Brazil Condition Based Tax Calculation V1.5

CBT Condition-Based Tax Calculationfor Brazil

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Condition-Based Tax Calculation for Brazil 2

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Table of Contents1 Version History .................................................................................... 62 General information ............................................................................. 82.1 Scope of this document ................................................................................... 82.2 Out of scope .................................................................................................... 82.3 How to use this document ............................................................................... 9

3 Introduction on condition-based tax calculation ............................ 103.1 Classic tax calculation ................................................................................... 103.2 Condition-based tax calculation ..................................................................... 10

4 How to set up the condition-based tax calculation ........................ 114.1 First steps ..................................................................................................... 11

Prerequisites and release notes .................................................................... 114.1.1BC Sets for CBT ............................................................................................ 114.1.2Maintain Settings for external tax calculation ................................................. 124.1.3Tax Jurisdiction Codes .................................................................................. 144.1.4

4.2 CBT customizing settings for ICMS, IPI, PIS and COFINS ............................ 15Activate condition generation ........................................................................ 154.2.1Specify Calculation Procedures for Condition-Based Tax Calculation ........... 154.2.2Assign country to calculation procedure ........................................................ 154.2.3Access sequences ........................................................................................ 164.2.4Condition types ............................................................................................. 164.2.5Account keys ................................................................................................. 184.2.6Define internal codes for tax conditions ......................................................... 194.2.7Assign condition types to internal codes for tax conditions ............................ 194.2.8Assign internal code to tax group .................................................................. 204.2.9Tax groups for dynamic exceptions ............................................................... 204.2.10Assign condition tables to tax rate tables ....................................................... 224.2.11Tax calculation logic ...................................................................................... 234.2.12Tax Types ..................................................................................................... 264.2.13Price conditions ............................................................................................. 274.2.14Customizing Settings MM/FI .......................................................................... 284.2.15Customizing Settings SD ............................................................................... 294.2.16Tax Rates ...................................................................................................... 324.2.17Other (manual) Customizing settings for ICMS, IPI, PIS/COFINS ................. 334.2.18

4.3 CBT Customizing settings for ISS ................................................................. 34Create condition table A601 .......................................................................... 344.3.1Extend pricing field catalog............................................................................ 364.3.2Access sequences for ISS............................................................................. 364.3.3Create condition types for ISS ....................................................................... 384.3.4Define account keys for MM/FI and SD ......................................................... 384.3.5Update calculation procedures for MM/FI and SD ......................................... 394.3.6Create new internal condition codes .............................................................. 394.3.7Create mapping of internal codes to condition types ..................................... 394.3.8

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Assign internal code to tax group .................................................................. 394.3.9Tax groups for dynamic exceptions ............................................................... 394.3.10Assign condition tables to tax rate tables ....................................................... 394.3.11ISS Tax Types............................................................................................... 394.3.12Price conditions for ISS ................................................................................. 404.3.13Assign G/L accounts for ISS posting ............................................................. 404.3.14ISS tax rates.................................................................................................. 404.3.15Map MM tax values to nota fiscal fields ......................................................... 404.3.16Map MM tax laws to nota fiscal fields ............................................................ 414.3.17Map SD tax values to nota fiscal fields .......................................................... 414.3.18Other ISS (manual) Customizing Settings ..................................................... 414.3.19Tax codes for MM and SD ............................................................................. 424.3.20

4.4 CBT Customizing settings for WHT taxes with accumulation ......................... 43Access sequences for withholding taxes ....................................................... 434.4.1Condition types for withholding taxes ............................................................ 434.4.2Define account keys for MM/FI and SD ......................................................... 444.4.3Assign G/L accounts for withholding tax posting ............................................ 444.4.4Create condition value formulas for withholding taxes ................................... 444.4.5Update calculation procedures for MM/FI and SD ......................................... 444.4.6Define internal condition codes for withholding taxes .................................... 454.4.7Mapping of internal codes to condition types ................................................. 454.4.8Assign internal code to tax group .................................................................. 454.4.9Assign condition tables to tax rate tables ....................................................... 454.4.10Tax Types for withholding taxes .................................................................... 454.4.11Check withholding tax countries .................................................................... 454.4.12Define withholding tax type for invoice posting .............................................. 464.4.13Define withholding tax type for payment posting ............................................ 464.4.14Define account key for modified tax amount .................................................. 484.4.15Assign condition type to withholding tax type................................................. 494.4.16Maintain Tax Relevant Classification ............................................................. 504.4.17Maintain Withholding Tax SD Conditions ....................................................... 504.4.18Define withholding tax codes ......................................................................... 514.4.19Define minimum base amount for withholding tax types ................................ 514.4.20Define official collection codes ...................................................................... 524.4.21Maintain Wht tax rates and assign official collection codes............................ 524.4.22Assign withholding tax types to company code .............................................. 524.4.23Activate extended withholding tax ................................................................. 524.4.24Define accounts for withholding tax to be paid over ....................................... 534.4.25Update vendor and customer master data ..................................................... 534.4.26Map MM tax values to nota fiscal fields ......................................................... 534.4.27Map SD tax values to nota fiscal fields .......................................................... 534.4.28

5 Appendix ............................................................................................ 545.1 SAP Standard Tables .................................................................................... 54

Access sequences for application TX (MM/FI) ............................................... 545.1.1

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Access sequences for application V (SD) ...................................................... 545.1.2Condition types for application TX (MM/FI) .................................................... 555.1.3Condition types for application V (SD) ........................................................... 625.1.4Tax calculation procedure TAXBRA .............................................................. 675.1.5Pricing procedure RVABRA ........................................................................... 755.1.6

5.2 Tax codes configuration ................................................................................ 81To activate COFINS non-deductible .............................................................. 815.2.1To activate PIS non-deductible ...................................................................... 825.2.2To activate COFINS deductible ..................................................................... 825.2.3To activate PIS deductible ............................................................................. 825.2.4To activate withholding taxes ........................................................................ 835.2.5To activate ISS .............................................................................................. 835.2.6

5.3 Migration from classical to condition based tax calculation ............................ 83Tools to check and migrate tax customizing to condition records .................. 845.3.1Mass migration program ................................................................................ 845.3.2

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1 Version HistoryDocument Version Valid From Comment

V1 01.12.2012 New documentation for the condition-based tax calculation forBrazil, which replaces the documents:

x Docu_CBT_302.zip attached to the note 664855 (Brazil:New Condition-Based Tax Calculation);

x Customizing_ISS_PIS_COFINS_for_CBT_v2_1.doc at-tached to the note 747607 (Basic Customizing for MP135and ISS legal change Brazil);

x Customizing_WHT_Accumulation_for_CBT.pdf at-tached to the note 916003 (Brazil: Withholding tax accu-mulation for CBT).

V1.1 20.12.2012 Changes to the section 4.1.1: one SAP note has been deleted fromthe preconditions, because it is obsolete.

V1.2 08.01.2013 Changes to the section 5.1.5: some steps of the tax calculationprocedure TAXBRA related to CTe have been updated. The BCsets ZCSC_BR_CBT_TAXBRA_CALC_PROCD_MM hasbeen updated as well.

V1.3 09.04.2013 Correction of RVABRA table (p.78), by steps 914 and 915 the for-mulas were supposed to be in the Alt.CTy column and not in Alt-CBV.

V1.4 11.08.2014 Update of pricing procedure RVABRA and corresponding update ofBC set ZCSC_BR_CBT_RVABRA_CALC_PROCD_SD: subtotal 1added to condition type ICMI in step 300 and deleted from othersteps (see details in chapter 5.1.6).

Update of BC set ZCSC_BR_CBT_CONDITION_TYPES_SD:update of some condition types for withholding taxes and ISS with-held.

Update of BC set ZCSC_BR_CBT_CONDITION_TYPES_MM:condition type BFI2 updated.

Update of BC set ZCSC_BR_CBT_MAP_SD_VLS_TO_NF_FDS:update due to the changes in the SD condition types.

Update of BC set ZCSC_BR_CBT_MAP_MM_VLS_TO_NF_FDS:update of tax type IC1C.

Small changes in the BC set ZCSC_BR_CBT_TAX_TYPES: up-date of PT descriptions.

V1.5 15.08.2014 Update of BC set ZCSC_BR_CBT_CONDITION_TYPES_MM anddocument section 5.1.3 (condition types CCOP, CCOX, CIC0,BX2B, BX7B and BX8B added).

Update of BC set ZCSC_BR_CBT_CONDITION_TYPES_SD anddocument section 5.1.4 (condition types ICOL, BPIL, BX2B, BX7Band BX8B added).

Update of BC set ZCSC_BR_CBT_TAXBRA_CALC_PROCD_MMand document section 5.1.5.

Update of BC set ZCSC_BR_CBT_RVABRA_CALC_PROCD_SDand document section 5.1.6.

