Purchase Use (76/PU)

Set up purchase use codes to identify how the item being purchased will be used, or in some instances, to specify the type of transaction. The purchase use of the item determines the tax recoverability of the item. For example, you can set up codes to identify purchases as:

Codes	Description 01	Description 02	Special Handling Code
(blank)	(blank)		0000
AF	Fixed Assets		0100
CON	Purchase Internal Consumption		0000
EMB	Packaging Products		1101
IN1	Individual - Retention and Aggregation	INSR/INSA	0000
IN2	Individual - Retention only	INSR/	0000
RAW	Raw Materials	INSS/INSA	0101
RES	Purchase for Resale		1102
SVC	Services	INSS/INSA	0000

Note: These codes are user-defined, except for CON and AF. Both CON and AF are hard-coded in the system.

The system uses the first four characters in the Special Handling Code field to determine the tax recoverability of the purchased item. Use position 1 for IPI tax and position 2 for ICMS tax. Position 3 is reserved for future use. For positions 1, 2, and 3, enter 1 for recoverable and 0 (zero) for nonrecoverable taxes.

The system uses position 4 of UDC table 76/PU for items that are purchased for manufacturing or purchased for resale. The fourth position determines the suggested Transaction Nature code for those companies to which ICMS Substitution applies. Enter 1 in position 4 when buying or transferring items for manufacturing purposes. Enter 2 in position 4 when buying or transferring items for resale purposes.

See Setting Up UDCs for Supplier Withholding for Brazil.