MM: Display Tax Conditions in Purchase Order for Brazilian Companies

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1 MM: Display Tax Conditions in Purchase Order for Brazilian Companies Applies to: This solution could be applied for release 4.6 and higher. The documents was created using ECC 6.0 For more information, visit the Enterprise Resource Planning homepage Summary Before the OSS note provided by SAP in 2011, was not possible to show the Brazilian tax conditions in the tab Conditions in the PO without a custom program/formula. With this note now is possible to bring the Brazilian taxes to tab Conditions and also it helps to solve another problem for Brazil, to print the tax values in the standard PO form, once in Brazil is common to have the price of goods/products negotiated with ICMS amount included. Author: Carlos Moçatto Company: CWM Consultoria em Informática Ltda. Created on: 3 June 2011 Author Bio Carlos Moçatto, is currently working on CWM Consultancy company, associated with working with SAP Solutions since year 2000 as certified consultant, also is Certified SAP Instructor, giving SAP trainings in Brazil, specialized in Brazilian taxes on Logistic area, he also is MBA, in Logistics SAP AG 1

2 Table of Contents Aim of this document... 3 Short overview about Brazilian taxes... 3 ICMS... 3 IPI... 3 Complemento de ICMS... 4 Substituição Tributária... 4 Required setting on SAP to Print Tax condtions out in the PO Form Adding Formulas to Tax Calculation Procedure... 6 Creation of Condition Types for Taxes in Purchase Pricing... 7 Adding Formulas to Pricing Calculation Procedure Mapping Between Tax Condition Types and Pricing Condition Types Displaying Tax Values in PO Related Content Disclaimer and Liability Notice SAP AG 2

3 Aim of this document This document intent to show an alternative way to have the Brazilian taxes displayed in the tab Conditions on the PO, making the analysis for the Buyer a little bit easier, once tax procedure TAXBRA has a lot of levels and conditions that could make the analysis of the Tax amount quite difficult for beginners. The aim of the SAP not is initially to show tax conditions in the tab Conditions, but we will extend this solution showing how to print tax values in the standard PO form, without a development to change the PO printout. Short overview about Brazilian taxes Different from other markets, Brazilian companies usually negotiates its goods/products with the *ICMS included in the price. There is many taxes involved in one procurement process: Direct taxes (Withholding taxes): Withholding taxes are considered direct taxes on purchasing, for a regular procurement process of services treated in the LC116 we have: PIS Program for Social Integration (Federal tax) COFINS Social Contribution (Federal tax) CSLL IR ISS Social Contribution (Federal tax) Withholding tax for certain services to be withheld from legal persons City tax on services. this document show how to print the Indirect taxes on PO form. Indirect taxes: ICMS Imposto sobre Circulação de Mercadorias e Serviços Brazilian state tax on the circulation of goods and services. Influencing factors on the ICMS rate are: - state of origin and state of destination of the goods - if the customer is subject or not to ICMS IPI Imposto sobre Produtos Industrializados Brazilian federal tax on industrial goods; IPI is charged per product and calculated on the basis of the value of the good including ICMS. The tax rate due depends on the NBM code, which is a Brazilian classification of products, and the origin of the product (domestic/imported). Some companies are exempt from IPI (e.g. some governmentowned companies). Influencing factors on the IPI rate are: - type of operation (CFOP) - for example, export, stock transfers... - product classification (NBM code) - a classification of goods issued by the Brazilian government - if the customer or vendor is subject or not to IPI - usage of the goods (consumption or production) 2011 SAP AG 3

4 Complemento de ICMS ICMS complement a special form of ICMS which is due if a company buys a product in another state of Brazil and if the product is used for consumption. The ICMS complement is calculated as the difference between the ICMS rate charged by the vendor s state and the ICMS rate applicable within the customer s state. Substituição Tributária In Brazil, certain materials are subject to substituição tributária. This means that the fiscal authorities transfer the right to collect taxes to the producer or distributor of the goods, called the substituto tributário. He pays the tax, including tax on the presumed resale surcharge, and collects it from the reseller who buys the goods. When re-selling the goods, the buyer can charge the tax on the surcharge to the original price. The Substituicao tributaria can also influence the CFOP SAP AG 4

5 Required setting on SAP to Print Tax condtions out in the PO Form. 1) Note implementation First step is to apply the OSS note , to create new objects on SAP. In the OSS note, you will find an attachment that shows all required steps to create File: (1)_Creation_of_New_Objects.pdf 2) Customizing settings 2.1) Create new formulas to read values on TAXBRA and another to recover the tax values as results of this reading. Tcode: VOFM *Step to be done for a Developer. Double click in the formula 959, and insert the code: FORM FRM_KONDI_WERT_959. INCLUDE J_1B_FORM_WRITE_TO_MEMORY. ENDFORM. Double click in the formula 960, and insert the code: FORM FRM_KONDI_WERT_960. INCLUDE J_1B_FORM_READ_FROM_MEMORY. ENDFORM Save and activate formulas 2011 SAP AG 5

