(BRA) Processing Supplier Withholding

This chapter provides an overview of processing Brazilian withholding taxes and discusses how to:

• Update the general ledger with PIS/PASEP and COFINS tax credits.

• Work with service taxes paid externally.

• Calculate ISS, INSS, FUNRURAL, and IRPJ taxes.

• Calculate IR, PIS/PASEP, COFINS, and CSLL taxes.

• Print the INSS withholding certificate.

• Maintain ISS and INSS tax records.

• Generate a summary report for CSLL, COFINS, and PIS/PASEP contributions.

• Generate the text file for taxes.

• Print withholding tax reports.

Understanding Withholding Taxes for Brazil

Businesses in Brazil must calculate withholding taxes for the service notas fiscais that they receive. These taxes are calculated on an aggregate basis for corporate entities and on a retention basis for individuals. When calculated on an aggregate basis, the tax is added to the basis of the total amount on the nota fiscal or voucher. The tax is remitted to the government, not to the supplier. When calculated on a retention basis, the tax is an amount that is withheld from the nota fiscal or voucher. In this situation, a portion of the amount that is due to the supplier (the tax) is remitted to the government instead of to the supplier. You must calculate withholding taxes before you process vouchers, and then you must post the vouchers after you calculate the taxes.

After the system calculates the taxes, you can generate reports and magnetic media to meet legal requirements. You generate a weekly collection report and an annual report that informs the federal Department of Revenue of the individuals and legal entities for which you calculated taxes.

The system calculates these withholding taxes:

Note. Where a difference exists between how IR taxes for individuals and legal entities are processed, this document refers to IR taxes for individuals as IRPF and refers to IR taxes for legal entities as IRPJ. Where no difference exists between how the system processes IR taxes for individuals and legal entities, this document uses the acronym IR.

The applications that you use to calculate Brazilian withholding taxes read data from these tables:

• Accounts Payable Ledger (F0411).

• Address Book Brazilian Tag File (F76011).

• Nota Fiscal Header - Brazil (F7601B).

• Nota Fiscal Detail - Brazil (F7611B).

• Item Master Regional Information - Brazil (F76411).

• Item Branch Regional Information - Brazil (F76412).

• Purchase Order Detail Tag File - Brazil (F76432).

• Tax Code (F76B0401).

• IR Progressive (F76B0402).

• Voucher Additional Information Brazil (F76B0411).

• Services Taxes Paid Externally (F76B0403).

Results of the tax calculations are stored in these tables:

• Accounts Payable Ledger (F0411).

• Account Ledger (F0911).

• Voucher Additional Information Brazil (F76B0411).

• Voucher Tax Processed (F76B4012).

• Tax Accumulates by AN8 (F76B4016).

• Tax Accumulates by AN8, Company (F76B4017).

Updating the General Ledger with PIS/COFINS Tax Credits

This section provides an overview of the Taxes Netting Process program (R76B9011) and discusses how to:

• Run the Taxes Netting Process program.

• Set data selection for Taxes Netting Process.

• Set processing options for Taxes Netting Process (R76B9011).

Understanding the Taxes Netting Process Program

You run the Taxes Netting Process program to update general ledger accounts with PIS/PASEP and COFINS tax amounts after you process vouchers or update sales, and before you run the Nota Fiscal Conversion program (R76B200A).

You can run the Taxes Netting Process program in either proof or final mode. When you run the program in proof mode, you can review the report that the system produces to determine whether any errors exist. The report includes:

• Date range for the processed records.

• Whether the report is for the proof or final run of the program.

• If you set the processing options to print in detail, information about the nota fiscal for each record, including the number, series, document ID, and tax type.

  Additionally, the report shows whether each transaction generated a debit or credit journal entry, and the amount of the entry.

• Errors that occurred during processing.

• The batch number and batch type (if you set the processing option to run the program in final mode and no errors occurred during processing).

After you correct any errors, you can run the report in final mode to create the journal entries and the batch.

Process Flow for Final Mode

When you run the Taxes Netting Process program in final mode, the system uses this logic to write records to the F0911 table for each selected, unprocessed record in the F76B011 table:

• Accesses the G/L Class Code Cross Reference user-defined code (UDC) (76/GL) to determine the GL class code that is assigned to the branch/plant for PIS/PASEP and COFINS taxes.

  If no GL class code cross-reference exists for the branch/plant, the system uses the default GL class code. The system uses the GL class code to determine the automatic accounting instruction (AAI) to use, and uses the AAI to determine the account to credit or debit.

• If the value in the Transaction Nature Code field (data item CFOP) in the F7611B table is greater than 500, the system uses AAI 4220 to generate a debit to the posting account and uses AAI 4240 to generate a credit to the posting account.

