Example of Transaction Business Categories

Transaction business categories classify transaction lines for tax determination and reporting.

The following scenario illustrates how transaction business categories can be used for tax determination and reporting in Brazil.

Scenario

In Brazil, you need to identify a transaction correctly to be able to report and determine the correct applicable taxes. Create specific transaction business categories as children of the sales transaction. The transaction business categories include:

Level	Fiscal Classification Code	Fiscal Classification Name	Country	Start Date
1	SALES_TRANSACTION	Sales Transaction	Not applicable	1-Jan-1951
2	INTERSTATE MNFTRD FOR SALE	Interstate Manufactured for Sale	Brazil	The earliest transaction date or start date of tax.
2	INTERSTATE MNFTRD FOR MANUFACTURE	Interstate Manufactured for Manufacture	Brazil	The earliest transaction date or start date of tax.

To create these transaction business categories:

1. Select the SALES_TRANSACTION record on the Manage Transaction Business Codes page.

2. Click Create Child Node. The Create Fiscal Classification Code page appears.

3. Enter the values as shown in the table. By default, the start date is the start date of the sales transaction parent record, that is, 1-Jan-1951.

4. Specify the latest of:

   1. Earliest applicable transaction to be used in the implementation.

   2. Start date of the applicable Brazilian tax.

Tip: Specify the country name while creating transaction business categories. This ensures that a limited applicable list is presented while entering the transaction business category during transaction or tax rule creation.

Tip: Classify the nonstandard items as standard items while using the transaction business categories classification. This can be modeled as a default tax rule and therefore, doesn't require an explicit classification or an explicit tax rule. Classify only exception items and define specific tax rules for them. For a standard item, none of the explicit tax rules are applicable and the default rate applies.