1. Localizations for Brazil Implementation Guide
  2. Understanding How to Calculate INSS Withholding by Voucher Line

Understanding How to Calculate INSS Withholding by Voucher Line

You can cause the system to calculate the INSS withholding by voucher line by entering different purchase use codes for each line on a purchase order. If a voucher does not include lines with different purchase use codes or if you use the processing options to override the purchase use code in the voucher lines, then the system calculates INSS withholding for the voucher amount.

To have the system calculate the INSS withholding for each line of the voucher:

  1. Set up INSS withholding rates and other INSS information in the Review A/P Tax Code program (P76B0401).

  2. Set up values in the Purchase Use (76/PU) UDC table with codes to describe the INSS withholding.

    You must include the INSS withholding rate code for retention, aggregation, or both from the Review A/P Tax Code program in the Description 02 field of the UDC code.

  3. Enter a purchase use code for each purchase order line on the P.O. Detail Brazilian Add Information form.

    The system displays the P.O. Detail Brazilian Add Information form after you enter standard order entry information and click OK on the P.O. Header Brazilian Add Information form.

  4. After processing receipts, match the receipts to the voucher that you create to pay the purchase order lines.

    Note: The system calculates INSS withholding by each line only if the voucher includes lines with different purchase use codes (PUC) that are set up with different formulas. If all of the lines on a voucher have the same PUC or PUCs with the same formula, the system calculates the INSS withholding for the voucher amount.

  5. Run the Tax Calculation ISS, INSS, FUNRURAL and IRPJ program with the processing options on the INSS tab set with these values:

    • Calculate INSS processing option is set to 1.

    • Purchase Use Code processing option is blank.

    • Brazil Tax Information processing option is blank.

    • Complete the other processing options on the tab as needed.

      Note: The Purchase Use Code and Brazil Tax Information processing options override the values that you enter for the purchase use code in the purchase order. If you enter a value in either of these processing options, the system ignores the purchase use codes in the purchase order and calculates the INSS withholding by the voucher amount, not by each line item. The system uses the value in the Purchase Use Code or Brazil Tax Information processing option to determine the rate to use in the calculations.