Tax Authority Requirements in Brazil

You must set up Oracle Shipping to comply with tax authority requirements for sales oder shipments in Brazil.

Before you set up, consider these points:

• Should shipments be auto-ship confirmed at fiscal document approval? This determines how the shipment should be confirmed when the fiscal document is approved. You need to decide if this should be a manual or an automated process.

• How should Operations Fiscal Codes (CFOPs) be added to the shipment? Do you want to use rules set up in Oracle Fusion Cloud Order Management to default CFOPs or enter them manually on the Manage Shipment Lines page or in Oracle Order Management.

Automatically Ship Confirm at Fiscal Document Approval

If you want to automatically ship confirm at fiscal document approval, here's what you need to do:

1. In the Setup and Maintenance work area, go to the Manage Shipping Parameters Unit task:

   • Offering: Manufacturing and Supply Chain Materials Management

   • Functional Area: Shipping

2. On the Manage Shipping Parameters page, select the Automatically ship confirm at fiscal document approval check box, if you want a shipment to automatically ship confirm at fiscal document approval.

Note: Ensure your outside processing item has a cost prior to generating a fiscal document. If the item has never been transacted in the organization or the costing method is average, you will need to perform a miscellaneous receipt before establishing the cost.

While generating reports The BI Subject area is Shipping Real Time Subject Area.

Use Fiscal Operation Codes in Transactions Originating from Brazil

Codigo Fiscal de Operacoes Mercantis e Prestacoes de Servico (CFOP) refers to operations fiscal codes defined by the Brazilian tax authorities that describe the type of business transaction (for example, sales order, drop shipment, and outside processing). They represent the fiscal classification related to the destination of the service or material involved in a shipment. A CFOP contains information about the good's origin as well as the type of operation, such as sales, returns, stock transfers, or services.

The ship from and ship to location combinations of the shipment are used to determine a CFOP. Shipping defaults CFOPs from rules that are set up in Oracle Fusion Cloud Order Management, or you can enter them in the Shipping pages, Manage Shipment Lines or Edit Shipment > Transaction Business Category field.

This table indicates the different business process flows supported for complying with tax authority requirements for sales order shipments in Brazil and possible CFOP codes.

Flow	Flow Type	Where to get CFOP Code	Possible CFOP Codes
Sales Order Shipment	Sale of purchased items	Sales order VIB rules	5101, 6101
Sales Order Shipment	Sale of OEM items	Sales order VIB rules	5102, 6102
Drop Shipment Supplier	Supplier-manufactured items	Entered in Shipping page	5118, 6118
Drop Shipment Supplier	Supplier-purchased items	Entered in Shipping page	5119, 6119
Drop Shipment Seller	Sale of purchased items	Sales order VIB rules	5120, 6120
Outside Processing	Movement of outside processing supplier	Entered in Shipping page	5124, 6124
Consignment Return	Symbolic return of consigned material	Original PO receipt	5919, 6919

Add Freight Costs and Charges to a Brazil Shipment

You can add freight costs and charges to a shipment for a Brazil organization.

When you add a freight cost or charge item to a sales order, the freight cost or charge applies to the entire shipment regardless of the quantities shipped on the shipment lines.

You have to set up a non-shippable inventory item in Oracle Product Information Data Management for the freight costs and charges for a shipment. The item is entered on the order in Oracle Fusion Cloud Order Management with Product Type as Goods.

Note: Partial shipments can't include freight charges.