Understanding How to Process Recoverable Tax Amounts for Purchase Order Returns in Brazil

The Sales Update – Brazil program (R76B803) enables you to process recoverable tax amounts for purchase order return transactions. You run the Sales Update – Brazil program to update the Sales Order Header File (F4201) and Sales Order Detail File (F4211) tables after you enter the credit order in the Sales Order Entry program (P4210). The Sales Update – Brazil program uses the nota fiscal number of the purchase return to access the Purchase Use (76/PU) UDC table to verify if amounts for specific tax types are recoverable.

This table shows the values that must exist in the Special Handling Code field of the 76/PU UDC table to indicate that amounts for a tax type are recoverable:

Tax Type	Value and Position in Special Handling Code Field
IPI	Value of 1 in position 1.
ICMS	Value of 1 in position 2.
ICMS Substitution	Value of 1 in position 3.
PIS	Value of 1 in position 5.
COFINS	Value of 1 in position 6.

If the position for the tax type in the Special Handling Code field is blank or includes a value other than 1, the system does not process the tax lines as recoverable when you process purchase order returns.

A processing option in the Sales Update – Brazil program enables you to specify the line type to process as recoverable tax.

To set up your system and reverse taxes for purchase order returns:

1. Verify that AAIs 4220 and 4240 are set up to process IPI, ICMS, ICMS substitution, PIS, and COFINS recoverable taxes.

2. Set up a line type in the Order Line Types program (P40205) to use to identify recoverable tax lines on purchase order returns.

   You must clear the A/R Interface and A/P Interface options, and select the G/L Interface and Inv. Interface options on the Line Type Constants Revision form for the line type that you set up for the recoverable tax lines.

3. Set up order activity rules for the purchase return document with the line type that you set up for recoverable tax lines.

   The order activity rules for the purchase return should include two steps; one to generate tax lines when you run the Sales Update-Brazil program and another to run the Sales Update program (R42800). The statuses for these purchase return steps should be the same as the statuses for the processing of the tax lines when you run the Sales Update – Brazil program.

4. Set up two versions of the Sales Update program.

   You set up a version to update accounts receivable records and one to omit the update to accounts receivable records. You use the version that does not update accounts receivable records to reverse the tax lines for the purchase return.

   Note: For most transactions, you use a version of the Sales Update program that updates the accounts receivable records. You might have an existing version that you can use. The version that you must set up that does not update accounts receivable records is specific for purchase order returns.

5. Enter the line type that you assigned to the recoverable taxes in the Line Type processing option in the Sales Update - Brazil program.

6. Enter a purchase return order, confirm shipment, generate the nota fiscal, and print the nota fiscal.

7. Run the Sales Update - Brazil program to create records for the purchase return in the Detail Sales Order table (F4211).

   When you run the Sales Update – Brazil program, the system adds new lines for recoverable taxes to the F4211 table using the line type that you specified in the Line Type for purchase return recoverable tax lines processing option. The lines for the recoverable taxes do not have an invoice date, type, or number assigned. The purchase return document has an invoice number assigned in a previous step, but the new lines do not have this information because the lines do not affect the accounts receivable records; they only impact Cardex and general ledger records. This process updates item costs. The system retrieves the recoverable taxes amounts from the original purchase order.

8. Run the version of the Sales Update program that updates accounts receivable records to process the non-tax lines in the purchase return and update the item history, item cost, and the F4211 table.

   Set the data selection so that the Document (Voucher, Invoice, and so on) (F4211) is not equal to Zero, and the Status Code – Next (F4211) is not equal to 999.

9. Run the version of the Sales Update program that does not update accounts receivable records to process the tax records in the F4211 table.

   This version updates general ledger records with the recoverable taxes amount.

   Set the data selection so that the Document (Voucher, Invoice, and so on) (F4211) is equal to Zero, the Status Code – Next (F4211) is not equal to 999, and the Document Type is equal to the document type of the purchase return document.