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 Tax Calculation ISS, INSS, FUNRURAL and IRPJ program.