1. Localizations for Brazil Implementation Guide
  2. Example of Withholding by Invoice Date for Withholding Method 1

Example of Withholding by Invoice Date for Withholding Method 1

Suppose that you have set up the following criteria for calculating PIS, COFINS, and CSLL withholdings:

  • The company is set up to calculate the withholding amounts based on the month of the invoice in the Withholding Taxes on Services - Calculation Method program (P76B220).

  • The company is set up to use Withholding Method 1 in the PIS-COFINS-CSLL Minimum Withholding Setup program (P76B410) and the minimum amount is 10.00 BRL (Brazilian reais).

  • The rate for PIS withholding is set up as .65%.

  • The rate for COFINS withholding is set up as 3%

  • The rate for CSLL withholding is set up as 1%.

If your system is set up using the criteria listed above, a payment amount of 200 BRL would result in no withholdings because the total of the withholding amounts for PIS (1.3), COFINS (6) and CSLL (2) would equal 9.3, and would be below the minimum of 10 that is set up for the company. If the payment amount is 300, then the system would print lines for the withholding amounts on the nota fiscal because the total of PIS (1.95), COFINS (9), and CSLL (3) is equal to 13.95 and would exceed the minimum amount of 10 BRL.

You might have multiple payments for an invoice. If so, the system will use the total of the withholdings for all payments for the single invoice to determine whether to print lines for the PIS, COFINS, and CSLL withholding. For example, suppose that you have an invoice for 300 BRL, and the amount is split into two payments on different dates; one payment is 100 BRL and the other is 200 BRL. The total of the withholding for PIS, COFINS, and CSLL for the first payment of 100 BRL is 4.65, which is below the minimum, so no withholding lines are printed on the nota fiscal for this payment. The total of the withholding amounts for the second payment of 200 BRL is 9.3, which is also below the minimum amount. However, because the total of the withholding for the invoice exceeds the minimum (4.64 + 9.3 = 13.95), the system prints the withholding lines for the total of the two payments on the nota fiscal for the second payment.