Two-digit code that identifies a Brazilian region for purposes of tax calculation.

The system calculates ICMS based on materials' ship-from and ship-to tax regions. For Brazilian company codes, the ship-from and ship-to locations are stored in the tax jurisdiction code, which can be found in the following master records: plant, customer, vendor, and company code.

When you create one of the above-mentioned master records, the system automatically determines the tax jurisdiction code based on the region (geographical) that you enter. If a single tax region corresponds to the region, the system assigns this tax region to the master record in the Jurisdict. code field. If more than one tax region is assigned to the region, you must choose the appropriate tax region for the plant, customer, vendor, or company code.

You can maintain tax regions in Customizing for Financial Accounting (FI), by choosing ® Financial Accounting Global Settings ® Tax on Sales/Purchases ® Basic Settings ® Brazil ® Define Brazilian Tax Regions. Here you establish the assignment of tax regions to regions. Each region can have one or more tax regions assigned to it. For example, the region Amazonas has assigned to it the tax regions Amazonas and Zona Franca Manuas. In most cases, however, there is one tax region for every region, and they both have the same code.

The system handles foreign customers and vendors a bit differently. Additional tax regions have been defined (where the region is left blank), for example, XX for trade with the United States. You can then assign a tax region to the foreign countries you need by choosing the same path above, but the activity Define Tax Regions for Foreign Customers/Vendors.

When you then post a purchase order in Materials Management (MM) or a sales order in Sales and Distribution (SD), the system uses the tax jurisdiction code from the respective master record.