalization flexfield. For instructions, see Using Globalization
Flexfields on page A-2.
8. In the Tax Registration Number field, enter your company’s tax registration
number for this company site.
Oracle Payables 1-5

1. Define Locations
9. In the Taxable Person field, enter your company’s taxable person.

This field is required only if you entered a tax registration number.
Note: Do not enter a corporate identification number at this time.

You enter the corporate identification number after you define a
legal entity. For more information, see Step 2. Define Organizations
on page 1-7.
11. Save your work.

2. Define Organizations
Use the Organization window to classify your organization and the relationships
among your company’s different organizations.
Note: You do not need to create an organization for each company

location that you define.
See also: Creating an Organization, Using Oracle HRMS - The

Fundamentals
Prerequisites
Before you can assign a location to an organization, you must define a location.
To define an organization for your company:
1. Navigate to the Organization window.
2. Enter a name for your organization.
3. If this organization is a legal entity, specify a location in the Location field.
After you specify a location in the Location field, you must assign a corporate
identification number to this location in the Location window. See below for
more information.
4. Navigate to the Organization Classifications region.
5. In the Name field, from the list of values, select the classification of this
organization.
6. Check the Enabled check box.
7. Repeat steps 5 and 6, if necessary.
8. Save your work.
Oracle Payables 1-7

To define a corporate location:

2. Query the location that you previously defined as a legal entity.
4. In the Corporate Identification Number field, enter your company’s corporate
identification number.
Note: Assign a corporate identification number to only one

location per legal entity.
The other fields in this globalization flexfield may already be populated with
values that you entered when you first defined the location. For more
information, see Step 1. Define Locations on page 1-4.
6. Save your work.

3. Enable Withholding Tax
Use the Payables Options window to set control options and defaults to enable
automatic withholding tax for your supplier invoices.
See also: Payables Options, Oracle Payables User Guide
To define Payables Options for tax withholdings:

1. Navigate to the Payables Options window.
2. Navigate to the Withholding Tax tabbed region.
3. Check the Use Withholding Tax check box.
4. In the Apply Withholding Tax region, you should select At Payment Time.
If you choose At Approval Time, withholding calculations may be inaccurately
reported if invoices are canceled prior to payments.
Note: After you select an option, you should not switch from one
method of withholding to another method.
5. Navigate to the Withholding Amount Basis region.

6. In the Create Withholding Invoice region, select the time at which you would
like Payables to automatically create withholding tax invoices to remit withheld
taxes to tax authorities. You should choose At Payment Time.
If you select At Payment Time, Payables creates unapproved withholding tax
invoices during the Confirm program of payment batch processing, or during
processing of a Quick payment. Payables does not automatically withhold taxes
if you pay with a manual payment.
If you select At Approval Time, Payables creates unapproved withholding tax
invoices when you approve supplier invoices.
7. Save your work.
Oracle Payables 1-9

4. Define Income Category Codes
Use the Lookups window to define lookup codes for income category codes. You
can select lookup codes from the lists of values after you define them. Income
category codes are listed on the Korean Withholding Tax report.
In the Lookups window, enter Asia Pacific Localizations in the Application field and a
description of the lookup codes in the Description field, if not already displayed. In
the Code and Meaning fields, enter a code and description for each income category
that your company requires.
Note: The code that you enter in the Code field should match the
numeric code for each income category as defined by the Korean
tax authority.
Define lookup codes for:

■ Domestic income categories, using the JAKR_AP_AWT_INC_CAT_DOMESTIC
lookup type.
This table shows examples of domestic income category codes:
Lookup Code Meaning

10 Interest Income (A)
11 Interest Income (B)
21 Dividend
22 Deemed Dividend
60 Other Income
You use the domestic income category lookup codes when you assign income
categories to withholding tax codes. For more information, see Step 5. Define

■ Foreign income categories, using the JAKR_AP_AWT_INC_CAT_FOREIGN

lookup type.
This table shows examples of foreign income category codes:
Lookup Code Meaning

10 Interest
20 Dividend
30 Real Estate
40 Business Income
42 Individual Service
61 Royalty
62 Others
80 Sales Gain
90 Forest
You use the foreign income category lookup codes when you assign income
categories to withholding tax codes. For more information, see Step 5. Define
Oracle Payables 1-11

■ Business income subcategories, using the JAKR_AP_AWT_BIZ_INC_SUB_CAT

lookup type.
This table shows examples of business income subcategory codes:
Lookup Code Meaning

41 Lawyer
42 CPA
43 Doctor
44 Architect
45 Writer
46 Entertainer
47 Sportsman
48 Insurance Sales Representative
49 Others
You assign the business income subcategory lookup codes in the globalization
flexfield on the Supplier Sites window. See Defining Suppliers on page 1-18 for
more information.
See also: Lookups, Oracle Payables User Guide

5. Define Withholding Tax Codes
Use the Tax Codes window to define withholding tax codes for each income
category that you set up in Step 4. Define Income Category Codes on page 1-10. For
each company location this is responsible for withholding taxes, you should define
separate withholding tax codes for each tax rate and income category that you need.
Use the globalization flexfield in the Tax Codes window to associate one of two
withholding tax types with each tax code that you define:
■ Income withholding
■ Resident withholding
After you define a tax code, use the Withholding Tax Details window to define and
maintain withholding information for tax rates related to tax codes. If you check the
Create Tax Group check box in the Withholding Tax Details window, Oracle
Payables automatically creates a withholding tax group that includes the single tax
code. See Step 6. Define Withholding Tax Groups on page 1-17 for more
information about withholding tax groups.
Resident Withholding in Korea