Update of BC set ZCSC_BR_CBT_INTERNAL_COND_CODES(internal codes TAXREGION_IN, ICMSDISCOUNT_IN,NF_PIS_PAUTA_BASE, NF_COFINS_PAUTA_BASE,NF_IPI_PAUTA_BASE added).

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Update of BC set CSC_BR_CBT_INT_CODS_TO_CND_TYPS.

Update of BC setsZCSC_BR_CBT_MAP_MM_VLS_TO_NF_FDS andZCSC_BR_CBT_MAP_SD_VLS_TO_NF_FDS.

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2 General informationThis document is aimed at consultants and customers key users to help them implementing the condi-tion-based tax calculation (CBT) for the most important types of taxes required in Brazil.

Additionally to the description of the customizing activities, the present document provides you with theinformation about BC sets which are provided by SAP and which can be used to fill the customizingtables more quickly. In this way, you can check the standard customizing entries and also easily im-plement them in your system.

The present documentation and the BC sets described in this document are attached to the note1706309. The delivered BC sets are valid for release ECC 6.00 and higher. No BC sets for releasesECC 5.00 and lower releases are delivered.

The present documentation also replaces the document attached to the note 664855 and also the BCsets delivered together with the present documentation shall be used instead of the ones provided inthe note 664855.

For general information about the SAP strategy on condition-based tax calculation for Brazil and SAPrecommendations, refer to the note 1538088.

2.1 Scope of this documentThis document describes the settings required by the condition-based tax calculation for Brazil.

This comprises the CBT customizing settings for handling:x IPI and ICMS taxesx PIS and COFINS contributionsx ISS service taxesx Withholding taxes in general andx Withholding taxes with tax base amount accumulation.

The present document provides complete information about the CBT set up and replaces some docu-ments about Brazilian tax calculation, which are listed in the section 1.

The present document focuses on new installations, which means on customers who start implement-ing Brazilian tax settings from scratch. The document is also not aimed to customers using the classi-cal tax calculation for Brazil and who would like to migrate to the condition-base tax calculation. Aboutthis topic see also section 5.2 and following.

Some new developments, like the freight invoice (Conhecimento de Transporte Eletrnico) and thelegal change for PIS and COFINS rates with 4 decimal places, are only partially covered in the presentdocumentation. Details about this can be found in the next section.

2.2 Out of scopeAll customizing activities and BC sets refer to Brazil, which means that they cannot be used for othercountries even if in those countries the condition-based tax calculation is used.

This document does not describe generic customizing settings for Brazil which are not related to con-dition-based taxes. For example, this document does not handle the setup of Brazil specific movementtypes, billing types and so on.

This document does not describe the Tax Managers Workplace in details, but it considers only theparts of the Tax Managers Workplace which apply to CBT settings. For example, the customizing oftax regions, NCM codes and other entities which can be customized in the Tax Managers Work-place are not handled in this document.

The development for CT-e (Conhecimento de Transporte Eletrnico) is included in this documentationonly partially. For simplification reasons, the CT-e content, like condition types and the correspondingentries in the tax calculation procedures for MM and SD, are included in the BC sets mentioned in thepresent documentation. In such cases the CT-e entries are mentioned explicitly so that you are awareof them. Other settings and coding, which might be required for the CT-e functionality (like for example

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condition types for application M) are not part of the present document. Check the note 1677119 andother related notes for details about the CT-e legal change and the CT-e solution from SAP.

The legal change for PIS and COFINS rates with 4 decimal places is treated similarly as the CT-elegal change. Such content, like condition types and the corresponding entries in the tax calculationprocedures for MM and SD, are included in the BC sets mentioned in the present documentation. Insuch cases, the entries related to PIS and COFINS rates with 4 decimal places are mentioned explicit-ly. Other settings and coding are not part of the present document. Check the note 1675010 for detailsabout the legal change and the solution delivered by SAP.

2.3 How to use this documentThis document is aimed to be a configuration guide for the condition-based taxes required in Brazil.

It should guide you through the required customizing activities and can be seen as a comprehensivecheck list for CBT settings.

Of course the business processes of your company determine which settings you need to implement.To facilitate the implementation, the present documentation contains different sections for differenttypes of taxes, so that you can implement only the settings which are required in your company. Forexample if your company does not buy or sell services, you can skip the part regarding ISS taxes.

The chapter 4 containing the CBT customizing is therefore divided into different sections:

x Section 4.1: settings which are common to the different SD and MM areas and to several tax-es; you always need to perform these customizing activities.

x Section 4.2: settings required for ICMS/IPI/PIS/COFINS.x Section 4.3: ISS customizing.x Section 4.3.20: customizing settings for withholding taxes.

The required customizing settings are listed in the sequence they should be performed.

Additionally, having different sections for different tax types allows you to split the work among differ-ent persons, for example the MM expert and the SD expert.

Use this document together with the BC sets delivered in the note 1706309, since some of the cus-tomizing activities refer to BC sets and the latter can be used to enter or complete the customizingsettings in a faster way.

The chapter 5 provides additional material and references.

x Section 5.1 shows the access sequences, the conditions types and the tax calculation proce-dures for both applications SD and MM as they are contained in the SAP standard delivery. Italso gives a more detailed explanation about the tax calculation procedure TAXBRA and thepricing procedure RVABRA.

x Section 5.3 highlights what you need to do if you switch on the condition-based tax calculationwhile you are already working with Brazilian taxes using the classic tax calculation.

There is a variety of customizing settings, which are necessary so that Brazilian taxes can be calculat-ed and displayed correctly in the Nota Fiscal. Most of these settings can be done in the Tax ManagersWorkplace (transaction J1BTAX). Such preliminary settings are not described in detail in this docu-ment, since they are not strictly required for the condition-based tax calculation. However, they arementioned as additional steps since you need to perform these activities before creating posting doc-uments in your Brazilian company.

Selecting the Tax Managers Workplace via IMG menu, you will have access to the IMG documenta-tion of the Tax Managers Workplace which explains all customizing activities to be performed there indetail. You do this in the IMG: IMG Financial Accounting (New) Financial Accounting Global Set-tings (New) Tax on Sales/Purchases Calculation Settings for Tax Calculation in Brazil Ac-cess Tax Manager's Workplace. Instead of entering the Customizing activity, click on the documenta-tion icon in order to access the Tax Managers Workplace documentation. In the newest support pack-ages the Tax Managers Workplace documentation can be accessed also from the Tax ManagersWorkplace itself (transaction J1BTAX). This change is delivered by support package; the valid supportpackage for each release can be seen in the note 1706309.

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3 Introduction on condition-based tax calculationIn Brazil, there are several taxes on sales and purchases of which the most common are:

x Industrial product tax (IPI - Imposto sobre Produtos Industrializados); this is a federal tax.x State value-added tax (ICMS - Imposto sobre Operaes relativas Circulao de Mercado-

rias e Prestao de Servios de Transporte Interestadual e Intermunicipal e de Comuni-cao).

x Special forms of ICMS:o ICMS complement;o ICMS on freight (CT-e, which means Conhecimento de Transporte Eletrnico);o ICMS tax substitution (SubTrib) and SubTrib on freight CT-e.

x Municipal tax on services (ISS - Imposto sobre servios).x Social contributions due to special programs on federal level:

o PIS - social integration program (Programa de Integrao Social);o COFINS social security financing contribution (Contribuio para o Financiamento

da Seguridade Social).

x Withholding taxes, like for example:o ISSF withholding service tax (Imposto Sobre Servicos na Fonte);o IRRF withholding income tax (Imposto de Renda Retida na Fonte);o CSLL withholding social security tax (Contribuio Social sobre o Lucro Lquido).

When a company buys or sells products/services, the SAP ERP system must calculate more than onetax base amount and tax amount.

3.1 Classic tax calculationDue to the complexity of tax calculation in Brazil, the standard tax functionality based on tax ratescustomized in the transaction FTXP was never used.

Instead, the classic way of calculating Brazilian taxes made use of the external tax interface. The taxcalculation was executed by a dedicated function module rather than by direct processing of the taxcalculation procedure assigned to the country.

The tax code served to indicate which taxes are due, activating specific lines in the calculation proce-dure by setting the respective rate to 100%. Lines (taxes) which shall not be taken into account for therespective tax code must be deactivated (not only set to be 0%).

3.2 Condition-based tax calculationThe new approach of the Brazilian tax calculation makes use of the standard condition technique tocalculate taxes. The rates are stored as condition records and determined during the pricing proce-dure. The whole calculation logic is contained in the calculation procedure itself.

The tax rates, tax laws, and special indicators considering the appearance of the tax line item in theNota Fiscal are maintained in Brazilian-specific views J_1BTX* (for example J_1BTXIP1 contains theIPI rates). The data is additionally present as condition records in the database. These records aredirectly read by the pricing logic.

The generation of the condition records takes place during the view maintenance of the J_1BTX* ta-bles. Condition records are automatically written, updated, or deleted when data is maintained in theviews and saved to the database.