  Transaction Nature codes that are greater than 500 are assigned to sales transactions. The system creates a summarized journal entry record by each tax type, GL date, and GL class code combination.

• If the value in the Transaction Nature Code field in the F7611B table is less than 500, the system uses AAI 4385 to generate a debit to the posting account and uses AAI 4390 to generate a credit to the posting account.

  Transaction Nature codes that are less than 500 are assigned to procurement transactions. The system creates a summarized journal entry record by each tax type, GL date, and GL class code combination.

• Creates a single batch header and generates all records in the single batch header.

  The system prints information about the batch on the report.

• Marks the records in the F76B011 table for which journal entries are written as processed.

Note. The system writes entries to the F0911 table only when no errors exist for the record in the F76B011 table. If an error exists, the system prints an error message on the report instead of writing entries to the F0911 table.

Reconciling the General Ledger for PIS/PASEP and COFINS Taxes

After you update the general ledger by running the Taxes Netting Process program, you can manually reconcile your accounts to determine whether you must send funds to the government for the amounts that you collected for PIS/PASEP and COFINS taxes, or whether you have a credit amount that you can apply to the amounts that are due the following month.

For example, if you paid more in PIS/PASEP and COFINS taxes through your procurement transactions than the amount of PIS/PASEP and COFINS taxes that you collected through your sales transactions, you have a credit amount that you can apply towards PIS/PASEP taxes for the following month.

For example, if the PIS/COFINS on purchases is 1000 BRL and the PIS/COFINS on sales is 800 BRL, the credit for the following month is 200 BRL.

If you collected more through your sales transactions than you paid through your procurement transactions, you must remit to the government the difference between the amounts collected and paid, minus any credit from the previous month.

For example, if the PIS/COFINS on sales is 1300 BRL, the PIS/COFINS on purchases is 800 BRL, and the credit from the previous month is 200 BRL, then 300 BRL is due to the government.

The system does not store information about the total amounts paid on procurement transactions and the total amounts that were collected through sales transactions. It also does not store information about credits from previous months. You must manually reconcile your accounts to determine the difference between the amounts paid and collected each month. If you must generate a payment to the government for PIS/COFINS taxes, you must manually process the payment.

When you run the Generate ICMS Magnetic Files - Sintegra program (R76B201), you create a flat file that contains tax information. The system creates record type 54 records in the flat file for PIS and COFINS taxes that lists the amounts of PIS/COFINS taxes from the notas fiscais that were processed.

Running the Taxes Netting Process Program

Use one of these navigations:

Select Sale Order Processing – Brazil (G76B4211), Taxes Netting Process

Select Purchase Order Processing – Brazil (G76B4311), Taxes Netting Process

Setting Data Selection for the Taxes Netting Process

Along with processing options, you set data selection to specify the records to process. To process all of the unprocessed records, set your data selection so that the Processed Flag - Brazil field is not equal to 1.

Setting Processing Options for Taxes Netting Process (R76B9011)

Processing options enable you to specify the default processing for programs and reports.

Process

Versions

Working with Service Taxes Paid Externally for Brazil

This section provides an overview of service taxes paid externally and discusses how to:

• Enter externally paid INSS tax amounts for a supplier.

• Run the INSS Withholding at Other Companies report.

• Set processing options for INSS Withholding at Other Companies (R76B04009).

Understanding Service Taxes Paid Externally

A supplier who provides a service to you during a month might also provide services to other companies during that month. The other companies might have withheld INSS taxes for the supplier. Occasionally, a supplier might make an INSS contribution for a month through a bank or government agency. You must consider the amounts that other companies withheld and the amounts that a supplier might have contributed for INSS when you calculate the amount of INSS tax that you withhold for the supplier.

You use the Service Taxes Paid Externally program (P76B0403) to enter the information that your supplier gives to you about the INSS tax amounts that others hold for the supplier. You must enter the information about the INSS tax amounts that are held by others before you calculate the INSS taxes which you must withhold for the supplier, and before you calculate IR taxes for the supplier.

You need only enter the amounts that are held by others when your supplier is an individual or cooperative, and when the supplier was paid for services to another company in the same month in which you pay the supplier for services or the supplier made an INSS contribution in the same month in which you pay the supplier.

Printing the INSS Withholding at Other Companies Report

You can generate the INSS Withholding at Other Companies report (R76B04009) to obtain a listing of the information that your suppliers give to you about the INSS tax amounts that other companies have withheld for them. The system prints the report by supplier and provides totals for each supplier. You use data selection to specify the records to include in the report.

Form Used to Enter Externally Paid INSS Tax Amounts for a Supplier

Entering Externally Paid INSS Tax Amounts for a Supplier

Access the Enter Service Tax Amounts Paid Externally form.

