Understanding Setup for ISS Withholding
ISS (Imposto sobre Serviços) is a withholding tax that is applied to your suppliers. You calculate ISS withholding for services that you obtain. The withholding amount varies depending on the service type and city.
You must set up codes for the city, service type, and other factors that the system uses when you enter purchase orders.
To set up your system for ISS withholding:
Set up your suppliers for which ISS withholding applies.
You use Brazil-specific address book forms to set up your supplier records. When no purchase order is associated with a voucher, the system uses the values in the supplier's address book record to determine whether to apply ISS withholding, and the city and service codes to use.
Set up fiscal city codes, if they do not exist in your system.
The fiscal city code is used in many programs for Brazil. If you have not previously set up the codes in the Supplemental Data Base program (P00092) and the Fiscal City Codes (76B/FC) UDC table, you must set them up to use the ISS functionality.
Set up national service codes.
A national service code exists for each service type. The setup of national codes is optional. If you set up the codes, the system saves them to the Withholding by City and Service Detail table (F76B415) for future use.
Set up service type codes for cities.
The service code used by cities might differ from the national code. You select from the values that you set up when you enter Brazil-specific information for purchase orders.
Set up payee information by city code.
You specify the payee and payment terms for the withholding amounts that you send to the cities.
Associate fiscal city codes to the national codes.
You associate service type codes for cities to the national service codes. Setting up national codes is an optional task.
Set up effective dates and retention percentages by a city/national code combination.
The system uses the values that you specify when you calculate ISS withholding.