The whole Nota Fiscal logic is a matter of customizing and no longer to a great extent hard-coded.

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4 How to set up the condition-based tax calculation

4.1 First steps

Prerequisites and release notes4.1.1The present documentation is aimed to replace the attachments to the notes 664855, 747607 and916003. Therefore, you do not implement the customizing activities as described in the attachments ofthose 3 notes, but use the present document instead.

However, the notes 664855 and 916003 do contain coding changes which are precondition for theCBT customizing and therefore, you must check that all coding and DDIC changes are already imple-mented in your system before starting with the customizing activities.

Note 664855 - Brazil: New Condition-Based Tax Calculation

If you are using the release 4.7, the required coding changes are contained in the support packageSAPKH47017. If your system is on a lower support package of the release 4.7, you need to implementthe coding changes manually. To do this, you need to follow the steps described under point 1CodingChanges Release 4.7 of the note 664855.

If you are using release 4.7 with SP equal to or higher than SAPKH47017, or if you are using an evenhigher release, all required coding changes are already available in your system.

Note 916003 - Brazil: Withholding tax accumulation for CBT

Finally, you need to implement the correction instructions of the note 916003. The DDIC and codechanges can be applied by installing the required support package which is:

Release SP

470 SAPKH47026

500 SAPKH50022

600 SAPKH60017

602 SAPKH60207

603 SAPKH60306

604 SAPKH60405

Then you need to perform some manual activities which are described in the note text. These refer totwo new condition value formulas, which are needed for calculating withholding taxes with and withoutaccumulation. Such manual activities are described in the present document. Finally, you need somecustomizing activities: These are described in the present document. Therefore, ignore the attachmentto the note 916003.

BC Sets for CBT4.1.2In order to facilitate the implementation of standard customizing for condition-based tax calculation,SAP delivers some BC sets.

These BC sets contain table entries descriptions in English (EN) and in Portuguese (PT).

Using the transaction SCPR3, you have access to the content of the BC sets and compare the BC setentries with the customizing entries available in your system.

Since the BC sets contains entries in EN and PT, you must restrict the comparison and the activationof the BC sets to these two languages. In case you want to perform a comparison of the Customizingactivities, it is recommended to only check texts in these two languages. In case you activate a BC set,this setting will prevent that entries in other languages are overwritten by empty text fields.

To do this, go to the menu Utilities and select User Settings. Then choose General Settings andactivate the check box Use User Languages. After that, choose EN and PT and confirm (Enter). This

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selection can be done in both the transactions SCPR3 (NC Sets Display) and SCPR20 (BC SetsActivation).

Decide whether the respective BC set should be activated in your system or whether you want to fillthe entries manually in the customizing tables.

NOTE: It is highly recommended that you check any BC set before activating it since it could overwritealready existing settings in your system.

The table below lists the BC sets for the CBT configuration, which you find attached to the note1706309. For each BC set, the corresponding customizing activity, as well as a link to the correspond-ing section of the present document, is indicated.

Note that the BC sets delivered through the note 1706309 start with Z*. This is necessary, so that youdo not encounter any issue when uploading the BC sets to your SAP ERP system. The same BC setswith SAP names starting with CSC* will be delivered in the support package 6 for the release 606.

The standard delivery customizing, which is provided by SAP for the client 000, is only updated in thelatest release. Therefore, if you are using an older release, the standard customizing in your client 000may not contain the last updates.

Customizing Activity Doc. Section BC Set NameCondition Types - MM/FI 4.2.5.1 ZCSC_BR_CBT_CONDITION_TYPES_MM

Condition Types SD 4.2.5.2 ZCSC_BR_CBT_CONDITION_TYPES_SD

Account Keys for MM/FI 4.2.6.1 ZCSC_BR_CBT_ACCOUNT_KEYS_FI

Account Keys for SD 4.2.6.24.2.6.2 ZCSC_BR_CBT_ACCOUNT_KEYS_SD

Define Internal Codes for Tax Conditions 4.2.7 ZCSC_BR_CBT_INTERNAL_COND_CODES

Assign Condition Types to internal Codes forTax Conditions

4.2.8 ZCSC_BR_CBT_INT_CODS_TO_CND_TYPS

Assign Condition Tables to Tax Rate Tables 4.2.11 ZCSC_BR_CBT_CND_TBS_TAX_RT_TBS

Calculation Procedure TAXBRA (MM) 4.2.12.1 ZCSC_BR_CBT_TAXBRA_CALC_PROCD_MM

Pricing Procedure RVABRA (SD) 4.2.12.2 ZCSC_BR_CBT_RVABRA_CALC_PROCD_SD

Tax types 4.2.13 ZCSC_BR_CBT_TAX_TYPES

NF-relevant SD-Conditions for RVABRA 4.2.14.3 ZCSC_BR_CBT_NF_SD_CND_FOR_RVABRA

Map MM Values to Nota Fiscal Fields 4.2.15.1 ZCSC_BR_CBT_MAP_MM_VLS_TO_NF_FDS

Map MM Laws to Nota Fiscal Fields 4.2.15.2 ZCSC_BR_CBT_MAP_MM_LWS_TO_NF_FDS

Map SD Values to Nota Fiscal Fields 4.2.16.2 ZCSC_BR_CBT_MAP_SD_VLS_TO_NF_FDS

Table 1: BC sets for condition-based tax calculation

Maintain Settings for external tax calculation4.1.3The settings described below for external tax calculation as well as the settings for the tax jurisdictioncodes are required for different purposes:

x For the ICMS tax determination, the system must be able to determine the state of origin andstate of destination for the goods. This information is derived from the tax jurisdiction code andmust also be printed in the Nota Fiscal;

x For the ISS tax determination, the system must determine the municipality of the service pro-vider and of the service recipient.

4.1.3.1 Structure for Tax Jurisdiction Code (View V_TTXD)SAP Access

Access Menu SAP Customizing Implementation Guide Financial Accounting Financial Accounting Global Settings Tax on Sales/Purchases Basic Settings Specify Structure for Tax Jurisdiction Code

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Transaction Code SPRO

In this Customizing activity, you determine the structure of the tax jurisdiction code. This code is usedfor calculating taxes which are defined below the federal level. In Brazil these are for example ICMS,which is a state tax, and ISS, which is a city tax. This way, the tax rate is defined per level and the taxvalue is calculated individually per level.

Create a new entry for the calculation procedure TAXBRA with the following settings:

Scheme TAXBRA

Length 1 3

Length 2 7

Length 3 Leave it empty

Length 4 Leave it empty

Taxes line by line X

The correct size is 3 and 7 because the SPED FISCAL will capture 10 digits with the following struc-ture:SP 3550308 - So Paulox SP " = Region / State (Attention: it is SP and space)x 35 = SP State code according to IBGEx 50308 = So Paulo City (Municpio de So Paulo).

4.1.3.2 Activate External Tax CalculationSAP Access

Access Menu SAP Customizing Implementation Guide Financial Accounting Financial Accounting Global Settings Tax on Sales/Purchases Basic Settings External Tax Calculation Activate External TaxCalculation


For Brazil, you need to create the following entry:

Scheme TAXBRA

External system C

All other fields Leave it empty

4.1.3.3 Define Logical DestinationSAP Access

Access Menu SAP Customizing Implementation Guide Financial Accounting FinancialAccounting Global Settings Tax on Sales/Purchases Basic Settings External Tax Calculation Define logical destination


For Brazil, you need to create the following entries for the external system C:

Event Function module RFC destination

JUR J_1BTAXJUR_DETERMINE_NEW Leave it empty

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TAX J_1BCALCULATE_TAXES Leave it empty

Tax Jurisdiction Codes4.1.4

4.1.4.1 Define Tax Jurisdiction CodesSAP Access

Access Menu SAP Customizing Implementation Guide Financial Accounting FinancialAccounting Global Settings Tax on Sales/Purchases Basic Settings Brazil Define Tax Jurisdiction Codes


For new ISS calculation, two-level jurisdiction codes are to be maintained.

The proposal is to use 10 digits tax jurisdiction code because the SPED FISCAL will capture 10 digitswith the following structure:SP 3550308 - So Paulox SP " = Region / State (Attention: it is SP and space)x 35 = SP State code according to IBGEx 50308 = So Paulo City (Municpio de So Paulo).

Enter all required tax jurisdiction codes in this table according to the rule explained above.

4.1.4.2 Assign Jurisdiction Codes to Ranges of Postal CodesSAP Access

Access Menu SAP Customizing Implementation Guide Financial Accounting FinancialAccounting Global Settings Tax on Sales/Purchases Basic Settings Brazil Assign Postal Codes to Tax Jurisdiction Codes


Each geographical region can include a number of tax jurisdictions, which, in turn, are defined by itspostal codes. In this Customizing activity, you assign a range of postal codes to each tax jurisdictioncode. For each tax jurisdiction codes, assign the geographical region and the beginning and ending postalcodes.

