Oracle Fusion Global Human Resources

Legal Structures

Platform Technology Solutions (PTS)

Oracle Development

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Legal & Payroll related Structures
Enterprise

LDG

PSU

Legal Jurisdiction
Legal Employer Legal Authority

TRU

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Legal Structures - Agenda
1 Legal Jurisdictions
2 Legal Authorities

3 Legal Entity / Legal Employer

4 Legal Reporting Units / Tax Reporting Units
5 Payroll Statutory Unit

6 Legislative Data Group

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Legal Structures
1 Legal Jurisdictions
2 Legal Authorities

3 Legal Entity / Legal Employer

4 Legal Reporting Units / Tax Reporting Units
5 Payroll Statutory Unit

6 Legislative Data Group

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Legal Jurisdictions

• Jurisdiction is where a particular piece of legislation applies, perhaps group

of countries, country, state, county, or parish
• French Labor Law, Singapore Transactions Tax Law, and US Income Tax Laws
are examples of particular legislation that apply to legal entities operating
in different countries' jurisdictions
• You can create legal jurisdictions in addition to the pre-defined ones

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Legal Jurisdictions
• Types of jurisdictions are
– Identifying Jurisdiction
• An identifying jurisdiction is the first jurisdiction you must register with to be allowed to do business
in a country. For each legal entity, select an identifying jurisdiction. If there is more than one
jurisdiction that a legal entity needs to register with to commence business, select one as the
identifying jurisdiction. Typically the identifying jurisdiction is the one you use to uniquely identify
your legal entity
– Income Tax Jurisdiction
• Income tax jurisdictions impose taxes on your financial income generated by all your entities within
their jurisdiction
– Transaction Tax Jurisdiction
• Tax jurisdictions and their respective rates are provided with transactions from the suppliers, and
require periodic maintenance. Create transaction tax jurisdictions through Oracle Fusion Tax in a
separate business flow, because of the specific needs and complexities of various taxes. Use
transaction tax jurisdiction for legal reporting of sales tax and value added tax
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Legal Structures
1 Legal Jurisdictions
2 Legal Authorities

3 Legal Entity / Legal Employer

4 Legal Reporting Units / Tax Reporting Units
5 Payroll Statutory Unit

6 Legislative Data Group

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Legal Authorities

• A legal authority is a government or legal body that is charged with powers

to make laws, levy and collect fees and taxes, and remit financial
appropriations for a given jurisdiction. There are predefined legal
authorities in the application, you can create your own in addition
• The Internal Revenue Service is responsible for collecting taxes and the
interpretation and enforcement of the Internal Revenue Code of the United
States
• Legal authority information is printed on your tax reports to meet some
countries’ requirements, such as India and Brazil

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Legal Authorities

• Legal authorities are defined in the Oracle Fusion Legal Entity Configurator
• Tax authorities are a subset of legal authorities and are defined using the
same setup flow
• Legal authorities are not mandatory in Oracle Fusion Human Capital
Management (HCM), but are recommended and are generally referenced
on statutory reports

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Legal Structures
1 Legal Jurisdictions
2 Legal Authorities

3 Legal Entity / Legal Employer

4 Legal Reporting Units / Tax Reporting Units
5 Payroll Statutory Unit

6 Legislative Data Group

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Legal Entities / Legal Employer

• A legal entity is a recognized party with rights and responsibilities given by

legislation
• Define a legal entity for each registered company or other entity recognized
in law for which you want to:
– record assets, liabilities, and income;
– pay transaction taxes;
– perform intercompany trading

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Legal Entities / Legal Employer

• The contracting party on any transaction is always the legal entity.

– Own the assets of the enterprise (as part of Fixed Assets and General Ledger)
– Record sales and pay taxes on those sales (as part of Accounts Receivable)
– Make purchases and incur expenses (as part of Payables)
– Perform other transactions
• Legal entities can be identified as legal employers and therefore, are
available for use in Oracle Fusion Human Capital Management (HCM)
applications.

