Understanding the Tax Hierarchy for an Address Book Number

The introduction of VAT in Brazil with the Brazil tax reform has introduced taxes at federal, state, and municipal level. Use the Tax Hierarchy Setup program (P76CT001) to define the country level, state level, city level tax rates, and the G/L tax codes for an address book number. When you enter an address number, the system retrieves the country code and the state code for that address book number from the Address Book Master table (F0101). You can enter the city code for the address book number, and then define the tax rates and G/L codes at the country, state, and city level. When you use this address book number as the Ship To number in the purchase order or a sales order, the system retrieves the tax rates that you configure for this number.