When you maintain Brazilian address data (in master records or transaction data) and enter the postal codeand geographical region, the system automatically assigns the correct tax jurisdiction code as follows:

x It first accesses the data in this activity to determine the tax jurisdiction code.x If it does not find an entry there, it reads the tax region from the Define Brazilian Tax Regions

and Assign to Geographical Regions Customizing activity.

Once the system determines either the tax jurisdiction code or the tax region, it stores it in the JurisdictionCode field of the address.

Assign the formerly created tax jurisdiction codes to the ranges on postal codes.

4.1.4.3 Update organizational units with tax jurisdiction codeIn order to allow correct tax calculation, all relevant addresses must be updated with the jurisdictioncodes. This is necessary for:

x Company Codesx Plantsx Business Places (Filial)x General addresses of central address management which are used as delivery addresses.

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4.2 CBT customizing settings for ICMS, IPI, PIS and COFINSThe following sections describe the customizing settings which are required to calculate several typesof taxes using the condition based tax calculation logic. These taxes are:

x ICMSx IPIx PISx COFINS

The settings required for calculating ISS, which is the municipal service tax, will be described in a sep-arate section (4.3).

The document contains also a separate section (4.4) for the withholding tax customizing.

Activate condition generation4.2.1

SAP Access

Access Menu SAP Customizing Implementation Guide Financial Accounting Financial Accounting Global Settings Tax on Sales/Purchases Basic Settings Brazil Condition-Based Tax Calculation Acti-vate Condition Generation


In order to use the condition-based tax calculation, the generation of condition records in the mainte-nance of tax rates has to be activated by setting a flag for the respective country.

If the flag is set for Brazil, condition records are being generated in the background during the mainte-nance of the Brazilian tax tables.

Specify Calculation Procedures for Condition-Based Tax Calculation4.2.2

SAP Access

Access Menu SAP Customizing Implementation Guide -> Financial Accounting Financial Accounting Global Settings Tax on Sales/Purchases Basic Settings Brazil Condition-Based Tax Calculation Specify Calc. Procedures for Condition-Based Tax Calculation


The system needs to identify whether the tax calculation in the currently processed calculation proce-dure is condition-based or not. The standard condition-based tax calculation procedures for Brazil areTAXBRA for MM and RVABRA for SD.

Go to the respective Customizing activity and create two new entries:

x For MM, create an entry for usage A, application TX, calculation procedure TAXBRA and setthe CBT Act. Indicator.

x For SD, create an entry for usage A, application V, calculation procedure RVABRA and set theCBT Act. Indicator.

Assign country to calculation procedure4.2.3

SAP Access

Access Menu SAP Customizing Implementation Guide -> Financial Accounting Financial Accounting Global Settings Tax on Sales/Purchases Basic Settings Assign Country to Calculation Procedure


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In this Customizing activity, you need to assign the calculation procedure TAXBRA to the country BR.

Access sequences4.2.4Access sequences are cross-client data delivered by SAP.

In the condition-based tax calculation, adjust the access sequences whenever a new tax group is cre-ated or an existing group is changed. The section 4.2.10.1 describes how to update access sequenc-es.

4.2.4.1 Define access sequences for application TX (MM/FI)SAP Access

Access Menu SAP Customizing Implementation Guide -> Financial Accounting Financial Accounting Global Settings Tax on Sales/Purchases Basic Settings Check calculation procedure Access Sequences


Tax Managers Workplace(TMW)

Condition Setup Access Sequences MM

Here you define the access sequences within the application TX. These access sequences can beused in the tax calculation that is called by the MM applications. The corresponding view cluster isVVC_T682_TX.

Access sequences are delivered by SAP and you do not need to define them.

All SAP standard access sequences for the application TX can be found in the section 5.1.1 of thisdocument.

4.2.4.2 Define access sequences for application V (SD)SAP Access

Access Menu SAP Customizing Implementation Guide Sales and DistributionBasic Functions Pricing Pricing Control Define Access Se-quences Maintain Access Sequences



Condition Setup Access Sequences SD

At this point, you can define the access sequences within the application V. These access sequencescan be used in the SD pricing procedures. The corresponding view cluster is V_T682.

Access sequences are delivered by SAP and you do not need to define them.

All SAP standard access sequences for the application V can be found in the section 5.1.2 of this doc-ument.

Condition types4.2.5

4.2.5.1 Create condition types for application TX (MM/FI)SAP Access

Access Menu SAP Customizing Implementation Guide -> Financial Accounting Finan-cial Accounting Global Settings Tax on Sales/Purchases Basic Set-tings Check calculation procedure Define Condition Types


Tax Managers Work-place (TMW)

Condition Setup Condition Types MM

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At this point, you define the condition types within the application TX. These condition types can beused in the tax calculation that is called by the MM application. The corresponding maintenance viewis VV_T685A_V1.

Condition types for the application TX (MM/FI) can be classified in the following classes:

x Tax code conditions: they indicate that a certain tax type is due. These condition types have tobe entered also in the table J_1BAJ in order to classify them as tax type. Some examples oftax code conditions are ICOF (COFINS deductible), ICON (COFINS normal tax).

x Tax rate conditions: they contain tax data. These condition records are maintained automati-cally during the maintenance of the Brazilian tax rate tables. An internal code must be as-signed to each tax rate condition. See section 4.2.8. Tax rate conditions are for exampleBCO1 (COFINS Rate), BPI1 (PIS rate).

x NF mapping conditions: these are only used to mark specific lines of the calculation procedureto use them in the Nota Fiscal mapping tables. These are for example BX80 (BR PIS Base),BX82 (BR PIS Amount).

x NF mapping conditions with manually created condition records: these conditions are manual,that is, they have no access sequence and no condition records in the database. There areonly 2 such conditions: BXWT (BR WHT Base Amount) and BXWA (BR WHT Acc Base Amt).

x For using the withholding tax functionality with base amount accumulation, you need the con-dition type BW51 (WHT Acc. Flag).

x Conditions that refer to other conditions: These are conditions that have a reference conditioncontaining the data. They are used to reuse a condition value in another line of the calculationprocedure.

The BC Set ZCSC_BR_CBT_CONDITION_TYPES_MM contains all standard condition types forMM/FI delivered by SAP.

All standard delivered condition types for MM/FI can be found in the section 5.1.3 and following of thisdocument.

4.2.5.2 Create condition types for application V (SD)SAP Access

Access Menu SAP Customizing Implementation Guide Sales and Dis-tribution Basic Functions Pricing Pricing Control Define Condition Types Maintain Condition Types


Tax Managers Workplace (TMW) Condition Setup Condition Types SDAt this point, you define the condition types within the application V. These condition types can beused in the SD pricing procedures. The corresponding maintenance view is V_T685A.

Condition types for the application V (SD) can be classified in the following classes:

x Tax code conditions: they indicate that a certain tax type is due. These condition types have tobe entered also in the table J_1BAJ in order to classify them as tax type. Some examples oftax code conditions are: ICN3 (COFINS from SD), ICW3 (COFINS Withholding TaxSD).

x SD tax code conditions: DCOF (COFINS due), DPIS (PIS due), DWHT (WHT due).x Tax rate conditions: they contain tax data. These condition records are maintained automati-

cally during the maintenance of the Brazilian tax rate tables. An internal code must be as-signed to each tax rate condition. See section 4.2.8. Tax rate conditions are for example:BCO1 (COFINS rate), BPI1 (PIS rate).

x NF mapping conditions: these are only used to mark specific lines of the calculation procedureto use them in the Nota Fiscal mapping tables. These are for example: BX80 (BR PIS Base),BX82 (BR PIS Amount).

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x For using the withholding tax functionality with base amount accumulation, you need the con-dition type BW51 (WHT Acc. Flag).

x Conditions that refer to other conditions. These are conditions that have a reference conditioncontaining the data. They are used to reuse a condition value in another line of the calculationprocedure.

You do not need to define condition types, because they are delivered by SAP. The BC SetCSC_BR_CBT_CONDITION_TYPES_SD contains all standard condition types for SD delivered bySAP.

All standard delivered condition types for SD can be found in the section 5.1.4 and following of thisdocument.

Account keys4.2.6

4.2.6.1 Define account keys for MM/FISAP Access

Access Menu SAP Customizing Implementation Guide Financial Accounting Financial Accounting Global Settings Tax on Sales/Purchases Basic Settings Check and Change Settings for Tax Processing


You need several account keys in order to post the different tax types required in Brazil. The accountkeys are the ones which are used by the tax calculation procedure TAXBRA in order to post taxes forthe application TX.

In this activity, you make the necessary specifications for posting taxes. By doing this, you specify the fol-lowing indicators under an account key:

x Tax type: output tax, input tax, additional taxes, or "not tax-relevant" can be specified as thetax type.

x No deductibility for tax amounts: For this, tax amounts are marked as not deductible.x Posting indicator: you specify whether the tax amount is posted separately or distributed to

expense or revenue items.

x Tax not relevant to cash discount (not discount relevant): not relevant for Brazil.

