Manage Tax Charges

In Brazil, the taxable basis value of a transaction line includes charges such as freight, insurance, packing charges, miscellaneous, and exclusion of commercial discount.

Follow these steps:

1. Sign in as a Tax Manager.
2. Click Navigator, Setup and Maintenance.
3. Search for Manage Tax Formulas.
4. Click Add.
5. Select Line Amount as the taxable basis type, which is the amount given on the transaction line as taxable basis. Add freight, insurance, packing charges, miscellaneous, and subtract commercial discount to the transaction line value.
6. Define the taxable basis rule by using the appropriate tax determining factor to use the newly defined taxable basis formula in the tax determination process.

Tax Determination Process

If IPI tax is applicable on Item-A and the associated taxable basis formula has the option to add allocated freight and subtract commercial discount, then the taxable basis amount is calculated:

Component Used	Amount
Transaction line value	2,800 (+)
Allocated freight	60 (-)
Commercial discount	20
Taxable Basis	2,840

The tax determination process applies the 18% tax rate on the taxable basis amount and creates a tax line.

Tax Line

Here is the tax line:

Tax Line	Rate Name	Rate	Tax Amount	Tax Regime	Tax Name	Tax Status	Tax Jurisdiction
1	IPI_18	18	511.20	IPI	IPI	Standard	Brazil