Resident withholding is an additional 10% withholding surcharge on the amount
withheld from General or Business income payments to a supplier. Resident
withholding is applied only if the recipient is an individual; corporations are not
subject to Resident withholding. In addition, if the recipient is a foreign individual,
Resident withholding is applied only if this surcharge is included in the tax treaty
that Korea has with that foreign country.
Resident withholding is paid to the Province Office, not to the Tax Authority.
See also: Tax Codes, Oracle Payables User Guide
Prerequisites
Before you can define withholding tax codes, you must:
■ define income category codes
■ define a location as a legal entity

To define a withholding tax code and rate:

1. Navigate to the Tax Codes window.
2. Navigate to the Rates tabbed region.
3. In the Tax Code field, enter a unique name to describe the withholding tax code
(maximum of 15 characters).
4. In the Tax Type field, select Withholding Tax from the list of values.
6. In the Location field, enter your company’s location.
The location that you enter must have a tax registration number assigned to it.
7. In the Withholding Tax Type field, select Income Withholding Tax Type or Resident
Withholding Tax Type from the list of values.
8. In the Withholding Certificate Type field, select Business Withholding Certificate
Type or General Withholding Certificate Type from the list of values.
9. In the Domestic Income Category field, select an income category code for this
tax code.
10. In the Foreign Income Category field, select an income category code for this tax
code.
Note: You may enter either a domestic or a foreign income

category, but not both at the same time.

11. If a Recognized Expense is associated with this type of income payment, enter
the expense rate in the Recognized Expense field.
Recognized Expenses are automatically deducted from an income payment
amount before any withholding tax is applied. Payables applies the
withholding tax rate, defined by Korean law, after the Recognized Expense is
deducted. In such cases, the taxable base is different from the supplier invoice
amount; the nominal tax rate and effective tax rate differ as well.
For example, for an invoice amount of 10,000 KRW, the Recognized Expense is
50% and the tax rate is 20%.
■ First, apply the Recognized Expense to the income payment of 10,000 KRW:
10,000 * (1 - 50%) = 5,000
This is the new taxable base amount.
■ Next, apply the tax rate to the new taxable base of 5,000 KRW to determine
the withholding tax amount:
5,000 * 20% = 1,000
■ The final withholding amount that is sent to the Tax Authority is
1,000 KRW.
Calculate the effective tax rate by dividing the final withholding tax amount
by the original income payment amount:
1,000/10,000 = 10%
Although the nominal tax rate is 20%, the effective tax rate is 10%.
Note: You can associate a Recognized Expense with the Other

Income income category code only. This income category is a
General withholding income category. You do not associate
Recognized Expenses with the Business withholding income
category.
12. If you entered a Recognized Expense rate, enter the nominal tax rate in the
Nominal Tax Rate field.
Only enter a nominal tax rate if you entered a Recognized Expense rate in the
previous field.

13. In the Minimum Withheld Amount field, enter the minimum amount that you
want Payables to create a withholding tax invoice for.
If a calculated withholding amount is less than the value that you enter here, no
withholding occurs.
15. Navigate to the Withholding Tax Details window by pressing the Withholding
Tax Details button.
16. Navigate to the Tax Rates region.
17. In the Effective Dates From and To fields, enter the start and end dates for this
tax rate.
18. In the Rate field, enter the tax rate that you want to associate with this
withholding tax code.
If you entered a Recognized Expense and nominal tax rate in the globalization
flexfield, enter the effective tax rate for the withholding tax code here.
Using the example from step 11, you would enter 10% in this field.
19. Save your work.

6. Define Withholding Tax Groups
Use the Withholding Tax Groups window to define withholding tax groups that
include more than one tax code. A withholding tax group lets you apply multiple
withholding taxes to one invoice or distribution line. A tax group tells Payables
which taxes to apply and in which sequential order to apply them. Define
withholding tax groups when you want to include the Resident withholding
surcharge.
Typically, you rank the tax codes within a withholding tax group in the Withholding
Tax Groups window. When you assign a withholding tax group to an invoice or
distribution, Payables correctly calculates the taxes in the order that you specified.
Lower ranked taxes are applied to the invoice or distribution amount less the
previous withholding tax amounts.
In Korea, however, Resident withholding is a tax on the Business or General
withholding amount, not on the invoice amount less the previous withholding tax
amounts. Therefore, you must determine the effective Resident withholding tax by
multiplying the Resident withholding tax by the Business or General Income
withholding tax. You must also assign each tax code within a withholding tax group
with a rank of 1 in order to correctly calculate Resident withholding.
For example, for an income payment of 1,000,000 KRW, the Business withholding is
30% and the Resident withholding is 10%.
■ First, determine the effective Resident withholding:
10% * 30% = 3%
■ Next, set up a withholding tax group that includes the tax codes shown in this
table:
Tax Code Tax Rate Rank

Business Income Tax 30% 1
Resident Withholding 3% 1
■ When you assign this withholding tax group to this invoice, the 30% Business
withholding tax is applied to the supplier income payment for a total tax
amount of 300,000 KRW. The 10% Resident withholding tax is applied to the
30% Business withholding tax for a total tax amount of 30,000 KRW.
See also: Withholding Tax Groups, Oracle Payables User Guide

Defining Suppliers
Defining Suppliers
Use the Suppliers window to enter withholding and VAT information for your
suppliers.
Use the globalization flexfield in the Supplier Sites window to assign withholding
tax and VAT information to your supplier sites.
See also: Suppliers, Oracle Payables User Guide
To define withholding information for suppliers:

1. Navigate to the Suppliers window.
2. Query a supplier.
3. If applicable, enter the supplier’s taxpayer ID in the Taxpayer ID field.
4. If applicable, enter the supplier’s tax registration number in the Tax
Registration Number field.
5. Navigate to the Tax Reporting tabbed region.
6. In the Organization Type field, select the supplier’s organization type from the
list of values.
Select either Corporation or Individual.
7. Navigate to the Supplier Sites window.
8. Query or enter the supplier site that you want.