INSS Registration Number	Enter the supplier's registration number for INSS.
Document Number for External Service Tax	Enter the document number that identifies a specific service tax that is stored externally for a supplier.
Service Tax Withholding Location	Specify where the service tax is stored. Values are: 00: External company 01: Bank
Service Tax Amount Basis	Enter the amount that another company paid to the supplier. The INSS service tax that other companies withheld is based on this amount.
Service Tax Amount	Enter the INSS tax that another company withheld for the supplier.
Service Tax External Company	Enter the identifier for a company or bank that is holding INSS taxes for a supplier. You can enter the company or bank name, or any other identifying name or number.
CNPJ/CPF Tax ID	Enter the tax ID of the company or bank that is holding the INSS taxes for the supplier.

Running the INSS Withholding at Other Companies Report

Select A/P Tax Processing - Brazil (G76B0414), INSS/IN89 INSS Withholding at Other Comp.

Setting Processing Options for INSS/IN89 INSS Withholding at Other Comp. (R76B04009)

Processing options enable you to specify the default processing for programs and reports.

Other Company Transactions

Calculating INSS, ISS, FUNRURAL, and IRPJ Taxes

This section provides overviews of the Tax Calculation ISS, INSS, FUNRURAL and IRPJ program, aggregation and retention for INSS taxes, and calculations for each tax, and discusses how to:

• Run the Tax Calculation ISS, INSS, FUNRURAL and IRPJ program.

• Set processing options for Tax Calculation ISS, INSS, FUNRURAL and IRPJ (R76B4310).

Understanding the Tax Calculation ISS, INSS, FUNRURAL and IRPJ Program

The Tax Calculation ISS, INSS, FUNRURAL and IRPJ program orders all vouchers in a date range by GL date and calculates the withholdings of each voucher. When you run the Tax Calculation ISS, INSS, FUNRURAL and IRPJ program, the system generates two lines in the F0411 table for each voucher processed. A positive line is created that is paid to the fiscal authority. A negative line is created that is paid with the voucher. The system requires that the negative lines be included on the first payment to the supplier.

The system generates records in the Voucher Additional Information Brazil table (F76B0411) when you calculate the taxes. During the calculation process, the system writes a record to the Voucher Tax Processed table (F76B4012) when it writes each withholding amount. The F76B4012 table includes information about IRPJ taxes, including whether the taxes were already calculated for the voucher.

You run the Tax Calculation ISS, INSS, FUNRURAL and IRPJ program before you pay vouchers. The system selects vouchers that are not paid, whether they are posted or not posted. The system disregards all withholding lines and voided vouchers lines.

If the process generates INSS tax for a supplier who is an individual, the system writes a record to the Tax Accumulates by AN8 table (F76B4016) for INSS taxes to maintain the monthly accumulated amount. The F76B4016 table accumulates the INSS taxes calculated so that the system can compare the amounts to the INSS monthly maximum for suppliers who are individuals. The system uses the amount in the F76B4016 table to determine whether the maximum tax withholding has occurred.

The Tax Calculation ISS, INSS, FUNRURAL and IRPJ program recalculates ISS and FUNRURAL taxes that were previously calculated when you process unposted vouchers.

The system selects vouchers that are not paid, whether they are posted or not posted. The system disregards all withholding lines and voided vouchers lines.

Use data selection to select vouchers to process when you calculate ISS and FUNRURAL. The system automatically processes records for all companies for which BR exists as the country code in the address book record. Because INSS updates accumulated amounts, the process does not use the data selection when you calculate this tax. Consider creating two versions: one to calculate ISS and FUNRURAL and the other to calculate INSS. Indicate the month and year of the unpaid vouchers to process by specifying the month and year in the processing options.

Important! When the system creates records in the F0911 table during the tax calculation process, it populates the Name - Remark Explanation field (data item EXR) with key identifying information. If you change the value in the Name - Remark Explanation field, you will compromise the integrity of the data and the system might produce inaccurate calculations.

Understanding Aggregation and Retention for INSS

The system calculates both aggregation and retention for INSS taxes for suppliers who are individuals or cooperatives. Before the system can correctly calculate aggregation and retention percentages for INSS taxes, you must:

• Use the Review A/P Tax Code program (P76B0401) to create tax codes for the INSS tax rates for aggregation and for retention.

  For example, you might set up code INSA for a tax rate for INSS aggregation and INSR for a tax rate for INSS retention. Your business needs might require you to set up several codes for aggregation and for retention.

• Set up purchase use codes in the Purchase Use UDC table (76/PU) to define the aggregation and retention combinations that the system uses when calculating INSS taxes.

  The system uses the values that you enter in the Description 02 field of the Purchase Use UDC table to determine the tax to apply to the supplier.

• Assign to suppliers of services the tax codes that specify the percentage of taxes aggregated or withheld.

