Credits :  Mohan Iyer ( Oracle E-Business Suite Financials R12: A Functionality Guide )

E-Business Tax is based on a global system architecture. It is configurable and
scalable for adding and maintaining country-specific c tax content. With E-Business
Tax, you can model your tax requirements according to the needs of local and
international tax requirements.

A brief explanation for each task is as follows:

 Basic tax configuration: The basic tax configuration includes the regime-to-rate fl ow for each Tax Regime. These involve defining a regime, tax, a tax status (standard or exempt), and rates—both for charging tax and recovery rates.

Tax Jurisdictions: A Tax Jurisdiction is the geographic area where a tax is levied by a specific  tax authority.

Party tax profiles : You define  profiles for the parties involved in tax transactions that are set up through a legal entity and Trading Community Architecture. Party tax profiles contain all of the tax information for each party, including tax registrations and party fiscal classifications.

These parties can be you as well as the party you transact with, namely, customers and suppliers.

Fiscal classifications: A fiscal classification is the  way that a tax authority classifies each part of a transaction that includes parties and party sites, and products among other aspects. Fiscal classifications assist in configuring tax rules. The classifications provide one or more qualifications to identify when and how taxes should be calculated.

Exemptions and exceptions: Tax exemptions let you define a party/party site or product as partially or fully exempt from tax. Tax exceptions let you define a special rate for specific products.

Country default controls: This subcomponent lets you specify certain defaults country wise. These defaults are used during transaction entry.

For full chapter – please refer below pdf

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