Defining Suppliers
9. In the Country field, specify the supplier’s country location.

If you enter Korea in this field, Payables identifies this supplier as a domestic
supplier. If you enter anything other than Korea, Payables identifies this
supplier as a foreign supplier.
10. Navigate to the Withholding Tax tabbed region.
11. Check the Allow Withholding Tax check box.
12. In the Withholding Tax Group field, from the list of values, select the
withholding tax group that you want to assign to this supplier.
13. If this supplier site is an independent legal entity with its own tax registration
number, navigate to the Tax Reporting tabbed region.
14. In the Tax Registration Number field, enter the tax registration number for this
supplier site.
16. In the Business Income Subcategory field, from the list of values, select a
Business income subcategory code.
This field is required if:
■ you checked the Allow Withholding Tax check box, and
■ you selected Business Withholding Certificate Type as the withholding
certificate type for the withholding tax code that you assigned to this
supplier site.
18. Save your work.

Defining Suppliers
To define VAT information for suppliers:

1. Navigate to the Suppliers window.
2. Query a supplier.
3. If applicable, enter the supplier’s taxpayer ID in the Taxpayer ID field.
4. If applicable, enter the supplier’s tax registration number in the Tax
Registration Number field.
5. Navigate to the Invoice Tax tabbed region.
6. In the Invoice Tax Code field, from the list of values, select the default VAT code
that you want to assign to this supplier.
You can also assign a default VAT code at the supplier site level.
7. Navigate to the Supplier Sites window.
8. Query or enter the supplier site that you want.
10. In the Industry Classification field, enter the industry classification code for this
supplier.
11. In the Industry Subclassification field, enter the industry subclassification code
for this supplier.
12. In the Taxable Person field, enter the name of the person who is responsible for
VAT transactions at the supplier site.
This field is required if you entered an industry classification code in step 14.
14. Navigate to the Invoice Tax tabbed region.

Defining Suppliers
15. In the Invoice Tax Code field, from the list of values, select the default VAT code
that you want to assign to this supplier.
You can also assign a default VAT code at the supplier level.
16. If this supplier site is an independent site with its own tax registration number,
navigate to the Tax Reporting tabbed region.
supplier site.
18. Save your work.

Korean Withholding Tax Report
Korean Withholding Tax Report 2001/09/07 16:35:23

Page 1
Tax
Business Registration
Organization Type Subcategory Supplier Name Number GL Date Invoice Number Invoice Amount Payment Amount
-------------------- --------------- ------------------------------ -------------- ---------- -------------------- --------------- ---------------
Income Taxable Tax Domestic Foreign Income
Tax Code Basis Rate Income Tax Resident Tax Withholding Tax Type Income Category Category
-------------------- --------------- ---- --------------- --------------- -------------------- --------------- ---------------
{Individual '**** '* {Writer '**** ' Song Writer 2000/07/26 WHT014 1.000.000
Other 40 TJN 1.000.000 40 -400.000 0 {Income Withholding {Other Income '
Resdnt 4 TJN 0 4 0 -40.000 {Resident Withholdin
---------------
--------------- ---------------
Total 0
-400.000 -40.000
2000/07/30 WHT014 1.000.000

Other 40 TJN -1.000.000 40 400.000 0 {Income Withholding {Other Income '
Resdnt 4 TJN 0 4 0 40.000 {Resident Withholdin
---------------
--------------- ---------------
Total 0
400.000 40.000
2000/08/15 WHT014 1.000.000

Other 40 TJN 1.000.000 40 -400.000 0 {Income Withholding {Other Income '
Resdnt 4 TJN 0 4 0 -40.000 {Resident Withholdin
---------------
--------------- ---------------
Total 0
-400.000 -40.000
End of Report
Use the Korean Withholding Tax report to review your company’s tax withholding
on income payments to suppliers. The Korean Withholding Tax report is not a
statutory report; use this report for review purposes only.
The Korean Withholding Tax report is an RXi report. The default attribute set
displays each payment to suppliers where taxes were withheld. The report provides
the required information on the supplier, including the organization type and tax
registration number, and shows all relevant withholding information, including the
invoice amount, the withheld tax amounts, and the tax rate. The report also displays
the withholding tax type and income category of each payment. You can copy this
attribute set and customize the layout to suit your reporting needs.
See also: Working with Attribute Sets, Oracle Financials RXi

Reports Administration Tool User Guide
See also: Using the RXi Reports Concurrent Program, Oracle

Financials RXi Reports Administration Tool User Guide

Use the Standard Request Submission windows to submit the Korean Withholding
Tax report.
See also: Using Standard Request Submission, Oracle

Applications User Guide
Prerequisites
Before submitting the Korean Withholding Tax report, you must:
■ Define withholding tax codes.
Use the globalization flexfield in the Tax Codes window to associate the tax
reporting location and an income category code to a tax code. For more
information, see Step 5. Define Withholding Tax Codes on page 1-13.
■ Define withholding tax information for your suppliers. For more information,
see Defining Suppliers on page 1-18.
■ Set the MO: Top Reporting Level profile option to Set of Books at the
responsibility level. The Korean Withholding Tax report is run at the set of
books level.
■ Set the MO: Operating Unit profile option to the organization that you want to
associate to the current responsibility. Set this profile option at the responsibility
level.
Report Parameters
GL Date From
Enter the earliest payment date that you want to report on.
The Korean Withholding Tax report selects all Withholding Tax tax type invoice
distributions with General Ledger dates on or after the date that you enter.
GL Date To
Enter the latest payment date that you want to report on.
The Korean Withholding Tax report selects all Withholding Tax tax type invoice
distributions with General Ledger dates on or before the date that you enter.