  You assign tax codes in the Address Book Revisions program (P01012), and the system stores the values in the Address Book Brazilian Tag File table (F76011). The fields that you must complete with the tax codes are on the Tax Information tab of the Address Book Additional Information - Brazil form. If both aggregation and retention apply, you must assign a code for each to the supplier. The system uses the tax codes that you enter in the Address Book Revisions program only if you do not specify a code in the Purchase Use processing option in the Tax Calculation ISS, INSS, FUNRURAL and IRPJ program.

• Use the Brazilian P. O. Additional Information program (P4310BR) to assign a purchase use code to services on purchase orders.

  The system writes the purchase use code to the Purchase Order Detail Tag File - Brazil table (F76432). If the supplier for a service is subject to INSS aggregation and retention, assign a purchase use code that includes a value in the Description 02 field of the purchase use code. The system uses the purchase use code that you enter here only if you do not specify a code in the Purchase Use processing option in the Tax Calculation ISS, INSS, FUNRURAL and IRPJ program.

When you run the Tax Calculation ISS, INSS, FUNRURAL and IRPJ program, the system uses this hierarchy to determine the retention and aggregation amounts:

1. The system uses the value in the Purchase Use processing option if a value exists in the processing option.

   The system then accesses the tax rate in the Tax Code table (F76B0401) and calculates the amount of the aggregation or retention. If the code in the processing option specifies a purchase use code that has tax codes that have both aggregation and retention rates assigned, then the Tax Calculation ISS, INSS, FUNRURAL and IRPJ program accesses the Address Book Brazilian Tag File table (F76B0401) twice to obtain both rates. If you complete this processing option with a valid purchase use code, the system ignores the value that exists in the Retention/Aggregation field (data item BRRTA) in the F76B0401 table.

2. If you do not complete the Purchase Use processing option, the system uses the purchase use code from the F76432 table.

   If no value for a purchase use code exists in the F76432 table, the system displays an error message describing the error in the setup.

   Note. The system ignores the value in the INSS Y/N field (data item BRKINS) in the Item Master Regional Information (P4101BR) and Item Branch Regional Information (P76412B) programs when you run the Calculation ISS, INSS, FUNRURAL program.

Understanding Tax Calculations for ISS

Imposto sobre Serviços (ISS) is a tax that is defined by the city of origin of the job or service. The tax rates vary by city and type of service. Each type of service that is taxed by a city has a specific code. Tax rates are determined by the list of services and their codes. Each city can establish different tax rates per type of service.

Some cities require that the ISS tax amount be declared in the service nota fiscal by including the tax in the price, as is done for the ICMS tax. Other cities require that the tax be added to the price as a separate item, as is done for the IPI tax. Jobs or services that are subject to the ISS tax are exempt from ICMS and IPI taxes.

If a transaction is subject to ISS tax, the system:

• Calculates the amount of the withholding, based on information in the F7601B table, the processing options, or the F76B011 table.

  The ISS tax is calculated for the entire voucher and the tax amount is paid when the first line of the voucher is paid.

• If no information is in the F76B011 table about ISS tax, the system verifies the existence of a tax code in the Address Book Brazilian Tag File table (F76011) and applies the rate associated with the code.

  Note. In the rare situation in which the calculated tax exceeds the amount of the first pay item, the amount for the first item becomes a negative amount. You must manually adjust the pay item according to your procedures.

Understanding Tax Calculations for INSS

Instituto Nacional do Seguro Social (INSS) is the national social security tax. Some types of services are subject to INSS tax, and the tax amount is added to the value of the provided service.

If a transaction is subject to INSS tax for individuals, the system:

1. For standard vouchers, verifies the existence of a tax code in the F76011 table.

2. Accesses the purchase order for the nota fiscal.

3. Uses the Description 02 field in the Purchase Use (76/PU) UDC table to determine the INSS aggregation and INSS retention rates.

   You set up INSS aggregation and INSS retention rates in the Tax Code table (F76B0401).

4. Calculates the aggregation and retention amounts.

5. Accesses the F76B0403 table to determine the amount of INSS tax, if any, that was withheld for the supplier by other companies.

   The system accesses the F76B0403 table to track the monthly maximum tax amount.

6. Accesses the INSS Maximum Monthly Tax Amount (76B/TX) UDC table to determine the maximum INSS retention amount for the associated tax code in the F76B0401 table.

7. Compares the sum of the calculated INSS retention amount and the INSS tax that was withheld for the supplier by other companies to the maximum retention amount in UDC 76B/TX, and returns the greater of the calculated tax or the maximum INSS retention amount.

8. The INSS tax is calculated for the entire voucher and the tax amount is paid when the first line of the voucher is paid.

