Tax Calculation 

Use

The system uses different methods to calculates taxes, depending on whether you enter a purchase order in Materials Management (MM) or a sales order in Sales and Distribution (SD), as described below. If you post a document directly in Financial Accounting (FI), certain tax-related data is not available, such as the material and the NCM code; the system proceeds in the same way it does in MM, but it does not find this data. If default rates are maintained for ICMS, IPI and ISS, the system uses these in FI.

When the system calculates taxes, it:

·        Determines whether a given tax is to be calculated (based on the tax codes)

·        Determines which rate applies, and subsequently the tax amounts and tax base values per line item

·        Transfers the calculated tax amounts per line item to the nota fiscal

The system accounts for tax situations and tax laws, as well as tax regions and tax jurisdiction codes.

Prerequisites

You have made all Customizing settings required for taxes in Brazil.

The Tax Manager's Workplace enables you to make all tax-related Customizing settings from a single point of access.

Note, also, that a Business Configuration Set is available that contains most of the Customizing settings required in MM/FI and SD (see Taxes: Customizing for details).

Tax Calculation in MM

In MM, the system uses the calculation procedure assigned to Brazil. When you create a company code using the template for Brazil, the system sets the TAXBRJ procedure automatically (but we do recommend that you change it to TAXBRA, as described in Calculation Procedure, link above). The delivered procedures allow for all the FI/MM tax codes supplied with the system. 

For the Brazilian tax calculation procedures to function correctly, be sure that the Tax base is net value and Discount base is net value fields are deactivated in Customizing for your company code.

Tax Calculation in SD

In SD, the system calculates taxes using the pricing procedures supplied with the system. These procedures require information stored in SD tax codes.