2 Understanding Localizations for Ecuador

This chapter contains the following topics:

2.1 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 EC (Ecuador) and the supplier's country code is IT (Italy), the system:

  1. Verifies that the IT value exists in the 70/TI UDC table.

  2. Uses the validation routine for Ecuador 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 Ecuador, 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).

The tax ID validation system for Ecuador does not allow duplicate tax ID numbers, except for related parent address book numbers. When you enter a new address number record and specify that there is an existing address book parent record with the same Tax ID, the system allows that duplicity.

2.2 Tax Rate/Areas

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):

  • GEN (General)

  • CMB (Fuel)

  • AGR (Biological assets)

For SER (Services):

  • GEN (General)

  • VYA (Control and hygiene)

  • HYR (Hotels, restaurants, and housing)

  • CON (Building)

For ARR (Leasing):

  • MUE (Movable assets)

  • INM (Immovable assets)

For M (Manual tax settlement):

  • VAT

  • RET (Source withholding)

Using this example, tax areas could be:

  • GCOMGEN – General VAT for automatic general purchases.

  • EHONGENM – Manual exempt general fees.

Set up the first line of the tax area for rent withholding and the second line for VAT withholding.

2.3 Tax Explanation Codes

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:

2.4 Specific Setup and Processes

This table lists the country-specific setup and functionality for Ecuador:

Setup or Process Description
UDCs (user-defined codes) In addition to the base software UDCs:

  • Set up UDCs for tax reporting.

  • Set up UDCs for identification type codes.

  • Set up UDCs for fiscal identification for Accounts Payable transactions.

See Setting Up UDCs for Ecuador.
Automatic accounting instructions No Ecuadoran-specific AAI setup exists.
Next numbers You must set up next numbering by company before you can process withholding certificates for rent and value-added taxes (VAT) withholding.

See Setting Up Next Numbers for Ecuador.

See "Setting Up Accounts Payable Next Numbers" in the JD Edwards EnterpriseOne Applications Accounts Payable Implementation Guide.
Address book records The logic for validating tax IDs for customers and suppliers is different in the Address Book Revisions program (P01012) for users in the Latin American countries supported by JD Edwards EnterpriseOne software.

See How to Validate Tax IDs in Latin American Countries.

In addition to entering the standard information for address book records, in Ecuador, enter country-specific information for tax reporting.

See Entering Additional Address Book Information for Ecuador.
Tax processing Ecuador-specific setup or functionality exists for:
Payment processing To process payment vouchers for Ecuador, you must set processing options for the Print Automatic Payments Check (R76E0001) program.

See Setting Up the Payment Format for Ecuador.