If a transaction is subject to INSS tax for corporate entities, the system:

1. For standard vouchers, verifies the existence of a tax code in the F76011 table.

2. Accesses the purchase order for the nota fiscal.

3. Calculates the amount of the withholding, based on the reduction percentage.

   The INSS tax is calculated for the entire voucher and the tax amount is paid when the first line of the voucher is paid.

Note. In the rare situation in which the calculated tax exceeds the amount of the first pay item, the amount for the first item becomes a negative amount. You must manually adjust the pay item according to your procedures.

Understanding Tax Calculations for FUNRURAL

Fundo de Assistência e Previdência do Trabalhador Rural (FUNRURAL) is the income tax for agricultural businesses. It is similar to the IR tax for corporations, but the rate at which the income is taxed is different.

If a transaction is subject to FUNRURAL tax, the system:

• Verifies the existence of a tax code in the F76011 table.

• Calculates the aggregate amount, based on the percentage of the retention.

  The FUNRURAL tax is calculated for the entire voucher and the tax amount is paid when the first line item is paid.

Understanding Tax Calculations for IR

The system calculates IRPJ and IRPF differently. Use the Tax Calculation ISS, INSS, FUNRURAL and IRPJ program (R76B4310) or the Create Payment Groups program (R04570) to perform the calculations for IRPJ. Use the Create Payment Groups program to perform the calculations for IRPF.

IR withholdings apply only to Brazilian suppliers. The system calculates IR withholding only for suppliers for which the supplier master record shows the country as BR (Brazil). When you set up tax codes for Brazilian suppliers, set up different codes for IRPJ and IRPF so that you can associate the correct type of IR tax to each supplier.

See Also

Working with Vouchers and Payments for Brazil, Understanding Automatic Payment Processing for Brazil, Tax Calculations for IRPJ

Working with Vouchers and Payments for Brazil, Understanding Automatic Payment Processing for Brazil, Tax Calculations for IRPF

Running the Tax Calculation ISS, INSS, FUNRURAL and IRPJ Program

Select A/P Tax Processing - Brazil (G76B0414), Tax Calculation ISS, INSS, FUNRURAL and IRPJ.

Setting Processing Options for Tax Calculation ISS, INSS, FUNRURAL and IRPJ (R76B4310)

Processing options enable you to specify the default processing for programs and reports. For reports, processing options enable you to specify the information that appears on reports.

General

ISS

INSS

FUNRURAL

IR

Calculating IR, PIS/PASEP, COFINS, and CSLL Contributions for Brazil

The system calculates IR, PIS/PASEP, COFINS, and CSLL contributions automatically when you run the automatic payment process. This section discusses the automatic payment process. You can also enter the contribution amounts when you process manual payments.

This section provides an overview of the tax calculations, lists a prerequisite, and discusses how to set processing options for Brazilian Payment Process - PO (P76B470).

Understanding Calculations for IR, PIS/PASEP, COFINS, and CSLL Taxes

Before you run the Create Payment Control Groups program (R04570), set the processing options in the Brazilian Payment Process - PO program (P76B470). Access the Brazilian Payment Process - PO program from the A/P Tax Processing - Brazil (G76B0414) menu. The system uses the values in these processing options to define the Brazil tax information that the system uses to calculate the withholdings for each voucher of the payment. The Create Payment and Brazilian Payment Process - PO programs must have matching versions. For example, if you use version ZJDE0010 for the Create Payment Control Groups program to create payments for Brazil, you must set the processing options for the payment process in the ZJDE0010 version of the Brazilian Payment Process - PO program.

Create Payment Control Groups Program (R04570)

The Create Payment Control Groups program (R04570) calculates IR, PIS/PASEP, COFINS, and CSLL taxes. When you run the Create Payments program, the system:

• Disregards lines for ISS, INSS and FUNRURAL withholding.

• Calculates IR, PIS/PASEP, COFINS, and CSLL withholdings for each voucher line of the payment.

  The system searches for accumulated amounts in the Tax Accumulates by AN8, Company table (F76B4017) before performing the tax calculations.

• Saves the tax calculation information to the Payment Processing - Detail (F04573) and F04573 Brazilian Temp WH File (F76B473T) tables.

  The system creates one line for each type of withholding calculated and saves it to the F04573T table.

• Updates the A/P Payment Processing - Summary table (F04572) with the payment amount, less the taxes calculated.

  For PIS/PASEP, COFINS, and CSLL withholdings, if the accumulated gross amount in a month is less than the minimum amount that is entered in the Minimum Withholding Amount processing option in the Brazilian Payment Process - PO program, the system writes the tax amount and the gross amount for the voucher line in the PIS, COFINS and CSLL Below Min. table (F76B411A) for control purposes.

IR Tax

Imposto de Renda (IR) is a federal income tax that is levied on services that are provided by individuals or legal entities. The system calculates the tax for each line when you run the Create Payment Control Groups program.