Supplier Name From

Enter the starting name of the supplier range that you want to report on. You can
enter either a supplier range or a supplier tax registration number.
To report on all suppliers, leave the Supplier Name From, Supplier Name To, and
Supplier Tax Registration Number fields blank.
Use this parameter for submitting withholding certificates only.
Supplier Name To
Enter the ending name of the supplier range that you want to report on.
Supplier Tax Registration Number

Enter the tax registration number of the supplier that you want to report on. You
can enter either a supplier range or a supplier tax registration number.
To report on all suppliers, leave the Supplier Name From, Supplier Name To, and
Supplier Tax Registration Number fields blank.
Invoice Number
Enter the supplier invoice number that you want to report on.
If you leave this field blank, all invoices for the suppliers that you selected are
displayed.
Reporting Level
Specify the reporting level for this report.
The reporting level that you can select is restricted by the MO: Top Reporting Level
profile option that you defined for your responsibility. The default is Operating Unit.
Reporting Context
Specify the reporting context for the chosen reporting level.
Depending on what you entered in the Reporting Level parameter, the Reporting
Context list of values shows valid sets of books, legal entities, or operating units for
your responsibility. The default is the organization that you defined for the
MO: Operating Unit profile option.

Accounting Flexfield From

Enter the first account that you want to report from. You must provide a full range
of accounts.
Accounting Flexfield To
Enter the last account that you want to report to. You must provide a full range of
accounts.
Organization Type
Select the organization type that you want to report on.
If you leave this parameter blank, all organization types are displayed.
Location
Select the company location whose tax withholding you want to report on.
If you leave this parameter blank, withholding information for all company
locations is displayed.
Domestic Income Category

Select the domestic income category that you want to report on.
If you leave this parameter blank, withholding information for all domestic income
categories is displayed.
Foreign Income Category

Select the foreign income category that you want to report on.
If you leave this parameter blank, withholding information for all foreign income
categories is displayed.
Column Headings
This table shows the column headings.
In this column... Oracle Payables prints...

Organization Type The supplier’s organization type.
Business Subcategory The supplier’s business subcategory.
Supplier Name The supplier’s name.
Tax Registration The supplier’s tax registration number.
Number
GL Date The transaction’s General Ledger date.

In this column... Oracle Payables prints...

Invoice Number The transaction’s invoice number.
Invoice Amount The transaction’s invoice amount.
Payment Amount The payment made on the invoice, after taxes.
Note: This column displays the payment amount of the
invoice, after taxes, only when the Apply Withholding
Tax option is set to At Payment Time in the Payables
Options window. After you select an option, you should
not switch from one method of withholding to another
method. For more information, see Step 3. Enable
Withholding Tax on page 1-9.
Tax Code The tax code that Payables applies to this invoice.
Income Taxable Basis The taxable base of this invoice, if you selected Income
Withholding as the withholding tax type for the specified
tax code.
Tax Rate The withholding tax rate that you associated with the
specified tax code.
If Recognized Expense is applicable, the report displays
the nominal withholding tax rate.
Income Tax The withholding tax amount that Payables calculates
for this invoice.
Resident Tax The Resident withholding tax surcharge that Payables
calculates on the withholding tax amount for this
invoice.
Withholding Tax Type The withholding tax type associated with the specified
tax code.
Domestic Income The domestic income category code associated with the
Category specified tax code.
Foreign Income The foreign income category code associated with the
Category specified tax code.

2
Oracle Receivables
This chapter overviews how to enter VAT information for your customers.
Oracle Receivables 2-1

Defining Customers
Defining Customers
Use the Customers window to assign tax groups to customers and customer sites.
Use the globalization flexfield in the Customer Addresses window to assign tax
information to your customer sites.
See also: Customers, Oracle Receivables User Guide
To define withholding information for suppliers:

1. Navigate to the Customers window.
2. Query a customer.
3. If applicable, enter the customer’s taxpayer ID in the Taxpayer ID field.
4. If applicable, enter the customer’s tax registration number in the Tax
Registration Num field.
5. Navigate to the Classification tabbed region.
6. In the Tax Code field, enter the VAT code or tax group for this customer, if
desired.
7. Navigate to the Addresses tabbed region.
8. Select or enter the customer site that you want.
9. Press the Open button.
The Customer Addresses window appears.

Defining Customers
11. In the Taxable Person field, enter the name of the person who is responsible for
VAT transactions at the supplier site.
This field is required if you entered an industry classification code in step 14.
12. In the Industry Classification field, enter the industry classification code for this
supplier.
13. In the Industry Subclassification field, enter the industry subclassification code
for this supplier.
15. Navigate to the Business Purposes tabbed region.
16. Press the Open button.

The Business Purpose window appears.
customer site, if desired.
18. In the Tax Code field, enter the VAT code or tax group for this customer site, if
desired.
19. Close the Business Purpose window.
20. Save your work.
Oracle Receivables 2-3

Defining Customers

3
VAT in Korea
This chapter describes VAT setup and reporting in Korea.
VAT in Korea 3-1

VAT in Korea
VAT in Korea
In Korea, companies are required to report both input and output Value Added Tax
(VAT) to the proper tax authority on a regular basis. There are over 150 tax
authorities throughout the country and each tax authority has a tax jurisdiction that
does not overlap with other tax jurisdictions. A company must register each
company site that operates within a tax jurisdiction.
With Oracle Financials for Korea, you can:
■ maintain your company’s different company sites, or tax locations
■ maintain your company’s different tax registration numbers
■ identify transactions as either Taxable or Tax-Exempt
■ classify your customers and suppliers with the appropriate industry and
industry subclassification codes
■ furnish a listing of your company’s transactions by tax registration number,
along with other related tax information, to the proper tax authority office
Oracle Financials for Korea provides you with the Korean VAT report to satisfy
the legal reporting requirements for VAT in Korea. This report lists your
company’s transactions by tax registration number. For more information, see
Korean VAT Report on page 3-15.
See Setting Up for VAT on page 3-3 for a list of the prerequisite setup steps that you
must complete before you can use Oracle Financials for Korea to maintain tax
registration numbers and report on your company’s VAT transactions.

