Charges During Tax Calculation

Certain taxes in Brazil require inclusion of charges while calculating taxable basis value of a transaction line. Oracle Tax lets you handle charges for tax calculation through taxable basis formula.

If the taxable basis type within a taxable basis formula is specified as Line amount, then you can add freight, insurance, packing charges, miscellaneous, and subtract commercial discount on the transaction line value.

If a transaction line is categorized into any of these charge types: freight, insurance, miscellaneous, packing charges, or commercial discount, and if the taxable basis formula of a tax is configured to consider these values during tax calculation, then the corresponding allocated values from these lines (to the item lines) are added or subtracted while calculating the taxable basis value of that tax.

This table lists the line amount for two products along with some charges.

Line	Description	Amount	Allocation
1	Item A	2800
2	Item B	1000
3	Freight	100	Freight for item A is 60 and item B is 40
4	Commercial Discount	-20	item A is -20

If IPI tax is applicable on item A and taxable basis formula associated with it has the options to add allocated freight and subtract commercial discount, then the taxable basis amount for transaction line 1 is 2,840 USD.

This table gives the breakup of the taxable amount.

Component	Amount
Transaction line value	2800
(add) Allocated freight	60
(subtract) Commercial discount	20
Taxable Basis	2840