Solution ID: 200782233

Doc ID: 625577.1 Date Last Revised: 12/29/2004

Title: Brazilian Localization SetupAbstract: This paper will cover all the steps needed to setup Brazilian Localization.

Table of Contents

OverviewActivate LocalizationTax Code Revision (P7617B)ICMS Tax Revision (P7608B)IPI Tax Revision (P76B18)Transaction Nature (P7615B)Next Number – Nota Fiscal (P7600B)Next Number – Fiscal Books (P7602B)Brazilian P.O. Additional Information (P4310BR)Brazilian S.O. Additional Information (P4210BR)Item Master – Brazil (P4101BR)Item Branch/Plant – Brazil (P76412B)Address Book Additional Info – Brazil (P01012BR)Nota Fiscal Receipts (P4312BR)

Overview

This paper will cover all the steps needed to set up Brazilian Localization. The system must be setup to process tax information including IPI (Imposto Sobre Produtos Industrializados), ICMS (Imposto Sobre Circulação de Mercadoria e Serviços), and ICMS Substitution (Imposto Sobre Circulação de Mercadoria e Serviços) taxes. Automatic Accounting Instructions (AAIs) must be set for Sales and Purchasing for IPI, ICMS and ICMS Substitution, and other Brazilian taxes.

Set up for Brazilian taxes includes the following tasks off menu G76B31:

Setting up Tax Codes Setting up ICMS Tax Rates

Setting IPI Tax Rates

Transaction Nature

Next Number - Nota Fiscal

Next Number - Fiscal Books

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Activate Localization 

Activate Brazilian Localization by going to Users Profile (P0092) off menu GH9011, add BR in the Localization Country Code field.

 

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Tax Code Revision (P7617B)

Set up Tax Codes to define the taxes that apply to an item. The tax codes determine the ICMS and IPI taxes that apply to the item. When a Purchase or Sales Order for the item, the Tax Code defaults from the Item Branch Regional Information - Brazil (F76412) table. If the item doesn’t exist in the Item Branch it will default form the Item Master Regional Information - Brazil (F76411) table.

From menu G76B41B select Tax Code Revision (P7617B), click on Add and populate the fields Tax Code and Description also define the Tax Incidence.

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ICMS Tax Revision (P7608B)  

ICMS (Imposto Sobre Circulação e Mercadoria) is a State Tax that the government charges on purchasing and sales transactions in Brazil. The tax rate varies from state to state, and some products may be taxed at different rates. The price of the product always includes ICMS tax, but the amount of this tax also appears on the Nota Fiscal. Current ICMS must be setup and maintained for all of the states where business is done. The system will calculate the ICMS tax rates for purchasing and sales transactions based on the rates you set up on the ICMS tax rate table. Specific ICMS Tax Rate can also be

defined by item or mark up level, which is a code that is used in conjunction with Address Book Category Code 30 (AC30). The system will look first at the most specific one, which is the mark up level, and then if it doesn’t find anything it will look for an item number, if it doesn’t find it will use the generic state-to-state tax. The mark up level cannot be left blank, if it not used, populate it with an '*'.

From menu G76B41B select ICMS Tax Revision (P7608B) and click on Add:

To define the rates, click on ICMS Tax Revisions (P7608B) on the row exit. Populate all the necessary fields according to business needs. NOTE: Tax Rates must be expressed as a percentage and not as the decimal equivalent. For example, 17% is typed as 17.

ICMS Reduction – A factor that the system uses to reduce the amount of the taxable base of a product.

Substitution Mark-up – A theoretical mark-up factor, defined by the state, that is used to calculate the maximum price a retail seller can charge customers for a certain product.

Substitution Reduction – A factor that reduces the ICMS substitution Tax Amount.

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IPI Tax Revision (P76B18)

IPI (Imposto Sobre Produtos Industrializados) is a federal tax that the government charges at various rates on manufactured products. The tax is payable at the point of production or importation. To calculate the IPI tax that is paid to the customers and suppliers, setup Tax Rates and Reductions. IPI Tax Rates can be setup either by Fiscal Classifications or by a default tax that will apply to all customers and suppliers.

From menu G76B41B select IPI Tax Revision (P76B18), click on Add and populate the necessary fields according to business needs.

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Transaction Nature (P7615B)

The Transaction Nature code (Natureza da Operação) is a legal code established by the Brazilian government. In Brazil, the government requires companies to assign each business transaction a Transaction Nature code for tax purposes. Tax identification is the primary purpose of the code. Originally, the Transaction Nature code was a three-character code with a two-character suffix. After January 01, 2002 the legislation changed and the Transaction Nature changed from 3 to 5 digits, however in Update 4, the 5 digits can only be viewed in the Fiscal Books and not at the time the sales or purchasing Nota Fiscal is entered. The 5 digits must be specified by each client according to their business needs, the Transaction Nature Cross Reference (P76B2001) table must be manually setup. When running the Nota Fiscal Conversion (R76B200A), the Transaction Nature will be converted from three to five digits according to the Transaction Nature Cross Reference table defined by client. The calculation for the Transaction Nature is hard coded and it’s done by the system as it follows:

1st digit:

 * If it is NF inbound/purchase, it will be:

 1 - Transaction inside the state 2  - Transaction interstate 3 - Foreign transaction

* If it is NF outbound/sales it will be: 

 5 - Transaction inside the state 6 - Transaction Inter state 7 - Foreign transaction

2nd digit: 

NOTE: This digit is calculated by the system, not setup anywhere; it will depend on the type of transaction that is being done.