Setting Up for VAT
Setting Up for VAT
This section describes the steps for setting up Oracle Financials for Korea to
maintain your company’s tax registration numbers and report on your company’s
VAT transactions. Use this checklist to help you complete the appropriate tasks in
the correct order.
Step Setup task

1 Define Industry Lookups on page 3-4
2 Define Locations on page 3-5
3 Define Organizations on page 3-7
4 Define Payables VAT Codes on page 3-9
5 Define Receivables VAT Codes on page 3-11
6 Define Tax Groups on page 3-14
See also: Setup Steps for Value Added Tax, Oracle Receivables
User Guide
VAT in Korea 3-3

1. Define Industry Lookups
1. Define Industry Lookups
Use the Lookups window to define lookup codes for industry classification codes.
You can select lookup codes from the lists of values after you define them.
Define lookup codes for industry classification codes using the
JAKR_AP_VAT_IND_CLASS lookup type. In the Lookups window, enter Asia
Pacific Localizations in the Application field and a description of the lookup codes in
the Description field, if not already displayed. In the Code and Meaning fields,
enter a code and description for each industry classification that your company
requires.
Examples of industry classification codes are:
■ Mining
■ Manufacturing
■ Utility
■ Construction
■ Maintenance
■ Foods and Accommodation
■ Transportation, Storage, and Telecommunication
■ Real Estate and Business Service
■ Public and Individual Service
■ Forest and Others
You use the industry classification lookup codes when you define locations for your
company. For more information, see Step 2. Define Locations on page 3-5.

Setting Up for VAT
2. Define Locations
Use the Location window to define your company’s various company sites. You
define one location for each company site that has a separate tax registration
number.
You use these locations when you define VAT codes. For more information about
defining VAT codes, see Step 4. Define Payables VAT Codes on page 3-9 and
Step 5. Define Receivables VAT Codes on page 3-11.
You also use the Location window to define a corporate location for each legal
entity. To define a corporate location, enter a corporate identification number in the
globalization flexfield on the Location window. Before you can assign a corporate
identification number to a location, however, you must define a legal entity and
assign the location to the legal entity. For more information, see
Step 3. Define Organizations on page 3-7.
See also: Setting Up Locations, Using Oracle HRMS - The

Fundamentals
To define tax locations for your company:

2. Enter the location that you want.
3. Enter Korea (International) in the Address Style field to enable the Korean
Location Address flexfield.
4. Navigate to the Location Address flexfield.
VAT in Korea 3-5

2. Define Locations
5. Enter your company’s location address and contact information in the available
fields.
8. In the Tax Registration Number field, enter your company’s tax registration
number.
9. In the Taxable Person field, enter your company’s taxable person.
This field is required only if you entered a tax registration number.
Note: Do not enter a corporate identification number at this time.

You enter the corporate identification number after you define a
legal entity. For more information, see Step 3. Define Organizations
on page 3-7.
10. In the Industry Classification field, enter your company’s industry

classification.
11. In the Industry Subclassification field, enter your company’s industry
subclassification.
This field is required if you entered an industry classification in the previous
field.
13. Save your work.

Setting Up for VAT
Use the Organization window to classify your organization and the relationships
among your company’s different organizations. You should also define separate
inventory organizations for your inventory locations.
Note: You do not need to create an organization for each company

location that you define.
See also: Creating an Organization, Using Oracle HRMS - The

Fundamentals
Prerequisites
Before you can assign a location to an organization, you must define a location.
To define an organization for your company:
1. Navigate to the Organization window.
2. Enter a name for your organization.
3. If this organization is a legal entity, specify a location in the Location field.
After you specify a location in the Location field, you must assign a corporate
identification number to this location in the Location window. See below for
more information.
4. Navigate to the Organization Classifications region.
5. In the Name field, from the list of values, select the classification of this
organization.
6. Check the Enabled check box.
7. Repeat steps 5 and 6, if necessary.
8. Save your work.
VAT in Korea 3-7

To define a corporate location:

2. Query the location that you previously defined as a legal entity.
4. In the Corporate Identification Number field, enter your company’s corporate
identification number.
Note: Assign a corporate identification number to only one

location per legal entity.
The other fields in this globalization flexfield may already be populated with
values that you entered when you first defined the location. For more
information, see Step 2. Define Locations on page 3-5.
6. Save your work.

Setting Up for VAT
4. Define Payables VAT Codes
Use the Tax Codes window to define the VAT codes that you associate with your
company’s supplier invoices. For each VAT code that you define, you associate a tax
type, a tax rate, and the account that you charge VAT to. With these VAT codes, you
can record your company’s input VAT.
You can assign a VAT code to your suppliers at these supplier levels:
■ supplier level
■ supplier site level
For more information, see Defining Suppliers on page 1-18.
You should define a different VAT code for each of your company’s locations. At
minimum, you should define one tax code for each location and rate combination.
This table provides an example of VAT codes defined for different locations:
Define this VAT code... For this location...

