Tax Amount Withheld by Other Companies

To calculate INSS_PF tax for a supplier as a person who provides services to more than one company, the tax withheld in a month by all the customers of the supplier must be considered.

INSS_PF tax is tax on the invoice gross amount after accounting for the total tax withheld by all the customers of the supplier in the current month. A supplier must report all the withheld tax deducted in the month to the buyer, so the buyer can use this information for calculating the withholding tax.

Oracle ERP Cloud can record the tax withheld in a month by all the customers of the supplier and process the withholding tax calculations accordingly. When entering an invoice in Payables, you can enter the tax amount withheld by earlier companies in the Additional Information tab of the Withheld Tax Amount attribute. You can also configure threshold buckets level to All to accommodate tax withheld by all the customers of the supplier in the month.

To configure Thresholds, follow these steps:

1. Sign in as a Tax Manager.
2. Click Navigator, Setup and Maintenance.
3. Search for Manage Taxes.
4. Search for INSS_PFTax.
5. Configure Thresholds in the Threshold Controls tab of INSS_PFTax.
6. Enter these values:

Attribute	Value	Comments
Threshold Buckets Level	All	Threshold applicability set to accommodate tax withheld by all the customers of the supplier in the month.
Threshold Basis	Period	Period based threshold is required for this example.
Withholding Tax Calendar	Used Defined Calendar	INSS_PF threshold is applicable for a month.
Threshold Type	Tax Amount	-
Minimum Value	-	No minimum threshold value for INSS_PF.
Maximum Value	406.09	Maximum threshold value for INSS_PF is 406.09 BRL.

For example the supplier as a person provides services to XYZ Inc. and has provided services to ABC Inc. previously. The tax withheld by ABC Inc. is 200 BRL for the same period. The XYZ Inc. clerk enters the invoice and the ABC Inc. withheld tax amount of 200 BRL (in the Invoice Additional Information tab of the Withheld Tax Amount attribute) and validates the invoice.

Payables Invoice Transaction Line

Here is the Payables Invoice transaction line:

Invoice Date	Invoice Number	Product Type	Amount	Withheld Tax Amount (Additional Information Tab)
05/01/17	877	Service	2000.00	200.00 BRL
Total			2000.00 BRL	-

Tax Determination Process: INSS_PF Tax Computation

Total invoice amount	2000 BRL
INSS_PF tax amount	(2000*11%) = 220 BRL
Tax amount retained by earlier companies	200.00 BRL
INSS_PF tax on the invoice is restricted to the maximum threshold limit 406.09	406.09-200.00 = 206.09 BRL

Withholding Tax Line

After the tax determination process successfully completes, the withholding tax line is created:

Tax Line	Tax Regime	Tax Name	Tax Status	Tax Jurisdiction	Tax Rate	Tax Amount
1	<User-defined withholding tax regime>	INSS_PF	Standard	Brazil	10.304%	-206.09 BRL