Pessoa Física is IR tax levied on individuals. For most services, the taxable income is the value of the service that is provided. Before you calculate this tax, you must:

• Enter the number of dependents for the service provider in the IR Progressive table (F76B0402).

  The application uses the number of dependents to find the corresponding amounts and deductions in a scaled table of income brackets.

• Run the Tax Calculation ISS, INSS, FUNRURAL and IRPJ program to calculate ISS, INSS, and FUNRURAL taxes.

If a voucher is subject to IR tax, the system performs these actions for individuals:

1. Checks the Voucher Tax Processed table (F76B4012) to verify that ISS, INSS, and FUNRURAL taxes were calculated.

2. For payments to suppliers, checks that the negative withholding lines for ISS, INSS, and FUNRURAL are included in the payment.

3. Checks that the supplier does not have another payment in process because the system uses accumulated amounts that might be affected by another payment.

4. Verifies the existence of a tax code in the Address Book Brazilian Tag File table (F76011).

5. Uses the INSS maximum amount for the month to determine the applicable amount.

   The system saves the INSS maximum amount to the F76B4012 table when the system calculates INSS tax for this voucher.

6. Reduces the IR tax base by the amount of the INSS tax withheld.

7. Calculates the withholding amount based on the percentage of the reduction of the basis of calculation, the number of dependents, whether the individual is retired, and the tax rate.

   The system calculates IR tax for each line on the voucher and pays the voucher line and the withholding line in the same payment.

8. Creates a line in the Voucher Additional Information Brazil table (F76B0411) for IR withholding.

9. Writes two lines to the F0411 table: one that is a positive amount and that is paid to the fiscal authority and one that is a negative amount and that is paid with the voucher.

10. Updates the Tax Accumulates by AN8, Company table (F76B4017).

The system accumulates by month, tax ID of the supplier, tax ID of the company, and tax type (IR or INSS) the gross amounts and contribution amounts paid.

Note. INSS tax is accumulated because the IR amount is considered in the INSS calculations.

Pessoa Jurídica is the IR tax that is levied on legal entities. For corporate entities, the tax rate varies, according to the type of service. The taxable income is the value of the provided services.

If a transaction is subject to IR tax, the system performs these actions for corporate entities:

1. For payments to suppliers, verifies that the negative withholding lines for ISS, INSS, and FUNRURAL are included in the payment.

2. Verifies that the supplier does not have another payment in process because the system uses accumulated amounts that might be affected by another payment.

3. Verifies the existence of a tax code in the F76011 table.

4. Calculates the withholding amount based on the percentage of the retention.

   The IR tax is calculated for each line of the voucher and is paid with the corresponding service.

5. Creates a line in the F76B0411 table for IR withholding.

6. Writes two lines to the F0411 table: one that is a positive amount that is paid to the fiscal authority and one that is a negative amount that is paid with the voucher.

7. Updates the Tax Accumulates by AN8, Company table (F76B4017).

The system accumulates by month, tax ID of the supplier, tax ID of the company, and tax type (IR, INSS) the gross amounts and contribution amounts paid.

PIS/PASEP, COFINS, and CSLL Contributions

The system uses this process flow to determine whether to calculate PIS/PASEP, COFINS, and CSLL contributions:

Process flow to determine whether to calculate PIS/PASEP, COFINS, and CSLL contributions

If withholdings apply to the payment, the system:

• Checks the Voucher Tax Processed table (F76B4012) to verify that ISS and INSS taxes were calculated.

• For payments to suppliers, checks that the negative withholding lines for ISS, INSS, and FUNRURAL are included in the payment.

• Verifies that the supplier does not have another payment in process because the system uses accumulated amounts that might be affected by another payment.

• Calculates the withholding for each line on the voucher.

  Each withholding that the system calculates is generated as a new line of the voucher.

• Creates a line in the F76B0411 table for PIS/PASEP, COFINS, and CSLL contributions.

  Vouchers subject to PIS/PASEP, COFINS, and CSLL contributions do not generate contributions if the accumulated gross amount in a month is less than the established minimum. In the first payment in which the accumulated gross amount is greater than the minimum, the system creates a line in the F76B0411 table.

• Writes two lines to the F0411 table; one that is a positive amount that is paid to the fiscal authority and one that is a negative amount that is paid with the voucher.

• Updates the F76B4017 table.

  The system accumulates by month, tax ID of the supplier, tax ID of the company, and tax type (PIS/PASEP, COFINS and CSLL) the gross amounts and contribution amounts paid.

• If the accumulated gross amount in a month is less than the minimum amount in the Minimum Withholding Amount processing option in the Brazilian Payment Process - PO program, or if the first payment in the accumulated gross amount is greater than the minimum, the system writes the tax amount and the gross amount for the voucher line in the PIS, COFINS and CSLL Below Min. table (F76B411A).