VAT10%Location1 Tax Location 1
See also: Tax Codes, Oracle Payables User Guide
VAT in Korea 3-9

4. Define Payables VAT Codes
To define Payables VAT codes:

1. Navigate to the Tax Codes window.
3. In the Tax Code field, enter a unique name to describe the VAT code (maximum
of 15 characters).
4. In the Tax Type field, select a tax type from the list of values.
5. In the Tax Rate field, enter the VAT rate that you want to associate with this VAT
code.
9. In the GL Account field, enter the account that you want to charge VAT to.
10. In the VAT Transaction Type field, you can optionally enter the VAT transaction
type for this VAT code.
11. Save your work.

Setting Up for VAT
5. Define Receivables VAT Codes
Use the Tax Codes and Rates window to enter and maintain your VAT codes and
associated tax rates for your company’s customer invoices. For each VAT code that
you define, you associate a tax type, a tax rate, and the account that you charge VAT
to. With these VAT codes, you can record your company’s output VAT.
You can assign a VAT code to your customers at these customer levels:
■ customer ship to and bill to business purpose level
■ customer level
For more information, see Defining Customers on page 2-2.
VAT codes that you define here appear in the Tax Groups window when you define
your tax groups. For more information, see Step 6. Define Tax Groups on page 3-14.
You should define a different VAT code for each of your company’s locations. At
minimum, you should define one tax code for each location and rate combination.
This table provides an example of VAT codes defined for different locations:
Define this VAT code... For this location...

See also: Tax Codes and Rates, Oracle Receivables User Guide
VAT in Korea 3-11

5. Define Receivables VAT Codes
To define Receivables VAT codes:

1. Navigate to the Tax Codes and Rates window.
3. In the Tax Code field, enter a unique name to describe the VAT code (maximum
of 15 characters).
4. In the Tax Type field, select a tax type from the list of values.
5. In the Tax Rate % field, enter the tax rate for this VAT code.
6. Navigate to the Effective tabbed region.
7. In the Effective Dates From and To fields, enter the start and end dates for this
VAT code.
8. Navigate to the Control tabbed region.
9. In the Tax Class field, select whether this is a VAT code for input or output VAT.
10. Check the Inclusive Tax check box if you are defining this VAT code for tax
inclusive VAT.
An inclusive tax VAT code automatically calculates the tax for a transaction line
and includes the tax in the line amount, rather than separately displaying the
tax.
11. Navigate to the More tabbed region.
15. In the GL Account field, enter the account that you want to charge VAT to.

Setting Up for VAT
16. In the VAT Transaction Type field, you can optionally enter the VAT transaction
type for this VAT code.
17. Save your work.
VAT in Korea 3-13

6. Define Tax Groups
6. Define Tax Groups
Use the Tax Groups window to group multiple, conditional VAT codes under one
name. With tax groups, you can include multiple Receivables VAT codes on each
customer invoice line based on conditions that you define.
For example, multi-site companies in Korea have unique VAT codes for their
various locations. Using tax groups, you do not have to know the different VAT
codes for each of your company’s locations when you enter a customer invoice.
Rather, you can group your company’s VAT codes for all of its various locations
within a single tax group, as shown in this table:
For this tax group... Add this VAT code... For this location...
VAT10% VAT10%Location1 Tax Location 1
For each tax group that you create, you then define a condition set based on your
company’s ship from location. When you enter a customer invoice, you assign the
tax group to the invoice. Based on the specific ship from location, Receivables
automatically selects the applicable VAT code from the assigned tax group and
calculates the correct VAT on the invoice line.
See also: Tax Groups, Oracle Receivables User Guide

Korean VAT Tax Report
Korean VAT Tax Report 2001-09-10 17:33:58

Page 1 / 1
Company Name: Reporting Location 1

Company Tax Registration Number: 206-81-51510
Company Representative: MANUFACTURING
Company Address: Seoul Kangnam Samsung 543-210 Korea
Tax Code
------------------------------
Tax
Transaction Registration Industry Industry VAT
Number Name Tax Payer ID Number Classification Subclassification Taxable Amount Tax Amount VAT Type Rate
--------------- -------------------- --------------- --------------- -------------------- -------------------- ------------------ ------------------ --------- ----
0% Site 1
VAT022 HQ 3868141253 386-81-41253 {Mining '**** '**** Importing Agent 1.000.000 0 0
10% Site 1
VAT021 HQ 3868141253 386-81-41253 {Mining '**** '**** Importing Agent 2.000.000 200.000 SALES STD 10
VAT021 HQ 3868141253 386-81-41253 {Mining '**** '**** Importing Agent 500.000 50.000 SALES STD 10
VAT022 HQ 3868141253 386-81-41253 {Mining '**** '**** Importing Agent 1.200.000 120.000 SALES STD 10
End of Report
Use the Korean VAT report to report on your company’s input and output VAT
taxes to the proper tax authority on a regular basis.
The Korean VAT report is an RXi report. The default attribute set lists your
company’s transactions by tax registration number. The report displays other
relevant VAT information, such as the supplier or customer’s tax registration
number, as well as the industry classifications and subclassifications of the reported
transactions. The Korean VAT report displays all transactions in the functional
currency. You can copy this attribute set and customize the layout to suit your
reporting needs.
See also: Working with Attribute Sets, Oracle Financials RXi

Reports Administration Tool User Guide
See also: Using the RXi Reports Concurrent Program, Oracle

Financials RXi Reports Administration Tool User Guide
In addition to Payables and Receivables transactions, the Korean VAT report

includes any transactions entered directly into General Ledger. When you enter tax
journals in General Ledger, you can automatically create additional tax journal lines
using the same tax calculation rules that you defined in Payables and Receivables.
See also: Automatic Tax on Journal Entries, Oracle General Ledger

User Guide
You can submit this report to display VAT information for a single operating unit,
for all operating units within a legal entity, or for all legal entities associated with a
set of books.
VAT in Korea 3-15

Use the Standard Request Submission windows to submit the Korean VAT report.
See also: Using Standard Request Submission, Oracle Applications

User Guide
Prerequisites
Before you can submit the Korean VAT report, you must:
■ Define Payables and Receivables tax codes.
For more information, see Step 4. Define Payables VAT Codes on page 3-9 and
Step 5. Define Receivables VAT Codes on page 3-11.
■ Define VAT information for your suppliers and customers. For more
information, see Defining Suppliers on page 1-18 and Defining Customers on
page 2-2.
■ Set the MO: Top Reporting Level profile option to Set of Books at the
responsibility level. The Korean VAT report is run at the set of books level.
■ Set the MO: Operating Unit profile option to the organization that you want to
associate to the current responsibility. Set this profile option at the responsibility
level.