SAP delivers account keys for the most important tax types, you should neither delete nor change thestandard account keys, but you may add new ones, if required.

The BC set ZCSC_BR_CBT_ACCOUNT_KEYS_FI shows a list containing the standard account keysfor Brazil.

4.2.6.2 Define account keys for SDSAP Access

Access Menu SAP Customizing Implementation Guide Sales and DistributionBasic Functions Account Assignment/Costing Revenue Ac-count Determination Define And Assign Account Keys


You define your account keys in this menu option and allocate them to the condition types in the pric-ing procedures.

With the account keys, you group together similar accounts in financial accounting. Using the accountkey, the SAP System finds the desired G/L accounts. This way, you can allocate a separate account

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key to each condition type within a pricing procedure to implement detailed revenue account determi-nation.

For example, you can allocate a freight condition to a freight revenue account, or a surcharge forpackaging costs to a corresponding account for packaging revenues.

For Brazil, you can use different account keys to post several kinds of taxes within the pricing proce-dure RVABRA.

SAP delivers account keys for the most important tax types and their assignment to the pricing proce-dure RVABRA. You should neither delete nor change the standard account keys, but you may addnew ones, if required.

The BC set ZCSC_BR_CBT_ACCOUNT_KEYS_SD shows a list containing the standard accountkeys for SD for Brazil.

Define internal codes for tax conditions4.2.7

SAP Access

Access Menu SAP Customizing Implementation Guide Financial Accounting Financial Accounting Global Settings Tax on Sales/Purchases Basic Settings Brazil Condition-Based Tax Calculation De-fine Internal Codes for Tax Conditions



Condition Setup Condition MappingInternal Codes

An internal code must exist for each condition type that is to be used in the automatic generation ofcondition records during the maintenance of the Brazilian tax tables. Only the internal codes are usedin the program coding.

The customer is usually not expected to maintain this table because SAP delivers the internal codesrequired for the standard Brazilian tax calculation.

For the internal codes representing condition types that contain data of a specific tax group (ICMS, IPI,ISS, or SubTrib), the respective tax group has to be assigned to the codes. This is necessary for thesystem to consider the access sequence of the condition type assigned to the internal code in theautomatic extension of access sequences after changing tax groups of dynamic exceptions.

The corresponding maintenance view is J_1BCONDMAPV.

The BC Set ZCSC_BR_CBT_INTERNAL_COND_CODES contains all standard internal conditioncodes delivered by SAP.

Assign condition types to internal codes for tax conditions4.2.8

SAP Access

Access Menu SAP Customizing Implementation Guide Financial Accounting FinancialAccounting Global Settings Tax on Sales/Purchases Basic Settings Brazil Condition-Based Tax Calculation Assign Condition Types to In-ternal Codes for Tax Conditions


Tax Managers Work-place (TMW)

Condition Setup Condition MappingAssign conditions to Internal Codes

The condition types that are used in the tax calculation procedure have to be assigned to the abovedescribed internal codes.

For the standard Brazilian tax calculation, SAP delivers all internal codes, condition types, and theirassignments.

The corresponding table is J_1BTXCOND.

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The BC Set ZCSC_BR_CBT_INT_CODS_TO_CND_TYPS contains all standard assignments of con-dition types to internal condition codes delivered by SAP.

Assign internal code to tax group4.2.9The assignment of internal codes to tax groups is a necessary activity but it has no correspondingCustomizing activity.

First of all, check that the table J_1BTAXGRPCD contains all required entries as listed in the tablebelow. You can do that using the transaction SE16N.

If entries are missing, enter them. Go to the transaction SE11 and select the table J_1BTAXGRPCD todisplay. From there, follow the menu path Utilities -> Table contents -> Create entries. Alternatively,you can use the transaction SE16N to edit the table.

The table J_1BTAXGRPCD in your system must contain all entries as shown below:

Tax Group Internal CodeCOFI TXSDCCOFINSICFR TXSDCICMSFREIGHTICFS TXSDCSUBTRIBFREIGHTICMS TXSDCICMSICST TXSDCSUBTRIBIPI TXSDCIPIISS TXSDCISSISSP TXSDCISSISSS TXSDCISSPIS TXSDCPISWACO WHT_ACTIVE_COFINS_ACCWACS WHT_ACTIVE_CSLL_ACCWAIR WHT_ACTIVE_IR_ACCWAPI WHT_ACTIVE_PIS_ACCWAT WHT_ACTIVE_GEN_ACCWHCO WHT_ACTIVE_COFINSWHCS WHT_ACTIVE_CSLLWHIR WHT_ACTIVE_IRWHPI WHT_ACTIVE_PISWHT WHT_ACTIVE_GEN

Tax groups for dynamic exceptions4.2.10

SAP Access

Access Menu SAP Customizing Implementation Guide Financial Accounting Financial Accounting Global Settings Tax on Sales/Purchases Calculation Settings for Tax Calculation in Brazil Tax RatesDefine Tax Groups for Dynamic Exceptions



Tax Calculation Maintain Tax Groups

In this Customizing activity, you define tax groups, which you use to define dynamic exceptions forBrazilian tax calculation. For each tax group, you can specify up to three key fields that are to be usedto determine the tax rates for the tax types you activate it for.

If you use the condition-based tax calculation for Brazil, you must adjust the access sequences thatbelong to the conditions that store the tax rates for each tax group that you create or change. You

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need to include a new step in all those access sequences that conditions use to calculate taxes for thetax types marked as active. SAP provides a program, J_1B_EXT_ACC_SEQ, which does this for youautomatically. You access this from the Tax Manager's Workplace by choosing Condition Setup ->Migration -> Tax Groups in Access Sequences (refer to the program documentation for details).

Note: The running of the J_1B_EXT_ACC_SEQ program can lead to cross-client changes in data.

You can define groups in the range from 10 to 89. The numbers between 0 and 9 as well as between90 and 99 are reserved for SAP. These groups should not be deleted. SAP delivers the groups 1, 5and 97 to 99.

The table below explains the usage of the tax groups delivered by SAP:

Tax Group Usage1 MM: ICMS base reduction carrier

SD: ICMS base reduction customerISS rates (material-dependent)

5 ICMS, IPI, S.T. material-dependent exceptionsMM: ISS exceptions (dependent on ship-from, ship-to, material)

97 SD: IPI tax laws (based on NCM code)98 IPI standard taxes (based on NCM code)

SD: IPI tax laws (based on country)ICMS standard tax rates (based on ship-from and ship-to)S.T. standard tax rates (based on ship-from, ship-to, S.T. group)

99 Default taxes (based on country)SD: IPI tax laws (based on tax code)

4.2.10.1 Migration of tax groups in access sequencesYou can use the report J_1B_EXT_ACC_SEQ to automatically update access sequences after youhave created or changed tax groups for dynamic exceptions.

You need to be authorized for cross-client Customizing if you want to modify the access sequences. Itis important that you ensure that tax groups are not customized differently in different clients becausewith each conversion to access sequences, the previous Customizing settings will be overwritten.

On the program selection screen, you enter the tax groups you want to include in the update. You cansimulate the results of the program by setting the Simulate Only indicator. This is extremely importantbecause the program makes cross-client changes to your data. If you have no authorization for cross-client customizing, this indicator is set by default and cannot be cleared.

Additionally, you need to specify what type of conversion is to take place:

Update access sequences - if you want to update existing steps in the access sequences.

Insert into the access sequences - if you want to include new steps in the access sequences aftercreating a new tax group.

Delete from access sequences - if you want to delete existing steps from the access sequences.

Following the conversion or the simulation, the system displays a log that contains all messages is-sued during processing.

The system behaves depending on the selected option

A. Update access sequences

If the system finds a step in the access sequence that has the same number of the tax group, it over-writes the step's field assignment with the values customized for the tax group.

If the system does not find a corresponding step in the access sequence, it inserts a new step.

If the system finds a step in the access sequence that corresponds to the selected tax group, but theCustomizing settings indicate that this access sequence should not have this step, then the systemdeletes the step from the access sequence.

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B. Insert into access sequences

Select this option if the tax groups you have specified have no corresponding steps and field assign-ments in the access sequences yet (this would be the case when you have created a new tax group).If the system does find a step with the number of the tax group in an access sequence, it displays oneof the following in the application logs:

Warning message: the existing field assignment is identical to the field assignment that would be gen-erated by the conversion

Error message: the actual field assignment differs, in which case the system does not change theaccess sequence

C. Delete from access sequences

Select this option if the tax groups you have specified are to be deleted from all access sequencesused in the CBT.