 1 - Sales or Purchase 2 - Transfer item 3 - Return 7 - Sales/Purchase with tax substitute 9 - Other... (Note: This number will never allow the system to calculate ICMS and IPI recoverability or ICMS substitution and reduction)

3rd digit: 

NOTE: Address Book Category Code 6 will define if the item was manufactured by the company or purchased from another company.

1 - Product manufactured by the company2 - Product purchased that belongs to a branch plant3 - Product purchased from another supplier/company

From menu G76B41B select Transaction Nature (P7615B), and click Add, populate the necessary fields according to business needs.

 

The Transaction Suffix is a two-character field that works in conjunction with the Transaction Nature code to identify the complimentary implications of a type of a transaction. For example, the suffix might indicate that a certain type of transaction is an inventory change, or a transaction is eligible for a certain type of tax. Transaction Nature suffixes are set up using the Transaction Nature (P7615B) program. 

Valid values are:

01 Bonus

02 Demo

03 Sample

04Return Merchandise

04 Back order

06 Donation

Examples of Transaction Nature codes with suffixes:

511 02Sales-in state, Demo

711 01Sales-import, Bonus

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Next Number – Nota Fiscal (P7600B)

This is where the next number that the system will automatically assign to each Nota Fiscal  is setup. A next number must be setup for all of the Document Types that will be used and the same is set up based on the Fiscal Company.

 

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Next Number – Fiscal Books (P7602B)

This is where the next number is setup that the system will automatically assign when running the Fiscal Book programs. The Opening and Closing Statements for the report type used can also be setup here. A number must be setup for all of the report types used by a company.

 The Print Date field (below) will be populated with the last date that the program was run. 

All the other programs in the menu are user defined and must be setup to fit the business needs. Menu G76B31 will have all the information that was set up and used to default to the Sales and Purchase Orders.

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Brazilian P.O. Additional Information (P4310BR)

This program will display the regional information for the Purchase Order that was calculated based on the item and customer set up the values used are from the set up from the previous menu. Information cannot be added here, just review.

To view the information from menu G76B31, highlight the line and click Select.

Taking the row exit to PO Header will show the Transaction Nature and Suffix.

Taking the row exit to PO Detail Revisions will show all of the other information that defaulted for that particular transaction from the Item Branch/Additional Information and the Address Book/Additional Information.

Processing Options for Brazilian P.O. Additional Information (P4310BR)

Use these processing options to specify which value Brazilian P.O. Additional Information (P4310BR) will apply to the transaction if nothing is entered. Enter a value for the Transaction Nature  and Transaction Suffix that will be used in all of the Purchase Orders entered, if not entered manually.

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Brazilian S.O. Additional Information (P4210BR)

This program works exactly like Brazilian P.O. Additional Information (P4310BR) but it has all the information from the sales transactions (see above).

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Item Master – Brazil (P4101BR)

This program will only display (not add) the tag file information for a particular item. In Brazil it is mandatory that companies maintain additional information for each item. When additional information is entered for an item, the system creates a record for the item in the Item Master Regional Information – Brazil (F76411) table.

From menu G76B31, select Item Master – Brazil, choose an item to view the record.

To add the additional information, go to the Item Master (P4101) off menu G4111 inquire on the item then take the Regional Information row exit, the system automatically displays the form where a new inventory item record is entered.

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Item Branch/Plant – Brazil (P76412B)

Use this program to access the additional information for the item, like the Item Master, the information can only be viewed not added. To make any changes, go to the Item Branch (P4102) off menu G4111 and take the Regional Information row exit. In Brazil, companies can choose to override the Item Master information entered for specific Lot/Locations, when entering a Purchase or Sales Order the system will search for the item information first in the Item Branch/Plant and if it doesn’t find it there it will search in the Item Master. When Additional Branch/Plant Information is entered for an item, the system creates a record for the item in the Item Branch Regional Information – Brazil (F76412) table. 

From menu G76B31, select Item Branch/Plant – Brazil, choose an item to view the record.

To add the additional information, go to the Item Branch/Plant (P4102) off menu G4111, choose a Branch/Plant, take the Location Revisions row exit, highlight the location desired then take the Regional Information row exit.

 

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Address Book Additional Info – Brazil (P01012BR)

In this program, only set up the processing options to determine if the system will allow values to be duplicated when entering new Address Book information.

Regional Information can be added or changed for a client by going to menu G01, select Address Book (P01012), choose a client and take the row exit to Regional Information.

 

 

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Nota Fiscal Receipts (P4312BR)

Here is where the defaults to create an Inbound Nota Fiscal can be setup. What is set up in the Processing Options will default to the Nota Fiscal.

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