Report Parameters
Reporting Level
Specify the reporting level for this report.
The reporting level that you can select is restricted by the MO: Top Reporting Level
profile option that you defined for your responsibility. The default is Operating Unit.
Reporting Context
Specify the reporting context for the chosen reporting level.
Depending on what you entered in the Reporting Level parameter, the Reporting
Context list of values shows valid sets of books, legal entities, or operating units for
your responsibility. The default is the organization that you defined for the
MO: Operating Unit profile option.
Tax Class
Select the type of transactions that you want to report on. Possible values are:
■ Input
■ Output
■ All
Source
Select the source that you want to report on. Valid values are AP, AR, GL, and All.
GL Date From
Enter the earliest General Ledger date that you want to report on.
GL Date To
Enter the latest General Ledger date that you want to report on.
VAT in Korea 3-17

Transaction Date From

Enter the starting transaction date for the date range that you want to report on.
For invoices, credit memos, and adjustments, the transaction date is the date of the
transaction. For receipt applications, the transaction date is the application date of
the associated cash receipt. For miscellaneous cash transactions, the transaction date
is the date of the receipt.
Transaction Date To
Enter the ending transaction date for the date range that you want to report on.
For invoices, credit memos, and adjustments, the transaction date is the date of the
transaction. For receipt applications, the transaction date is the application date of
the associated cash receipt. For miscellaneous cash transactions, the transaction date
is the date of the receipt.
VAT Transaction Type From

Select the starting VAT transaction type that you want to report on.
The Korean VAT report displays all the tax codes that you associated with this VAT
transaction type.
VAT Transaction Type To

Select the ending VAT transaction type that you want to report on.
The Korean VAT report displays all the tax codes that you associated with this VAT
transaction type.
Tax Type From

Select the starting tax type that you want to report on.
The Korean VAT report displays all the tax codes that you associated with this tax
type.
Tax Type To
Select the ending tax type that you want to report on.
The Korean VAT report displays all the tax codes that you associated with this tax
type.
Tax Code From

Select the starting tax code that you want to report on.
If you leave this parameter blank, VAT information for all tax codes is displayed.

Tax Code To
Select the ending tax code that you want to report on.
If you leave this parameter blank, VAT information for all tax codes is displayed.
Third Party Reporting Ledger
If you choose Supplier, Receivables extracts merchant information for expense-report
invoices at the Transaction Line summary levels. If you choose Merchant,
Receivables extracts merchant information for expense-report invoices at all
summary levels.
Report Headings
This table shows the report headings.
In this heading... Oracle Financials prints...

Company Name Your company’s name.
Company Tax Registration Your company’s tax registration number.
Number
Company Representative Your company’s taxable person.
Company Address Your company’s address.
Column Headings
This table shows the column headings.
In this column... Oracle Financials prints...

Tax Code The transaction’s tax code.
Transaction Number The invoice number of the Payables or Receivables
transaction, or the General Ledger journal entry
number.
Name The supplier or customer’s name where you
entered the tax registration number (either at the
site or header level).
Taxpayer ID The supplier or customer’s taxpayer ID.
Tax Registration Number The supplier or customer’s tax registration
number.
Industry Classification The supplier or customer’s industry classification.
VAT in Korea 3-19

In this column... Oracle Financials prints...

Industry Subclassification The supplier or customer’s industry
subclassification.
Taxable Amount The transaction’s taxable base.
Tax Amount The transaction’s tax amount.
VAT Type The VAT transaction type associated with the
specified tax code.
VAT Rate The VAT rate associated with the specified tax
code.

A
Using Globalization Flexfields
This appendix describes how to use globalization flexfields.
Using Globalization Flexfields A-1

Oracle Financials for Korea uses globalization flexfields that let you enter
country-specific information in Oracle Payables and Oracle Receivables. Your
system administrator should complete setup steps to enable globalization flexfields
for your country-specific responsibilities.
See also: Setting Up Globalization Flexfields, Oracle Financials

Country-Specific Installation Supplement
There are globalization flexfields on these windows:
Oracle Payables
■ Location
■ Supplier Sites
■ Tax Codes
Oracle Receivables
■ Customer Addresses
■ Location
■ Tax Codes and Rates
The globalization flexfield appears in the window after you complete all setup steps
to enable globalization flexfields. The globalization flexfield is enclosed in round
brackets. Click in the globalization flexfield to display the pop-up window.
A-2 Oracle Financials for Korea User Guide

