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Entering content frameFunction documentation Withholding Tax 

Use

In Brazil, you use the

Structure linkextended withholding tax function; and withholding tax is levied when you enter an invoice.

When you create a company code using the template for Brazil, the system automatically makes all the settings required for the following withholding taxes:

  • ISSF (in Portuguese, Imposto Sobre Servicos na Fonte)

If the vendor is a natural person and is not registered in the city where he or she is providing the service, then the customer withholds

ISS. The system calculates ISS according to the standard ISS calculation, and the withheld tax itself is called ISSF. The ISSF amount does not affect the calculation of other taxes.
  • IRRF (in Portuguese, Imposto de Renda Retida na Fonte)

IRRF is withheld in certain cases. The system does not calculate IRRF automatically; you must, therefore, set the applicable percentage rate for each business transaction using a specific withholding code, IRRF for companies (which can also be applied in combination with

ISS) or IRRF for natural persons (which can be applied in combination with INSS). If the natural person is not registered in the city where the service is rendered, then ISSF is withheld, as described above.
  • FCPS and FUNRURAL

These taxes are withheld on purchases from farmers.

Prerequisites

To be able to use extended withholding tax, you must define a number of Customizing settings for Financial Accounting (FI):

  • Maintain
withholding tax types
  • Maintain
  • withholding tax codes
  • Assign withholding tax types to company code
  • Define G/L account codes for each withholding tax type and code combination
  • Also refer to

    Structure linkExtended Withholding Tax: Customizing.

    Integration

    In Logistics Invoice Verification (MM-IV-LIV), the system can transfer the following withholding tax data to the nota fiscal:

    • The withholding tax amount for selected withholding tax types

    The system sums the amount of these withholding tax types and deducts this from the total value of the nota fiscal.

    • Generated variable header texts with the withholding tax amount for selected withholding tax types

    To activate the value transfer, assign the text key for the header text, and define text keys and corresponding texts, you need to make the appropriate settings in

    Customizing for Invoice Verification. To insert the withholding tax amount into such a header text, use the argument WTAMOUNT.Leaving content frame