Assign condition tables to tax rate tables4.2.11

SAP Access

Access Menu SAP Customizing Implementation Guide Financial Accounting Financial Accounting Global Settings Tax on Sales/Purchases Basic Settings Brazil Condition-Based Tax Calculation As-sign Condition Tables to Tax Tables



Condition Setup Condition Mapping Map Tax Rate Tables toCondition Tables

When you maintain Brazilian tax tables, the system generates or changes condition records automati-cally. In this Customizing activity, you specify which condition tables are to be used for a specific taxtable. In the case of dynamic exceptions, you additionally specify the condition table per tax group.The system then knows for which condition table (which must be contained in the access sequence)condition records are to be generated.

The BC Set ZCSC_BR_CBT_CND_TBS_TAX_RT_TBS contains all standard assignments of condi-tion tables to tax rate tables delivered by SAP. The BC set contains the black entries listed in the tablebelow. These are all assignments of tax tables to condition tables, which are not dependent on a taxgroup (the tax group is empty).

The red entries in the table below are not delivered by SAP because they depend on the tax groupsthat you define. In fact, the assignment of tax tables to condition tables is done with reference to a taxgroup for: dynamic exceptions for IPI, ICMS and Sub.Trib.; always for ISS, PIS, COFINS and withhold-ing taxes.

Table Name Description Tax group Cond. TableJ_1BTAXCODEV FI Tax Codes 3J_1BTREGX Tax Regions 394J_1BTXCI1** Maintain ICMS-Complement Exceptions 349J_1BTXDEF** Maintain Default Tax Rate Values 392J_1BTXIC1** Maintain ICMS Values 382J_1BTXIC2** Maintain ICMS Material-Dependent Excep-

tions382

J_1BTXIP1** Maintain IPI Values 346J_1BTXIP2** Maintain IPI Material-Dependent Exceptions 346J_1BTXSDC SD Tax Codes 291J_1BTXIS1 Tax calc.: ISS rules for sales 121

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J_1BTXST1** Maintain SubTrib Material-Dependent Excep-tions

348

J_1BTXST2** Maintain SubTrib Values 348J_1BTXCOF** Maintain COFINS Values any * 346J_1BTXIC3** Maintain ICMS Dynamic Exceptions any * 382J_1BTXIP3** Maintain IPI Dynamic Exceptions any* 346J_1BTXIS3 Grouped ISS any* 347J_1BTXISS** Maintain ISS Values any* except country

default ( this is table392)

601

J_1BTXPIS** Maintain PIS Values any* 346J_1BTXST3** Maintain SubTrib Dynamic Exceptions any* 348J_1BTXWITH** Withholding Tax Calculation: Rates and Col-

lection Codesany* 346

* SAP does not deliver standard Customizing of dynamic tax exceptions. If you create new tax groups,you must specify a new entry for each group you use. In SAPs standard concept, the condition tableis the same for all tax groups. However, in case you need to follow a different concept of Customizingaccess sequences you can specify different condition tables per tax group. We recommend stayingwith the standard concept of one tax group per table.** You can find these entries in the overview page of the Tax Managers Workplace (transaction J1BTAX). Thereyou define tax rates for several kinds of taxes.

Tax calculation logic4.2.12The tax calculation is performed in ABAP coding. However, different to the classical Brazilian tax cal-culation, only the calculation is done there. All data retrieval and Nota Fiscal generation is based onthe Customizing of the calculation procedure and the Nota Fiscal mapping tables.

The condition value formula 320, already used in the classical Brazilian tax calculation, was extendedto work also with CBT. If the calculation procedure is specified in the table J_1BCBTAXPROC, thefunction module J_1B_CBT is called in which the new calculation logic is processed.

The formula is used to call the tax calculation as well as to retrieve the results of the tax calculation inorder to store them in the pricing-procedure results table. The differentiation is done by analyzing thecondition type of the step in the calculation procedure in which the formula was called. By assigninginternal codes to these condition types, depending on this internal code either the calculation is startedor a specific tax result is retrieved (identified by the internal code).

For example, in the MM/FI calculation procedure TAXBRA, the tax calculation is triggered in the stepthat contains the condition type BX01. This is because condition type BX01 is assigned to the internalcode CALCULATE_TAX.

The tax results are retrieved in the next section of the calculation procedure. Each line contains a con-dition type that is assigned to an internal code that indicates a tax result value. For example conditiontype BX12 is assigned to the internal code NF_ICMS_OBAS which indicates the ICMS other baseamount.

In the SD pricing, the formula must be called two times, in case there are Nota Fiscal relevant condi-tions (for example. Discounts, Freight etc.) including ICMS. The procedure is identical to the classicaltax calculation, that is. the first call is calculating tax on the net amount on condition ICMI, whereas thesecond call on condition IBRX is calculating based on the amount including ICMS, possibly modifiedby other conditions in between.

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4.2.12.1 Calculation Procedure in MM/FI: TAXBRASAP Access

Access Menu SAP Customizing Implementation Guide Financial Accounting Financial Accounting Global Settings Tax on Sales/Purchases Basic Settings Check Calculation Procedure



Condition Setup Calculation Procedures Calculation Proce-dures MM

The calculation procedure TAXBRA is used in the FI tax calculation, which is called in MM transac-tions. This calculation procedure is structured in the following sections:

x Transaction data retrieval:o The first line of the calculation procedure contains just a zero value. It is used to refer

to it in lines of the calculation procedure that only contain explanatory texts (like forexample step 011) so that no confusing intermediate sum appears in such lines on thepricing results screen in the transactions.

o In the first section of the calculation procedure, data, specific to the item that is pro-cessed in the tax calculation, is processed. These are the net value (step 010, BASB),the discount (step 012, BDIS), the freight (step 013, BFRE), and the S.T. base modifi-cation amount (step 014, BSUB). Furthermore, the calling application (PO/ IM or IV) isdetermined (step 017, BXPO).

x Customizing data retrieval: in the next section, the tax customizing data (rates, laws, and otherflags) are read from the condition database. The access is done based on the actual values in thecommunication structures KOMP and KOMK and is controlled by the access sequences assignedto the condition types (step 20 to 125).

x Tax calculation: after all data are retrieved that are necessary to calculate the taxes, the tax calcu-lation is performed (step 191).

x Results of tax calculation: the results of the tax calculation are retrieved in the next section of thecalculation procedure. For each value, a condition type is defined that serves to indicate the resultin the pricing procedure results table. For these new condition types, corresponding internal codesare defined which are used in the coding to transfer the tax results back to the calculation proce-dure (steps 200 to 386).

x Tax code conditions: the last section of the tax calculation procedure contains the tax code condi-tions, that is. the conditions that you activate (100%) or deactivate (no record) by customizing thetax codes. The condition base values are taken from the lines in the calculation procedure that con-tain the tax results described in the section before (steps 400 to 972).

The calculation procedure TAXBRA is delivered by SAP. The standard customizing, which is deliveredin client 000, is, however, only updated for the latest release.

The standard calculation procedure TAXBRA is contained in the BC setZCSC_BR_CBT_TAXBRA_CALC_PROCD_MM.

If you intend to activate the BC set to your system and you have already a tax calculation procedurenamed TAXBRA in your system, you should delete the tax calculation procedure TAXBRA before acti-vating the BC sets. In fact, if you have already the tax calculation procedure TAXBRA in your systemand you activate the BC set, it could happen that you get the same entries with different step numberswhich would cause errors in the calculation procedure.

When you activate BC set ZCSC_BR_CBT_TAXBRA_CALC_PROCD_MM you will see the followingmessage Activation ended with additional information in the information bar. The system considersthat not all data in object VVC_T683_TX was activated in all languages, because the BC set deliverstexts only for the steps which do not have a condition type behind. For all the other steps, the text thatyou can see in the description field (when you have a look at the calculation procedures in J1BTAX)comes from the assigned condition type. Ignore the information message that you get at activation,

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because after activation you will have all the texts in the description column of the calculation proce-dure.

You can also check the calculation procedure TAXBRA in the section 5.1.5 of this document.

4.2.12.2 Calculation Procedure in SD: RVABRASAP Access

Access Menu SAP Customizing Implementation Guide Sales and DistributionBasic Functions Pricing Pricing Control Define And AssignPricing Procedures



Condition Setup Calculation Procedures Calculation Proce-dures SD

The calculation procedure RVABRA is delivered as a sample SD pricing procedure. Because it con-tains normal conditions besides the tax conditions, it will most likely be necessary to adapt it to theindividual needs.

It is structured in the following sections:

x Net price determination:o The first line of the calculation procedure contains just a zero value. It is used to refer

to it in lines of the calculation procedure that only contain explanatory texts (like forexample step 199) in order that no confusing intermediate sum appears in such lineson the pricing results screen in the transactions.

o The rest covers the determination of the net price (price excluding any kind of tax), forexample taking into account discounts which should not have impact on Nota Fiscal.