Index
B K
Business income subcategories, 1-12 Korean VAT report
Business withholding, 1-2 column headings, 3-19
overview, 3-15
prerequisites, 3-16
C
report headings, 3-19
Corporate locations report parameters, 3-17
defining, 1-4, 3-5 Korean Withholding Tax report
Customers column headings, 1-25
defining, 2-2 overview, 1-22
Customers window, 2-2 prerequisites, 1-23
report parameters, 1-23
G
General withholding, 1-2 L
Globalization flexfields Location window, 1-4, 3-5
Customer Addresses window, 2-2 Locations
Location window, 1-4, 1-5, 1-8, 3-5, 3-6, 3-8 defining corporate locations, 1-4, 3-5
Oracle Payables, A-2 defining for VAT, 3-5
Oracle Receivables, A-2 Lookups window, 1-10, 3-4
Supplier Sites window, 1-18, 1-19, 1-20, 2-2
Tax Codes and Rates window, 3-12
Tax Codes window, 1-13, 1-14, 3-10
M
using, A-2 MO: Operating Unit profile option, 1-23, 3-16
MO: Top Reporting Level profile option, 1-23, 3-16
I
Income category codes O
defining, 1-10 Oracle Payables
Income withholding, 1-2 setting up withholding tax, 1-3
Industry classification codes, 3-4 Organization window, 1-7, 3-7
Organizations
defining, 1-7, 3-7
Index-1
P Tax registration numbers
entering, 1-4
Payables Options window, 1-9
Payables VAT codes
defining, 3-9 V
Profile options VAT
MO: Operating Unit profile option, 1-23, 3-16 defining customers, 2-2
MO: Top Reporting Level profile option, 1-23, defining industry lookups, 3-4
3-16 defining locations, 3-5
defining organizations, 3-7
R defining Payables VAT codes, 3-9
defining Receivables VAT codes, 3-11
Receivables VAT codes
defining tax groups, 3-14
defining, 3-11
overview, 3-2
Recognized expenses, 1-15
setup checklist, 3-3
Reports
VAT code
Korean VAT report, 3-15
defining for Payables, 3-9
Korean Withholding Tax report, 1-22
defining for Receivables, 3-11
RXi reports, 1-22, 3-15
VAT codes
Resident withholding, 1-2
grouping conditional codes, 3-14
and withholding tax groups, 1-17
description, 1-13
RXi reports W
Korean VAT report, 3-15 Windows
Korean Withholding Tax report, 1-22 Customers window, 2-2
Location window, 1-4, 3-5
S Locations window, 1-4
Lookups window, 1-10, 3-4
Standard Request Submission windows
Organization window, 1-7, 3-7
Korean VAT report, 3-16
Payables Options window, 1-9
Korean Withholding Tax report, 1-23
Standard Request Submission windows, 1-23,
Suppliers
3-16
defining, 1-18
Suppliers window, 1-18, 1-20, 2-2
Suppliers window, 1-18
defining withholding information, 1-18, 1-20,
Tax Codes window, 1-13, 3-9
2-2
Tax Groups window, 3-14
Withholding Tax Details window, 1-13
T Withholding Tax Groups window, 1-17
Withholding tax
defining income category codes, 1-10
Tax Codes window, 1-13, 3-9
defining locations, 1-4
defining tax codes and rates, 1-13
defining organizations, 1-7
Tax groups
defining suppliers, 1-18
defining, 3-14
defining tax codes, 1-13
Tax Groups window, 3-14
defining tax groups, 1-17
Tax journals, 3-15
Index-2
enabling, 1-9
overview, 1-2
setup checklist, 1-3
Withholding tax codes, 1-13
Withholding Tax Details window, 1-13
Withholding tax groups, 1-17
Withholding Tax Groups window, 1-17
Index-3
Index-4

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Oracle® Financials for Korea

Part No. A81257-04

Copyright © 1998, 2004, Oracle. All rights reserved.

Send Us Your Comments .................................................................................................................... v

A Using Globalization Flexfields

Accessibility of Code Examples in Documentation

Accessibility of Links to External Web Sites in Documentation

Related User Guides

Oracle Applications User’s Guide

Guides Related to This Product

Oracle Financials Common Country Features User Guide

Oracle Financials Country-Specific User Guides

Oracle Financials RXi Reports Administration Tool User Guide

Oracle General Ledger User Guide

Oracle Receivables User Guide

Using Oracle HRMS - The Fundamentals

Installing Oracle Applications

Oracle Financials Country-Specific Installation Supplement

Upgrading Oracle Applications

Oracle Applications System Administrator’s Guide

Oracle Alert User’s Guide

Maintaining Oracle Applications

Oracle Applications User Interface Standards for Forms-Based Products

Oracle Financials Open Interfaces Guide

Oracle Applications Character Mode to GUI Menu Path Changes

Oracle Workflow Administrator's Guide

Oracle Workflow Developer's Guide

Oracle Workflow User's Guide

Oracle Workflow API Reference

Oracle Applications Flexfields Guide

Oracle eTechnical Reference Manuals

Oracle Applications Message Manual

Oracle Payables 1-1

Withholding Tax in Korea

In Korea, companies are required to withhold tax on certain types of income

Legal reporting for withholding tax

1-2 Oracle Financials for Korea User Guide

Setting Up Oracle Payables for Withholding Tax

Step Setup task

See also: Setting Up Withholding Tax, Oracle Payables User Guide

Oracle Payables 1-3

See also: Setting Up Locations, Using Oracle HRMS - The

1-4 Oracle Financials for Korea User Guide

To define company information:

Oracle Payables 1-5

9. In the Taxable Person field, enter your company’s taxable person.

Note: Do not enter a corporate identification number at this time.

10. Press the OK button.

11. Save your work.

1-6 Oracle Financials for Korea User Guide

Note: You do not need to create an organization for each company

See also: Creating an Organization, Using Oracle HRMS - The

Oracle Payables 1-7

To define a corporate location:

Note: Assign a corporate identification number to only one

1-8 Oracle Financials for Korea User Guide

3. Enable Withholding Tax

See also: Payables Options, Oracle Payables User Guide

To define Payables Options for tax withholdings: