How to Validate Tax IDs in Latin American Countries
This chapter discusses:
How to validate tax IDs in Latin American countries.
(ECU, PER, and VEN) Tax rate/areas for Ecuador, Peru, and Venezuela.
(COL and ECU) Tax explanation codes for Colombia and Ecuador.
(CHL and PER) Nonreimbursable value-added tax (VAT) processing for Chile and Peru.
How to Validate Tax IDs in Latin American Countries
The logic for validating tax IDs for customers and suppliers for Latin American users in countries for which localized solutions are available is different from the logic for users in other countries. JD Edwards EnterpriseOne software supports localized software for these Latin American countries:
Argentina
Brazil
Chile
Colombia
Ecuador
Mexico
Peru
Venezuela
The standard logic for validating tax IDs uses the country code of the customer or supplier, along with values in the Tax Id Validation (70/TI) user-defined code (UDC) table. For the Latin American countries, the logic uses the user’s country code as set up in the User Profile Revisions program (P0092) when:
The user’s country code is different from the supplier or customer country code, and
The user’s country code is for a supported Latin American country.
For example, if the user’s country code is AR (Argentina) and the supplier’s country code is IT (Italy), the system:
Verifies that the IT value exists in the 70/TI UDC table.
Uses the validation routine for Argentina instead of the validation routine for Italy.
Note. If both the user country code and the supplier or customer country code are in supported Latin American countries, do not set up the 70/TI UDC table with values for the supplier or customer country codes. For example, if the user is in Brazil, and the supplier is in Argentina, do not set up a value of AR in the 70/TI UDC table. Because the AR value does not exist in the 70/TI UDC table, the system will use the tax ID validation for the supplier’s country (Argentina).
(ECU, PER, and VEN) Tax Rate/Areas for Ecuador, Peru, and Venezuela
Use tax area types to specify whether a tax area is for solidarity, withholding, or VAT. Tax rate/areas are stored in the F4008 table.
You should set up tax rate/areas within a structure, for example, A BBB CCC D. This table represents how you can set up the structure:
|
Character |
Example |
|
A (Tax type) |
G (General VAT) |
|
BBB (Tax concept) |
COM (Purchasing) HON (Fees) SER (Services CMI (Commissions) ARR (Leasing) M (Manual tax settlement) Note. Use M when no specific VAT or withholding percentage exists and the tax calculation is entered manually. |
|
CCC (Tax subgroup) |
For COM (Purchasing):
For SER (Services):
For ARR (Leasing):
For M (Manual tax settlement):
|
Using this example, tax areas could be:
GCOMGEN – General VAT for automatic general purchases.
EHONGENM – Manual exempt general fees.
(ECU) Set up the first line of the tax area for rent withholding and the second line for VAT withholding.
(COL and ECU) Tax Explanation Codes for Columbia and Ecuador
Colombian and Ecuadorian localizations use four tax explanation codes from the Tax Explanation Codes (00/EX) UDC table:
C: VAT + Sales tax
V: VAT
CT: VAT + Sales tax, tax only
VT: VAT, tax only
These tax explanation codes are hard-coded for the JD Edwards EnterpriseOne Accounts Payable and JD Edwards EnterpriseOne Accounts Receivable systems.
See Also
Understanding Tax Explanation Codes
(CHL and PER) Nonreimbursable VAT Processing for Chile and Peru
According to VAT law provisions, fiscal credit can be taken only within the four tax periods following the invoice issue date, provided that VAT reimbursability validation is defined in the Company Constants by months or days.
You must set up:
Legal Company Constants.
Set up the quantity of days and months for the VAT reimbursability and the date to be used to verify days and months.
Tax area equivalence.
Specify which is the tax area with equivalent nonreimbursable fiscal credit for each fiscal credit of tax area.
Tax rate/area.
Set up the tax area to use to enter the fiscal credit.
If the difference of days or months in a voucher is greater than the date specified in the Company Constants (nonreimbursable VAT), the system automatically modifies the tax area and the tax explanation code so that they are recorded as nonreimbursable taxes.
For each voucher line, the entered tax area is replaced by its correlative area stated in the tax area constants when these conditions apply:
Invoice date exceeding the legal time.
Tax type equal to VAT.
Tax percentage in the tax area different from 0.
Typically, you should use an explanation code S for the nonreimbursable VAT because this code does not discriminate tax. You can also enter vouchers with a tax explanation code and a nonreimbursable tax area code without the automatic system change option.