Localization Brazil

SAP R/3 Version

4.6C

Localization Brazil - Organizational Units

Company

There is a new organizational

Specific for Brazil called Branch

Branch 1

Plant 1

Plant 2

Branch 2

Plant 3

Plant 4

The branch is the level where tax reporting and Nota Fiscal Reporting
is done.

Localization Brazil - Branch

COMPANY

EACH Branch MUST BE ASSIGNED TO THE

COMPANY

BESIDES CNPJ (Tax Id) THE Branch MUST

HAVE THE FOLLOWING LEGAL
IDENTIFICATION :
Branch
1

STATE Inscription;
CITY Inscription;
ADDRESS;
Branch CATEGORY

Localization Brazil - How Branchs CNPJ is

composed ?
Company
Master Record

Branch
2

Branchs
CNPJ
2

INSERT THE FIRST 8 NUMBERS OF THE

THE COMPANY CNPJ

e.g. 33042730 Company Name

INSERT THE FOLLOWING 4 NUMBERS OF THE

COMPANY CNPJ

e.g. 0017 - Filial Juiz de Fora

R/3 CREATES THE CNPJ, BESIDES

CALCULATE THE Digito Verificador

e.g. 33042730/0017-71

Localization Brazil - Plant

Branch
1

After
the
Branches
are
defined, the existing plants
must be assigned to the
appropriate branch.

PLANT

PLANT

01

02

Localization Brazil - Branch

The Legal Entity identified as CNPJ generates the following
Documents and Fiscal Books:
NOTAS FISCAIS;

LIVROS DE REGISTROS DE ENTRADAS;

LIVRO DE REGISTRO DE SADAS;
LIVRO DE CONTROLE DE PRODUO E ESTOQUE;
LIVRO DE INVENTRIO;
LIVROS DE APURAO DE ICMS E IPI;
LIVRO DE REGISTRO DE ISS;
OUTRAS OBRIGAES ACESSRIAS DA FILIAL.

The SAP as Standard do not have some Fiscal Books, for that,
some reports might require an Abap development. Another choice,
often used, is to implement na specif package (bolt-on) to support
these Fiscal Books some Brazilian companies have developed
packages to support the Fiscal Books and interfaced them with
SAP.

Localization Brazil - Incoming/Outgoing Taxes

SAP delivers the calculation procedure which defines incoming tax
calculation in the Modules MM, SD and FI, besides a set of tax
codes that determine the tax type to be calculated are recorded
in the Vendor, Customer and Material Master Data.
The Localization Brazil supports the automatic calculation of the
following Taxes:

IPI tax
Is a federal tax applied when selling, transferring, etc. goods
The percentage rate and the base value depends on several
factors:

Usage of the goods

NBM code
Material
Customer (companies can be exempted from IPI)
Vendor

Localization Brazil - Incoming/Outgoing Taxes

ICMS tax

Is a state tax applied when selling, transferring, etc. goods

The percentage rate and the value base dependes on several
factors:

State of origin and state of destination of the goods

Products codes
Customer
Usage of the goods

Complement of ICMS - DIFERENCIAL DE ALQUOTA

A special case of ICMS is calculated under the following
conditions:
A company buys a product from another state
The product is used for comsumption
It is calculated as the difference between the ICMS rate
charged by the vendor and the ICMS rate that is valid when
buying in the same state. It is not added to the product price.

Localization Brazil - Incoming/Outgoing Taxes

Substituio Tributria
Substituio Tributria occurs for some products (examples:
fuel, lamps, batteries, some kind of food and beverage, etc).
It might occur both with ICMS and IPI. The procedure is: The
vendor is the one to post the tax in its tax liabilities on behalf
of the buyer. In this situation, the tax amount is not printed in
the Nota Fiscal, but a message is printed and the tax amount is
also recorded in the Fiscal Books. The Substituo Tributria
also occurs if the company is selling goods to a customer that
belongs to any industry that has the Substituio Tributria.
This happens with DEB when they are selling to automotive
industry.

Localization Brazil - Incoming/Outgoing Taxes

PIS e Cofins

They are federal taxes:

credited in the purchases of insumos and asset.(Incoming)
debited in vendas of merchandises. (Outgoing).

ISS (outgoing)
Is a municipal tax on services. The tax rate is determined by
the city of the supplier and the type of service.

Localization Brazil - Incoming/OutgoingTaxes

INSS (incoming)
Is a social security tax which the company pays when receiving
the service from a natural person.
ISSF (incoming)
If the vendor is a natural person and is not registered in the
city where the vendors service is provided, then ISS is
withheld by the company, buying the service.
IRRF (incoming)
IR is a withholding tax applied both for natural persons and
companies, with diferent rates for each type..

Localization Brazil - Incoming/OutgoingTaxes

MP 135 (Incoming/Outgoing)
Retention of the PIS, Cofins and CSLL of the rendering of
services.
IN 480 (Outgoing)
Nas vendas de mercadorias a empresas do governo, reteno
do PIS, Cofins, CSLL pelo cliente governamental. (Outgoing).