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Legal Structures
1 Legal Jurisdictions
2 Legal Authorities

3 Legal Entity / Legal Employer

4 Legal Reporting Units / Tax Reporting Units
5 Payroll Statutory Unit

6 Legislative Data Group

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Legal Reporting Units / Tax Reporting Units

• Each of your legal entities has one or

more legal reporting units to support
local reporting requirements
– Legal reporting units were referred to as
establishments in R12 EBS
– When a legal entity is created, a main LRU with the
same name gets automatically created

• A legal reporting unit is the lowest level

component of a legal structure that
requires registrations

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Legal Reporting Units / Tax Reporting Units
• Plan and define your legal reporting units at both the local and national
levels if you operate within the administrative boundaries of a jurisdiction
that is more granular than country. For example, in India, income tax exists
at the national level where as professional tax exists at the state level
• You must register your legal entities and reporting units with legal
authorities in the jurisdictions where you conduct business
• A tax reporting unit is the Oracle Fusion HCM version of the legal reporting
unit in Oracle Fusion Applications
• Use a tax reporting unit to group workers for the purpose of tax and social
insurance reporting

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Legal Structures
1 Legal Jurisdictions
2 Legal Authorities

3 Legal Entity / Legal Employer

4 Legal Reporting Units / Tax Reporting Units
5 Payroll Statutory Unit

6 Legislative Data Group

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Payroll Statutory Units

• Legal entities are required to pay payroll tax and social insurance such as
social security on your payroll
• You can register payroll statutory units (PSUs) to pay and report on payroll
tax and social insurance on behalf of many of your legal entities
• Payroll statutory units enable you to group legal employers so that you can
perform statutory calculations at a higher level
• In some cases, a legal employer is also a payroll statutory unit

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Payroll Statutory Units

• A legal employer can belong to only one payroll statutory unit

• You associate a legislative data group (LDG) with a payroll statutory unit to
provide the correct payroll information for workers
• When you set up legal entities, you can identify them as legal employers
and payroll statutory units, which makes them available for use in Oracle
Fusion Human Capital Management (HCM)

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Legal Structures
1 Legal Jurisdictions
2 Legal Authorities

3 Legal Entity / Legal Employer

4 Legal Reporting Units / Tax Reporting Units
5 Payroll Statutory Unit

6 Legislative Data Group

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Legislative Data Groups (LDG)
• Legislative data groups are a means of partitioning payroll and related data
• At least one legislative data group is required for each country where the
enterprise operates
• Oracle Fusion Payroll is organized by legislative data groups

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Legislative Data Groups (LDG)
• Each LDG marks a legislation in which payroll is processed, and is
associated with a legislative code, currency and its own cost key flexfield
structure
• LDG is a boundary that can share the same set up and still comply with the
local laws
• Each legislative data group is associated with one or more payroll statutory
units
• Each payroll statutory unit can belong to only one legislative data group

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Legislative Data Groups (LDG)

• For payroll purposes, it is recommended to have one legislative data group

for each country, since you define elements, formulas, and payroll
definitions for a legislative data group.
• If you have multiple legislative data groups for a country, you will need to
define the information again for each LDG.
• If you are not using payroll, you may want to use legislative data groups
since they are used in extracts and reports

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Org Model
Enterprise

LDG

PSU

Legal Jurisdiction
Legal Employer Legal Authority

TRU

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Org Model
Example
Enterprise Sun Power

Sun Power Sun Power

LDG India UK

Sun Power Sun Power

PSU India UK

Sun Power Sun Power Sun Power

Legal Employer India – South India – North UK

Tax / Legal Reporting Sun Power Sun Power Sun Power Sun Power
Unit Karnataka Kerala UP UK

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Legal & Payroll related Structures
Summary

Fusion Definition
Enterprise Top organization level for structures, entities and data
Legislative Data Group Localized payroll data partition
Payroll Statutory Unit Group of legal employers who are considered a single reporting
group for payroll purposes
Legal Employer A legal entity that employs people
Tax Reporting Unit An organization used to group employees for Payroll reporting

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Legal & Payroll related Structures
Compare

Fusion E-Business Suite PeopleSoft

Legislative Data Group Business Group Regulatory Region
Set ID
Payroll Statutory Unit Tax Group Common Paymaster
Legal Employer Reporting Organization Company

Tax Reporting Unit Government Reporting Entity Company

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Demonstration
Defining a Legal Entity
View Legislative Data Group Associated with Legal Entity

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Activities
Defining a Legal Address
Defining a Legal Entity
View Legislative Data Group Associated with Legal Entity

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