Understanding Setup for Supplier Withholding for Brazil
Before the JD Edwards EnterpriseOne systems can calculate Brazilian supplier withholding taxes, you must set up the tax tables, UDCs, AAIs, and other information that the system needs to perform the calculations.
You can set up your system to perform calculations for these taxes:
Tax |
Explanation |
|---|---|
IR (Imposto de Renda) |
A federal income tax that is levied on services that are provided by individuals or legal entities. |
ISS (Imposto sobre Serviços) |
A tax that is defined by the city of origin of the job or service. |
INSS (Instituto Nacional do Seguro Social) |
The national social security tax. Some types of services are subject to INSS tax. The tax amount is added to the value of the provided service. |
FUNRURAL (Fundo de Assistência e Previdência do Trabalhador Rural) |
The income tax for agricultural businesses. It is similar to the IR tax for corporations, but the rate at which the income is taxed is different. |
PIS/PASEP |
A mandatory contribution that is levied as a percentage of monthly billings. The PIS contribution is made to Brazilian social programs by private companies and enterprises. The PASEP contribution is made to Brazilian social programs by public or government entities. |
COFINS |
A mandatory contribution that is levied as a percentage of monthly billings on merchandise and services. |
CSLL |
A tax on net gains. |
The system calculates IR, PIS/PASEP, COFINS, and CSLL taxes when an automatic or manual payment is created. The system writes the tax information to the F0411 table and the Voucher Additional Information Brazil table (F76B0411) after the payments are updated.
Taxes for INSS, ISS, and FUNRURAL are calculated after vouchers are entered, and before payments are made. The system calculates the taxes on both posted and non-posted vouchers.
To set up your system to calculate Brazilian social security and income taxes, you must:
Set up these UDCs:
Document Type (00/DT).
Purchase Use (76/PU).
Retired IR-PF (Income Tax) (76B/AP).
Dependence Reduction IR-PF (76B/DP).
Document Type INSS - Brazil (76B/DT).
INSS Code (76B/IN).
Receita Code (76B/IR).
Service Code (76B/IS).
Explanation of Installments (76B/OB).
Tax Code A/P (76B/TR).
Maximum Monthly INSS Amount (76B/TX).
Cross Reference - Due Date Tax (76B/VE).
Doc Types Unaffected Withholding (76B/UW).
Set up the IR, INSS, PIS, COFINS, CSLL, and FUNRURAL tax codes that you need.
Set up the income range, percentage of funds to be withheld, and the amount of the deduction for IR taxes for individuals.
Set up purchase use codes for PIS/PASEP, COFINS, and CSLL contributions.
Set up date ranges, due date rules, and payment terms in the Advanced Payment Terms module in the JD Edwards EnterpriseOne Accounts Payable system.
Complete the appropriate fields for every vendor for which you calculate supplier withholding taxes on the Tax Information tab on the Address Book Additional Information - Brazil form in the Address Book Additional Information - Brazil program (P01012BR).
For INSS taxes, enter the Código Brasileiro de Operações (CBO) code for the supplier in the Complementary ID field on the Address Book Additional Information - Brazil form in the Address Book Additional Information - Brazil program.
Complete these fields in the Item Master program for every item for which you will calculate supplier withholding taxes:
Retention of IR
Reduction IR
Complete these fields in the Branch/Plant Master program for every item for which you will calculate supplier withholding taxes:
Retention of IR
Reduction IR
For INSS taxes, enter in the Service Taxes Paid Externally program (P76B0403) the INSS contribution amounts that are held by others.