Differential Taxes Due to Differences in Taxable Basis
You can configure Tax Calculation Formula.
ICMS-ST is levied on the value added taxable basis. After calculating ICMS-ST tax amount, ICMS is deducted.
Here is an example:
| ICMS-ST computation based on MVA for intrastate trade | |
|---|---|
| Selling Price | 100 BRL |
| Own ICMS 18% on sales price to Wholesaler | (100*18%) = 18 BRL |
| MVA | 80% |
| ICMS ST Taxable Basis | (100+80) = 180 BRL |
| ICMS ST 18% on sales price to Customer | (180*18%) = 32.40 BRL |
|
ICMS ST 18% after deducting regular ICMS on sales price to Wholesaler |
(32.40 -18) = 14.40 |
You can configure the tax calculation formula to associate ICMS-ST with a compounding rule for subtracting the ICMS tax. The tax calculation formula determines the tax amount on a transaction line. The ICMS-ST tax amount must deduct ICMS because both taxes are applicable on the same transaction line. You must define a tax calculation formula with the compounding criteria to address this requirement.
To create a tax calculation formula:
- Sign in as a TaxManager.
- Click Navigator , Setup and Maintenance.
- Search for Manage TaxFormulas.
- Select Tax Calculation Formulas as the tax formula type.
- Click Add to create a new formula using these attributes.
Header Attribute Value Comments Tax Regime Code ICMS Select the respective regime for ICMS-ST tax, the setup taxes ICMS and ICMS-ST are under one tax regime ICMS. Tax ICMS-ST The tax calculation formula calculates the ICMS-ST tax. Tax Formula Compounding Details Compounding Tax Regime Code ICMS The ICMS regime is used in the compounding operation. Compounding Tax ICMS The ICMS tax in the compounding tax regime ICMS is used in the compounding operation. Compounding Rate Subtract ICMS is deducted from the ICMS-ST tax amount.
Prerequisites for the new tax calculation formula: ICMS-ST is compounded on ICMS tax. The compounding precedence specified on the respective tax must support this configuration and the precedence number for ICMS must be less than ICMS-ST. Using this configuration, Oracle ERP Cloud calculates ICMS and deducts this amount from the ICMS-ST tax amount.