Localization Brazil - Purchasing

In Brazil depending on the vendor characteristics, it might be
required the following Legal Inscription fields in the Vendor
Master Data:
Federal Inscription - CNPJ

Legal Entity

State Inscription Inscr. Est

City Inscription Inscr. Municipal

Purchase

Natural Person

Always required

Federal Inscription - CPF

Localization Brazil - Purchasing

For a correct calculation of the taxes on the Purchase Orders it
is necessary to configure the following elements:

COMPANY
Branch
PLANT
FISCAL REGION
ICMS TABLE (REGULAR)
ICMS TABLE (EXEMPT)
NBM CODE AND IPI DISCRIMINATION TABLES (REGULAR)
IPI TABLE (EXEMPT)
CFOP TABLE
NOTAS FISCAIS TYPES
NOTAS FISCAIS FORMS
MATERIAL CODE
VENDOR
ISS

Localization Brazil - Incoming/OutgoingTaxes

FISCAL REQUIREMENTS - Info
COMPANY CODE
Global
Settings

Branch

- Company CNPJ

-Branch (IMPACTS ON ACCOUNT

RECEIVABLE AND ACCOUNTS PAYABLE)
- CNPJ EXTENSION BY Branch
- STATE Inscription
- CITY Inscription
- Branch ADDRESS
- FISCAL REGION
- Branch CATEGORY

Localization Brazil - Incoming/OutgoingTaxes

FISCAL REQUIREMENTS - Tables
JURISDICTION
CODE

REGULAR
ICMS

ICMS
EXCEPTION

- POPULATE FEDERATION UNITS

- POPULATE ICMS RATE FOR ALL INTERSTATE

OPERATIONS
ACCORDING
TO
MATERIALS
ORIGIN AND DESTINATION

- POPULATE ICMS RATE AND/OR REGULAR

CALCULATION
BASIS,
TEMPORARY
RATE,
EXCEPTIONAL RATE AND/OR BASIS (MODIFIED
BY THE LAW)

Localization Brazil - Incoming/OutgoingTaxes

FISCAL REQUIREMENTS - Tables
NCM
CODE

- POPULATE THE NCM CODE (MATERIAL LEGAL

CLASSIFICATION AND DESCRIPTION, FOR
IPI CALCULATION

REGULAR
IPI

- POPULATE IPI RATES BASED ON THE FISCAL

CLASSIFICATION OF THE IPI-NCM TABLE

IPI
EXCEPTION

- POPULATE IPI RATES AND/OR CALCULATION

BASE, TEMPORARILY, MODIFIED BY THE LAW

Localization Brazil - Incoming/OutgoingTaxes

FISCAL REQUIREMENTS - Tables

CFOP

- POPULATE CFOP CODES THAT WILL BE USED TO:

- DETERMINE INCOMING IPI TAX
- DETERMINE OUTGOING IPI TAX

NOTA
FISCAL
TYPE

- POPULATE THE NOTA FISCAL TYPE THAT WILL

BE USED ON THE INVOICE RECEIPT AND
BILLING

NOTA
FISCAL
FORM

- DEVELOP (SAPSCRIPT) THE NOTA FISCAL FORM

THAT WILL BE USED TO PRINT THE NOTA
FISCAL

Localization Brazil - Incoming/OutgoingTaxes

FISCAL REQUIREMENTS Master Data
MATERIAL
MASTER

MATERIAL
MATERIAL
MATERIAL
MATERIAL
MATERIAL

CFOP CATEGORY;
FISCAL CLASSIFICATION;
USAGE;
ORIGIN;
CLASS OF EVALUATION

VENDOR
MASTER

VENDORS DOMICLIO FISCAL;

CNPJ;
STATE Inscription;
CITY Inscription (Service Provider);
VENDOR TAX CATEGORY

Localization Brazil - Goods Movement

Everytime that a company needs to transport
some goods from/to different plants,or when
returning purchased or sold goods, a Nota
Fiscal must be issued.
Nota Fiscal replaces the invoice, and only one
document can be issued for each transport.

Goods Movement

NOTA FISCAL

Localization Brazil - Billing

Nota Fiscal is the most important legal required document in
Brazil. It replaces the invoice, and is the only document legally
accepted when you bill your goods or services.
For each billing made the number of the Nota Fiscal and the
taxes rate are required.
NOTA FISCAL Number

Billing (SAP)

Taxes
(same Taxes used for Incoming)

Localization Brazil - Billing

THE VAT FUNCTION IS USED TO CALCULATE TAXES

ACCORDING TO THE MATERIAL UTILIZATION, DEFINED ON
THE MATERIAL MASTER, BOOKING THE FISCAL CREDITS OF
IPI/ICMS ON THE FISCAL BOOKS, AND ON THE ACCOUNTS
OF GENERAL LEDGER.