IMPORTANT: when using CBT you need several prices, which are used to calculated different taxesin the correct way. It is recommendable to create condition types like the ones shown in the table be-low. In that case, you do not need the standard condition type PR00.

Step Cntr CTyp Description From To Reqt Stat Prt AltCTy AltCBV ActKy001 **** Zero **** 000 000 000 X 000 000

010 1 ZPB0 Price w/o Taxes 000 000 002 000 000

010 2 ZPB1 Price+ISS 000 000 002 000 000

010 3 ZPB2 Price+PIS+COF 000 000 002 000 000

010 4 ZPB3 Price+ISS+PIS+COF 000 000 002 000 000

010 PR00 Price 000 000 002 000 000

x Customizing data retrieval: In the next section, the tax customizing data (rates, laws, and otherflags) are read from the condition database. The access is done based on the actual values in thecommunication structures KOMP and KOMK and is controlled by the access sequences assignedto the condition types (step 200 to 199).

x Tax calculation on net amount (Step 1): After all data is retrieved that are necessary to calculatethe taxes, the tax calculation is performed by processing the condition value formula 320 (step300).

x Nota Fiscal relevant modifications to the base price including ICMS: In this part, the price includingICMS which results from the first step of the calculation amount, can be used to apply conditionsthat modify this amount, for example, Nota Fiscal relevant discounts, freight, insurance, or otherexpenses. These conditions are not really part of the tax calculation, but are specific to individualrequirements. The step range foreseen for these kinds of conditions is between 301 and 599.

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x Tax recalculation on the modified amount including ICMS (Step 2): The modification amounts thathave been applied in the previous part require a recalculation of the taxes, this time on the modifiedgross amount. This is done by the condition type IBRX (step 600).

x Results of tax calculation: The results of the tax calculation are retrieved in the next section of thecalculation procedure. For each value, a condition type is defined. This condition type serves to in-dicate the result in the pricing procedure results table. For these new condition types, correspond-ing internal codes exist which are used in the coding to transfer the tax results back to the calcula-tion procedure. This coding is processed in the call to the condition value formula 320 as well (step610 to 683).

x Tax code conditions: The last section of the tax calculation procedure contains the tax code condi-tions, that is, the conditions that you activate (100%) or deactivate (no record) by customizing thetax codes for the MM/FI calculation procedure. In the SD procedure, they are present only to pro-vide a counterpart, however they are dummy entries. The true postings are being done directly bythe tax result conditions of the previous section. The conditions ICMO and ISSO are the knownICMS and ISS offset conditions. The part between step 730 and 998 can be used for additionalconditions, for example cash discount or rounding difference conditions.

The calculation procedure RVABRA is delivered by SAP. The standard customizing, which is deliveredin client 000, is however updated only for the latest release.

The standard calculation procedure RVABRA is contained in the BC setZCSC_BR_CBT_RVABRA_CALC_PROCD_SD.

When you activate BC set ZCSC_BR_CBT_RVABRA_CALC_PROCD_SD you will see the followingmessage Activation ended with additional information in the information bar. The system considersthat not all data in object VVC_T683_TX was activated in all languages, because the BC set deliverstexts only for the steps which do not have a condition type behind. For all the other steps, the text thatyou can see in the description field (when you have a look at the calculation procedures in J1BTAX)comes from the assigned condition type. Ignore the information message that you get at activation,because after activation you will have all the texts in the description column of the calculation proce-dure.

You can also check the calculation procedure RVABRA in the section 5.1.5 of this document.

Tax Types4.2.13

SAP Access

Access Menu SAP Customizing Implementation Guide Financial Accounting Financial Accounting Global Settings Tax on Sales/Purchases Basic Settings Brazil Define Tax Types



Condition Setup Tax Types

In this Customizing activity, you define tax types for Brazil. At this point, you can define the conditiontypes that indicate whether a specific tax is due or whether specific lines are to be listed in the NotaFiscal. The FI/MM condition types are referred to as tax types.

Furthermore, you can set the LPP (Last Purchase Price) indicator for each tax type in order to activatethe recording of the LPP.

The corresponding maintenance view is J_1BAJV.

All tax types delivered by SAP are contained in the BC set ZCSC_BR_CBT_TAX_TYPES.

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Price conditions4.2.14

4.2.14.1 Price conditions MMIn Brazil, depending on your business process, you may need to include certain taxes in the net priceof materials before the system calculates the tax in the standard way. You do this by defining conditiontypes that contain net prices for each combination of tax groups.

When entering a material's net price in a purchasing info record or in a contract, a dialog box appearswith the entire basic price conditions defined in the calculation procedure. You select the appropriateone.

When you enter a purchase order item, the system uses the conditions defined in the correspondinginfo record or contract. If no condition is available, then you must specify a net price in the PO. Thesystem stores it in the manual condition PBXX, for which you can customize the taxes that are includ-ed by default. Alternatively, you can specify the price in a different condition by changing the lines onthe condition screen in the item details.

If necessary, create new price conditions and adapt the MM pricing procedure for Purchase Orders(for example RM0000) or create new ones by copying and modifying.

Price conditions are not delivered by SAP; you must create your own conditions.

4.2.14.2 Define Which Taxes Are Included in MM Price ConditionsSAP Access

Access Menu SAP Customizing Implementation Guide Financial Accounting Financial Accounting Global Settings Tax on Sales/Purchases Basic Settings Brazil Define Which Taxes Are Included in MMPrice Conditions


When the system calculates tax for a given transaction, it accesses the entries in this Customizingactivity to determine if the base value already includes a certain tax group.

Define which tax is included in which price by specifying a tax group for each of your price conditiontypes. Note that those condition types are defined as basic prices (these are assigned the conditioncategory H in the definition of the condition type). The following tax groups are supported: PIS,COFINS, ISS at location of service provider, ISS at location where service is provided, and ISS atlocation of service recipient. If more than one tax group applies to a single condition type, you mustcreate a separate entry for each combination.

No standard settings are delivered for this Customizing activity; you must define which taxes are in-cluded in the MM price conditions manually.

4.2.14.3 NF-relevant Price conditions SDSAP Access

Access Menu SAP Customizing Implementation Guide Sales and DistributionBilling Billing Documents Country-specific Features Coun-try-specific Features for Brazil Special Conditions For Pricing


Tax Managers Workplace Nota FiscalSD BillingNF-relevant SD conditionsIn order to allow the correct recalculation of the taxes on the amount including tax during the secondstep of the SD pricing, this customizing indicates how the modification conditions should be taken intoaccount, for example, if they are included or not in the IPI base, if they affect the Sub.Trib. baseamount or if they are relevant for Sub.Trib. on freight.

The standard settings delivered for pricing procedure RVABRA are in the BC setZCSC_BR_CBT_NF_SD_CND_FOR_RVABRA.

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4.2.14.4 Define Which Taxes Are Included in SD Price ConditionsSAP Access

Access Menu SAP Customizing Implementation Guide Financial Accounting Financial Accounting Global Settings Tax on Sales/Purchases Basic Settings Brazil Define Which Taxes Are Included in SDPrice Conditions


In this Customizing activity, you define which taxes are included in which prices.

Customizing Settings MM/FI4.2.15

4.2.15.1 Map MM values to Nota Fiscal fieldsSAP Access

Access Menu SAP Customizing Implementation Guide Financial Accounting Financial Accounting Global Settings Tax on Sales/Purchases Basic Settings Brazil Condition-Based Tax Calculation MapMM Tax Values to Nota Fiscal Fields



Condition SetupNota Fiscal MappingMap Values MM

By using the new condition-based tax calculation, the pricing-procedure results table contains all val-ues that must be listed in the Nota Fiscal. In this Customizing activity you determine which values ofthe table are transferred to which nota fiscal fields.

The maintenance view is J_1BNFTXCONDMMV for MM.

A tax line in the Nota Fiscal consists of the tax rate, pauta rate (used for IPI Pauta), the tax value, thenormal base, the excluded base, and the other base. An active tax type for a tax code leads to a cor-responding line in the nota fiscal. In this view, it is specified from which fields in the pricing-procedureresults table the above mentioned nota fiscal fields are being filled.

Standard Customizing settings can be found in the BC SetZCSC_BR_CBT_MAP_MM_VLS_TO_NF_FDS.

4.2.15.2 Map MM Tax Laws to Nota Fiscal fieldsSAP Access

Access Menu SAP Customizing Implementation Guide Financial Accounting Financial Accounting Global Settings Tax on Sales/Purchases Basic Settings Brazil Condition-Based Tax Calculation MapMM Tax Laws to Nota Fiscal Fields



Condition SetupNota Fiscal MappingMap Laws MM

At this point, you can define which fields of the table of the tax calculation procedure used in MM con-tain the tax law texts of the nota fiscal.

The corresponding maintenance view is J_1BNFLWCONDMMV.

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The tax laws are stored in condition records that are generated by the maintenance of the tax code orthe maintenance of certain tax rate tables (such as Maintain IPI values or Maintain ICMS Material-dependent Exceptions).