Writing Payments

When you write the payment, the system checks whether the month and the year of the write operation is equal to the month and the year of the create payment operation.

Updating Payments

When you update the payment, the system:

• Copies all calculated information to the payment tables (F0413 and F0414).

• Creates a line in the F76B0411 table for IR, PIS/PASEP, COFINS, and CSLL contributions.

• Writes two lines to the F0411 table: one that is a positive amount that is paid to the fiscal authority and one that is a negative amount that is paid with the voucher.

• Updates the accumulated taxes table (F76B4017).

  The system accumulates by month, tax ID of the supplier, tax ID of the company, and tax type (IR, INSS, PIS/PASEP, COFINS and CSLL) the gross amounts and contribution amounts paid.

Prerequisite

You must calculate INSS, ISS, and FUNRURAL before calculating IR, PIS/PASEP, COFINS, and CSLL taxes.

Setting Processing Options for Brazilian Payment Process - PO (P76B470)

Processing options enable you to specify the default processing for programs and reports. For reports, processing options enable you to specify the information that appears on reports.

PIS

COFINS

CSLL

IR

Printing the INSS Withholding Certificate

This section provides an overview of the INSS withholding certificate, lists a prerequisite, and discusses how to print the withholding certificate.

Understanding the INSS Withholding Certificate

After you process the vouchers for suppliers who performed services for you, you run the INSS/IN89 Generate INSS Withholding Cert program (R76B04008) to print the INSS withholding certificates for the suppliers. The system prints one certificate per voucher. The certificate includes this information about the supplier and the transaction for which you paid the supplier:

• The supplier's INSS Registration number, CBO code, and CNPJ/CPF number.

• The INSS tax amounts that you withheld for the supplier.

• The amount on which the withheld amount is based.

• The voucher number and date.

• The date when you issued the certificate.

Prerequisite

Run the Tax Calculation ISS, INSS, FUNRURAL and IRPJ program (R76B4310) to calculate the INSS taxes for the suppliers.

See Calculating INSS, ISS, FUNRURAL, and IRPJ Taxes.

Printing the INSS Withholding Certificate

Select A/P Tax Processing - Brazil (G76B0414), INSS/IN89 Generate INSS Withholding Cert.

Maintaining ISS and INSS Tax Records

This section provides an overview of tax record maintenance for taxes and discusses how to maintain records.

Understanding Tax Record Maintenance

The amounts for ISS, INSS, and FUNRURAL taxes are included on the invoices that your suppliers send to you. If you discover a rounding error in the amounts, you can use the F0411 Taxes Maintenance program (P76B4200) to correct the amounts. You can modify only unposted amounts.

When you change a tax amount, the system updates the F0411 and F76B0411 tables with the new values, and updates the F76B4012 table to show that the tax was changed manually.

Note. Use the Taxes Maintenance program only to correct rounding differences in the tax amounts. Use the Review A/P Tax Code program (P76B0401) to correct setup errors that cause errors in the tax amounts. Use the Nota Fiscal Check & Close program (P76B900) to process other changes to tax amounts.

See Also

Setting Up Withholding Tax Codes

Working with Errors on Notas Fiscais for Brazil

Forms Used to Maintain Tax Records

Maintaining Records

Access the Voucher Additional Information - Revision form.

Generating a Summary Report for CSLL, COFINS, and PIS/PASEP Taxes

This section provides an overview of the summary report for CSLL, COFINS, and PIS/PASEP taxes and discusses how to:

• Run the report.

• Set processing options for Summary IRPJ/CSLL/COFINS/PIS (R76B04010).

Understanding the Summary Report for CSLL, COFINS, and PIS/PASEP Taxes

After you post vouchers and run the Create Payment Control Groups program, you can generate a report that summarizes the taxes withheld for a supplier. The Summary IRPJ/CSLL/COFINS/PIS report (R76B04010) includes:

You use data selection to select the supplier for whom to process records, and use processing options to specify the calendar year, name of the person responsible for the report, and the date of the report.

Running the Summary of IRPJ/CSLL/COFINS/PIS Report

Select A/P Tax Processing (G76B0414), Summary IRPJ/CSLL/COFINS/PIS.

Setting Processing Options for Summary of IRPJ/CSLL/COFINS/PIS (R76B04010)

Processing options enable you to specify the default processing for programs and reports.

General

Signature

Generating the Text File for Taxes for Brazil

The Text File Generation for Fed. Tax Auth. program (R76B04006) generates a flat file for IR taxes for a 12-month period. The report is organized by the address book numbers of the suppliers and by the Recieta code that is assigned to the suppliers.

This section discusses how to:

• Run the Text File Generation for Fed. Tax Auth report.