Localization Brazil - VAT Calculation

PURCHASE TO COMSUMPTION

I. V. A
C0
C1
C2
C3
C4
C5

CALCULATED TAXES

No taxes
Only ICMS + Complement of ICMS
ICMS + Substituio tributria
ICMS + Complement ICMS + IPI
ICMS + Substituio Tributria + IPI
Only IPI

PURCHASE TO FIXED ASSETS

I. V. A
Z0
Z1
Z2
Z3
Z4
Z5

CALCULATED TAXES

No taxes
Only ICMS + Complement of ICMS
ICMS + Substituio tributria
ICMS + Complement of ICMS + IPI
ICMS + Substituio Tributria + IPI
Only IPI

Localization Brazil - VAT Calculation

PURCHASE TO INDUSTRIALIZATION

I. V. A
I0
I1
I2
I3
I4
I5
I6
I7

CALCULATED TAXES

No taxes
Only ICMS
ICMS + Substituio tributria
ICMS + IPI
ICMS + Substituio Tributria + IPI
Only IPI
Only ICMS + IPI ( Resale )

Only ICMS + Substituio Tributria + IPI ( Resale )

Localization Brazil - CFOP

CFOP describes the performed business transaction, from the tax
authorities point of view, and is automatically determinated on the
operations of Invoice Verification (IV) and Billing. Follows the data
required to enable the CFOP determination:
CFOP definition
Purchase/Sale to industrialization
Purchase/Sale to Fixed Asset
Nota Fiscal category
Incoming
Outgoing

Destination category
Same state
Another state
Another country

Localization Brazil - CFOP

Material Category
Communication
Transportation
Electricity
Material

Sale Type
Movement type
Material Usage
Resale

Comsumption
Fixed Asset
Industrialization

Branch Category

Industry
Communication
Electric
Transport
Service
Consumer Industry

Localization Brazil - Accounts Receivable

Payments and collection procedures in Brazil have to follow
the standards defined by the Brazilian Banks Association (Febraban),
which defines the format of the files that have to be sent to the
bank.
An essential element of accounts receivable in Brazil is the
concept of BOLETO, which is the most used way of collecting debts.
For every invoice you bill to the customer, one BOLETO will be
generated. The BOLETO is printed and sent to the customer usually
by the bank. The company is going to generate and send a file to the
bank, and the bank is the one who will process the collection services.
Brazilian requirements for bank interface are supported by
printing programs RFFOBR_A (if bank prints the "boleto"), and
RFFOBR_D (if the company prints the "boleto). Both programs
generate Bill of Exchange Request, and also the files in the standard
Brazilian format, named CNAB. The bank interface also requires
configuration in some transactions realted to Electronic Bank
Statement, once the complete process includes the bank sending back
to you a file with information related to payment and confirmation.

Localization Brazil - Accounts Payable

The Localization Brazil supports payments in local currency via

the following methods:

CREDITO EM CONTA CORRENTE (Wire transfer)

CHEQUE PAGAMENTO (Check)
DOC/TED (Payment order)
BOLETO

Localization Brazil - Legal Books and Files

Legal Books and Files required are:
Livro Razo (Journal)
Arquivo Magntico ICMS 75/96 (File as per law ICMS)
DIRF and DIPI (Withholding tax and IPI Files)
Registro de Controle da Produo e do Estoque (Overview of Production
and Inventory)
Registro de Apurao do IPI (Directory for calculation IPI tax)
Registro de Apurao do ICMS (Directory for calculation ICMS tax)
Lista de Operaes Interestaduais (List of interstate goods movement)
Registro de Entradas (List of incoming documents)

Registro de Sadas (List of outgoing documents)

Registro de Apurao do ISS (ISS Calculation)
Registro de Inventrio Modelo 7 (Phisical Inventory Overview)
Instruo Normativa 68 (IN68 File)

Localization Brazil

Brazil company code creation

The Brazilian company codes need to be created as a copy of

SAP standard company code for Brazil: BR01.

To have all the taxes correctly considered one must configure not
only the Financial module (FI), but also the Billing (SD) and Material
Managemnt (MM) modules.

Localization Brazil Product Costs

Legal Requirements:
Recharge costs center to production orders (STD x Actual).
All inventory materialls are valuated by moving avarage price at
the end of period.
Process executed by the end of period centralized.
Problems:
Balance on the Productive Cost Centers

Balance on the accounts on stock variance

Localization Brazil Product Costs

The average costs calculated during the month, based on inventory

inflows and outflows, and on the product costs, should be posted by
the end of the month to inventory and Cost of Goods Sold (COGS).
SAP R/3 solution:
Starting on release 4.6c, to enable the usage of Moving Average
Price, it is necessary to activate the Material Ledger.
Having Material Ledger activated, the cost will be posted as
Standard, and the Moving Average Cost is calculated in parallel as a
PRD (Price Difference).

By the month-end-closing, the Moving Average Cost are allocated to

Inventory and to Cost of Goods Sold.