Standard Customizing settings are in the BC Set ZCSC_BR_CBT_MAP_MM_LWS_TO_NF_FDS.

4.2.15.3 Create MM tax codesSAP Access

Access Menu SAP Customizing Implementation Guide Financial Accounting Financial Accounting Global Settings Tax on Sales/Purchases Calculation Settings for Tax Calculation in Brazil Define FI/MMTax Codes



Tax CalculationTax Codes MM

The Customizing of FI/MM tax codes is done in the maintenance view J_1BTAXCODEV.

The transaction FTXP cannot be used because it is incompatible with the tax calculation procedureTAXBRA. For example in FTXP, records can be generated only for condition types that are non-statistical and that have an account key assigned in the calculation procedure. In TAXBRA, however,there are statistical lines that have tax code conditions.

In transaction J1BTAX, go to the maintenance of tax codes. Create the tax codes you need.

In the section 5.2. you find hints on how to configure tax codes for Brazil.

4.2.15.4 Assign tax accountsSAP Access

Access Menu SAP Customizing Implementation Guide Financial Accounting Financial Accounting Global Settings Tax on Sales/Purchases Posting Define Tax Accounts


At this point, you can assign the G/L tax accounts to account keys. You can use the same G/L accountfor more than one account key or use a different G/L account for each account key depending on yourbusiness needs.

No standard values are delivered for this customizing table, since G/L account numbers depend on theused chart of accounts.

Customizing Settings SD4.2.16

4.2.16.1 Tax Determination RulesSAP Access

Access Menu SAP Customizing Implementation Guide Sales and DistributionBasic Functions Taxes Define Tax Determination Rules

Transaction Code OVK1

You need to assign the Tax Category IBRX to the country BR. Check if this entry is already availablein your system or enter it as follows:

Tax country BR

Name Brazil

Sequence 1

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Tax category IBRX (Brazil tax calculation)

4.2.16.2 Map SD tax values to Nota Fiscal fieldsSAP Access

Access Menu SAP Customizing Implementation Guide Financial Accounting Financial Accounting Global Settings Tax on Sales/Purchases Basic Settings Brazil Condition-Based Tax Calculation MapSD Tax Values to Nota Fiscal Fields



Condition Setup Nota Fiscal Mapping Map Values SD

By using the new condition-based tax calculation, the pricing-procedure results table contains all val-ues that need to be listed in the nota fiscal. In this customizing activity you customize which values ofthe table are transferred to which nota fiscal fields.

The maintenance view is J_1BNFTXCONDV for SD.

A tax line in the nota fiscal consists of the tax rate, pauta rate (used for IPI Pauta), the tax value, thenormal base, the excluded base, and the other base. An active tax type for a tax code leads to a cor-responding line in the nota fiscal. In this view it is specified from which fields in the pricing-procedureresults table the above mentioned nota fiscal fields are being filled.

Standard Customizing settings are in the BC Set ZCSC_BR_CBT_MAP_SD_VLS_TO_NF_FDS.

4.2.16.3 Create SD tax codesSAP Access

Access Menu SAP Customizing Implementation Guide Financial Accounting Fi-nancial Accounting Global Settings Tax on Sales/Purchases Calcu-lation Settings for Tax Calculation in BrazilDefine SD Tax Codes



Tax CalculationTax Codes SD

The Customizing of SD tax codes is done in the maintenance view J_1BTAXCODEV. SD tax codesare defined similarly to the MM/FI tax codes.

In the section 5.2. you find hints on how to configure tax codes for Brazil.

4.2.16.4 Define Sequence for Tax Code Determination in SDSAP Access

Access Menu SAP Customizing Implementation Guide Financial Accounting Fi-nancial Accounting Global Settings Tax on Sales/Purchases Calcu-lation Settings for Tax Calculation in Brazil Define Sequence for SDTax Code Determination



Tax CalculationTax Code Determination SD

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In Sales and Distribution there are two places to define the SD Tax Code which can be automaticallydetermined in a transaction (for example a sales order). It can be either derived from the Item Catego-ry, or from the Customer/Material Information Record.

In this Customizing activity you can define the sequence in which the system accesses these sources.

You can define in the table J_1BTXCODESEQ a sequence that data sources are to be accessed.Enter sequential integer numbers and assign the data sources from the drop down menu to them.During the processing, the system will look up the data sources in ascending order of the sequencenumber until a tax code is found.

You must enter the following settings in your system:

Sequence in Tax Code Determination Source for Tax Code Determination

1 Item Category Table

2 Customer Material Information

An example is shown in the table above. In this example the system first looks up the item categorytable. If no tax code is found, the system looks up in the customer material information.

You can define the sequence that better suits your business needs, but it is mandatory that you entera sequence otherwise no tax code determination will take place.

4.2.16.5 Define Sequence for Tax Law Determination in SDSAP Access

Access Menu SAP Customizing Implementation Guide Financial Accounting Fi-nancial Accounting Global Settings Tax on Sales/Purchases BasicSettings Brazil Define Sequence for SD Tax Law Determination



Tax CalculationTax Law Determination SD

In Sales and Distribution, the system derives the tax law for ICMS and IPI automatically from one ofthese sources:x Tax exceptions (You maintain tax exceptions under Financial Accounting -> Financial Ac-

counting Global Settings - > Tax on Sales/Purchases -> Calculation -> Settings for Tax Calcu-lation in Brazil -> Tax Rates)

x Item categoryx Customer master record

In this Customizing activity, you define the sequence that the system accesses these sources.

This Customizing activity is performed to define the sequence of the determination logic of the SD taxlaws. The corresponding table is J_1BTXLAWSEQ.

You could for example enter the following settings in your system:

Sequence in Tax Law Determination Source for Tax Law Determination

1 Tax Exception Tables

2 Item Category Table

3 Customer Master

In this example, the system searches for tax laws; first it looks up the tax exception tables, then theitem category tables, and finally the customer master.

You can define the sequence that better suits your business needs, but it is mandatory that you entera sequence otherwise no tax law determination will take place.

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4.2.16.6 Assign tax accounts for revenue determinationSAP Access

Access Menu SAP Customizing Implementation Guide Sales and DistributionBasic Functions Account Assignment/Costing Revenue Ac-count Determination Assign G/L Accounts

Transaction Code SPROIn this menu option, you allocate G/L accounts for revenue account determination

No standard values are delivered for this Customizing table, because G/L account numbers depend onthe used chart of accounts.

Tax Rates4.2.17

SAP Access

Access Menu SAP Customizing Implementation Guide Financial Accounting Financial Accounting Global Settings Tax on Sales/Purchases Calculation Settings for Tax Calculation in Brazil Tax Rates



Overview Tax Rate Tables

Tax rates for the different tax types can be entered in the Tax Managers Workplace. In the TMWsoverview screen you can select for which tax type and according to which criteria you want to enter thetax rates (for example for a specific tax type or as dynamic exceptions). Example: IPI

You can define IPI tax rates based on the NCM code, the official material classification used in Brazil(Maintain IPI values). Additionally, you can define IPI tax rates specific to a material (Maintain IPI Ma-terial-Dependent Exceptions). Finally, you can define IPI tax rates depending on a tax group that youhave created before (Maintain IPI Dynamic Exceptions). In addition to these activities, you must entera default tax rate, which is used by the system if it cannot determine the tax rate in any other way(Maintain Default Tax Rate Values).

During tax calculation, the system searches for the correct tax rate in the following tables in the speci-fied order, taking the first rate it finds:

1. Material-dependent exceptions2. Dynamic exceptions3. Normal values4. Default values

Example: ICMSYou can define ICMS tax rates based on the combination of ship-from and ship-to state. For eachcombination of ship-from and ship-to location you can enter the tax rate for ICMS and the tax rate forfreight (called Conhecimento de Transporte Eletrnico). Additionally, you can also define material-dependent exceptions, dynamic exceptions and exceptions for ICMS complement. Also for ICMS, youmust define a default tax rate.

Example: PIS/COFINS

For PIS and COFINS it is not possible to enter tax rates directly, but you always enter the tax ratesbased on a group for dynamic exceptions. There are no default values for PIS and COFINS.

4.2.17.1 Create default tax rates for ICMS and IPISAP Access

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Access Menu SAP Customizing Implementation Guide Financial Accounting Financial Accounting Global Settings Tax on Sales/Purchases Calculation Settings for Tax Calculation in Brazil Tax RatesMaintain Default Tax Rate Values



Overview Tax Rate Tables Maintain Default Tax Rate Values

In this Customizing activity, you define default rates for Brazilian tax calculation. The system usesthese default rates for ICMS and IPI if it cannot determine a valid rate in the specific tax rate tables

The table below is an example which shows how such entries should look like, but you can enter othervalues:

Tax Valid From Tax Rate

ICMS 01.01.1995 12,00

IPI 01.01.1995 10,00