• Set processing options for Text File Generation for Fed. Tax Auth. (R76B04006).

Running the Text File Generation for Fed. Tax Auth. Report

Select A/P Tax Processing - Brazil (G76B0414), Text File Generation for Fed. Tax Auth.

Setting Processing Options for Text File Generation for Federal Tax Authority (R76B04006)

Use these processing options to specify company information and the period and year for which the report is run.

Company

Person

Directory

Process

Printing Withholding Tax Reports for Brazil

This section provides an overview of withholding tax reports and discusses how to:

• Run the INSS report.

• Set processing options for INSS Report (R76B04001).

• Run the FUNRURAL report.

• Set processing options for FUNRURAL Report (R76B04002).

• Run the DARF report.

• Set processing options for DARF (R76B04003).

• Run the Statement of Earnings - Individual report.

• Set processing options for Statement of Earnings - Individual (R76B04004).

• Run the Statement Issue - Corporate report.

• Set processing options for Statement Issue - Corporate (R76B04005).

Understanding Withholding Reports

After the system calculates the taxes, you can generate reports and magnetic media to meet legal requirements. You generate a weekly collection report and an annual report that informs the federal Department of Revenue of the individuals and legal entities for whom you calculated taxes.

INSS Report

The INSS Report program (R76B04001) produces a report that contains the withheld amounts of INSS taxes during period (monthly) accounting. You determine the period to report by setting processing options. The system selects data from the F76B0411 table for the period that you select. The report summarizes by voucher the INSS amount that your company withholds, and shows the amounts and open amounts for each company, INSS code, and supplier address book number combination. The report also includes the Código Brasileiro de Operações (CBO) code and the supplier's INSS registration number.

FUNRURAL Report

Use the FUNRURAL Report program (R76B04002) to print the withheld amounts of FUNRURAL taxes during period (month) accounting. You determine the period to report by setting processing options. The system selects data from the F76B0411 table for the period that you select. The report shows the amounts and open amounts for each company and supplier address book number combination.

DARF Report

Use the DARF program (R76B04003) to print the withheld amounts of IR taxes during period (month) accounting. You determine the period to report by setting processing options. The system selects data from the F76B0411 table for the period that you select. The report shows the amounts and open amounts for each company and supplier address-book number combination.

You use this report to gather information that is required for the DARF report.

Statement of Earnings - Individual Report

Use the Statement of Earnings - Individual program (R76B04004) to print the withheld amounts of IR taxes for individuals during period (month) accounting. This report runs over the F0101 and F76B0411 tables for the period that you select. This program gathers data only for address book records for which the Person/Corporation code is 1. You determine the period to report by setting processing options.

The report shows the accumulated tax amounts and the basis of the calculation for each IRRF code, address book number, and company.

Statement Issue - Corporate Report

Use the Statement Issue - Corporate program (R76B04005) to print the withheld amounts of IR taxes for corporate entities during period (month) accounting. This report runs over the F0101 and F76B0411 tables for the period that you select. This program gathers data only for address book records for which the Person/Corporation code is 2. You determine the period to report by setting processing options.

The report shows the accumulated tax amounts and the basis of the calculation for each IRRF code, period, address book number, and company.

Prerequisites

Before you complete the tasks in this section:

• Add the CBO code to each supplier who is included in the report.

  You add this code in the Complementary ID field on the Address Book Additional Information - Brazil form in the Address Book Additional Information - Brazil program (P01012BR).

• Run the Tax Calculation ISS, INSS, FUNRURAL and IRPJ program to calculate the INSS taxes for suppliers.

Running the INSS Report

Select A/P Tax Processing - Brazil (G76B0414), INSS Report.

Setting Processing Options for INSS Report (R76B04001)

Use these processing options to specify the period and year for which the report is run.

INSS

Running the FUNRURAL Report

Select A/P Tax Processing - Brazil (G76B0414), FUNRURAL Report.

Setting Processing Options for the FUNRURAL Report (R76B04002)

Use these processing options to specify the period and year for which the report is run.

FUNRURAL

Running the DARF Report

Select A/P Tax Processing - Brazil (G76B0414), DARF.

Setting Processing Options for DARF (R76B04003)

Use these processing options to specify the period and year for which the report is run.

DARF

Running the Individual Withholding Report

Select A/P Tax Processing - Brazil (G76B0414), Statement of Earnings - Individual.

Setting Processing Options for Statement of Earnings - Individual (R76B04004)

Processing options enable you to specify default processing values.

Period

Company

Running the Statement Issue - Corporate Report

Select A/P Tax Processing - Brazil (G76B414), Statement Issue - Corporate.

Setting Processing Options for Statement Issue - Corporate (R76B04005)

Processing options enable you to specify the default processing for programs and reports.

Period

Company