In Oracle Fusion HCM, the creation of a Tax Reporting Unit (TRU) is a direct consequence of configuring a Legal Entity (LE) for payroll purposes. When a Legal Entity is designated as a Payroll Statutory Unit (PSU), the system automatically makes the Legal Reporting Units (LRUs) associated with that LE available as TRUs. The TRU is the HCM-specific representation of an LRU, used for grouping workers for tax and social insurance reporting. This automated process ensures that the legal reporting structure is correctly mirrored in the payroll application for statutory compliance.

B. A Payroll Statutory Unit (PSU) is not directly identified as a Tax Reporting Unit (TRU). A PSU is a legal entity, whereas a TRU is derived from a Legal Reporting Unit associated with that PSU.

C. A Legal Entity is not directly identified as a Tax Reporting Unit. A TRU is the HCM representation of a Legal Reporting Unit, which is a subdivision of a Legal Entity.

D. The trigger for creating TRUs is the designation of a Legal Entity as a Payroll Statutory Unit, not merely as a Legal Employer. The PSU classification specifically enables payroll and tax functions.

1. Oracle Fusion Global Human Resources Cloud Implementation Guide (Release 13

Update 24B)

Chapter: Define Legal Entities for Human Capital Management

Section: Tax Reporting Units.

The documentation states

"A tax reporting unit is the Oracle Fusion Human Capital Management (HCM) version of a legal reporting unit. When you identify a legal entity as a payroll statutory unit

the application transfers the legal reporting units that are associated with that legal entity to Oracle Fusion HCM as tax reporting units." This directly supports answer A.

2. Oracle Help Center

Implementing Global Human Resources (Release 13

Update 24B)

Document ID: F67631-06

Chapter 5: Define Legal Entities for Human Capital Management

Section: Payroll Statutory Units

Legal Employers

and Tax Reporting Units: How They Work Together.

This section explains the relationship: "When a legal entity is marked as a payroll statutory unit

its associated legal reporting units become available as tax reporting units that you can use to group and report on employee tax and social insurance." This confirms the process described in answer A and refutes options B

C

and D.