6 Adding Formulas to Tax Calculation Procedure 1. tcode: J1BTAX. 2. In the menu, go to Condition setup Calc. Procedures Calc. Procedures MM. 3. In the Procedures group box, select the line with your tax calculation procedure. 4. In the Dialog Structure group box, double-click Control Data to open the overview of your tax calculation procedure. 5. For each tax condition type that you want to carry over to the pricing calculation schema, enter the corresponding formula number for the tax calculation procedure in the CalType column. In our example (see the following figure), 959 is entered as the formula, so that the values for the IPI1 and ICM1 tax conditions appear in pricing: Set the formula 959 for all Tax Codes Conditions you want to print in the PO form. ` 2011 SAP AG 6

7 **Keep in mind that which conditions should be selected is a decision of the company. After set the formula in each Tax Code Condition, we have to create the equivalent condition types in MM application. Creation of Condition Types for Taxes in Purchase Pricing To enable the system to display the tax values in purchase pricing, you have to create new conditions that correspond to the tax conditions that are to be used for pricing. Note: The name of the pricing condition type does not have to match the name of the tax condition type. The mapping between the two condition types is done in a database table, which is described in the following documentation. 1. tcode: SPRO. 2. In the SAP Customizing Implementation Guide (IMG), choose Materials Management Purchasing Conditions Define Price Determination Process Define Condition Types. 3. In the Choose Activity dialog box, double-click Define Condition Type. 4. Create a new entry for each condition type that should be carried over from tax calculation. Or invoke tcode M/06 5. Enter the following values for each condition type: For each single condition type you entered the formula in Tax procedure TAXBRA you have to create the equivalent condition type here and name it In the way you want to see in the PO form SAP AG 7

8 Settings for the condition types: Use the same settings for all conditions SAP AG 8

9 We also entered a translation to PT for each condition, if your logon language is PT. ICM1 English ICMS Industr. In(PO) ICMS Industr. In(PO) ICM2 English ICMS Consump.In(PO) ICMS Consump.In(PO) ICOF English COFINS deductible-po COFINS deductible-po ICON English COFINS Non Deduct. COFINS Ñ.Dedut. (PO) ICS1 English Sub.Tributaria In-PO Sub.Tributaria In-PO ICSF English COFINS Normal Tax COFINS Indust.In(PO) IPI1 English IPI Industr. in(po) IPI Industr. in(po) IPI2 English IPI Consumpt.In (PO) IPI Consumpt.In (PO) IPIS English PIS deductible - PO PIS deductible PO IPSF English PIS Normal Tax PIS Industr. in(po) IPSN English PIS Non Deductib. PIS Ñ.Dedut. (PO) ***The condition activated within the tax code that will determine the text in PT or EN that will be printed in the PO form, we will see it later on on this document SAP AG 9

10 Adding Formulas to Pricing Calculation Procedure 1. tcode SPRO. 2. In the SAP Customizing Implementation Guide (IMG), choose Materials Management Purchasing Conditions Define Price Determination Process Define Calculation Schema. 3. In the Schemas group box, select the line with your pricing calculation procedure. 4. In the Dialog Structure group box, double-click Control Data to open the overview of your pricing calculation procedure. Or invoke tcode M/08 5. Add a new entry for each tax condition type with the following values (Note that you must leave the columns that are not mentioned here empty): Select the calculation schema for MM that will be used in your implementation, if you have more, do the same for all used in you company, for local purchasing. Add in the end of the pricing schema the new entries, entering also the formula 960 to read and recover the data calculated in TAXBRA. 1) Set the flag in the field PRINT, to standard program used in the PO form to read and print each tax code condition activated into the tax code used in the item level in the PO. 2) Formula 960 that will retrieve data calculated for the Brazilian Tax procedure TAXBRA SAP AG 10

11 Mapping Between Tax Condition Types and Pricing Condition Types 1. Invoke tcode SM Enter J_1B_PO_TAX_MAPV as the view name. 3. Switch to edit mode and choose New Entries. 4. Now you can determine on which pricing condition type a specific tax condition type should be mapped: a. On the left side, select the pricing condition type using the F4-Help for the Condition Type field. The Application field is automatically set to M. b. On the right side, select the tax condition type using F4-Help for the Condition Type field. The Application field is automatically set to TX. For each condition map the correspondent one. This step will make SAP to transfer the value form TAXBRA to MM Calculation schema SAP AG 11

12 Displaying Tax Values in PO. Tcode ME21N: Tax code used is I1- In.Indust: No IPI -w/icms+pis+cofins Recoverable For this tax code there is no IPI, but the ICMS + PIS + COFINS recoverable are flagged on into the tax code configuration, it means that considering the regular scenario in the tab Condition we will see these taxes displayed with value. And in the PO printout we have those printed SAP AG 12

13 To check the values, return to tab Invoice and hit button [Taxes] Go down till you find the tax code conditions in TAXBRA and compare values. Do this for each line item you have in the PO SAP AG 13

14 Check PO form/printout Related Content All settings was taken from the OSS note provided by SAP and performed small adjustments to use the standard functionality of PO printout SAP AG 14

15 Disclaimer and Liability Notice This document may discuss sample coding or other information that does not include SAP official interfaces and therefore is not supported by SAP. Changes made based on this information are not supported and can be overwritten during an upgrade. SAP will not be held liable for any damages caused by using or misusing the information, code or methods suggested in this document, and anyone using these methods does so at his/her own risk. SAP offers no guarantees and assumes no responsibility or liability of any type with respect to the content of this technical article or code sample, including any liability resulting from incompatibility between the content within this document and the materials and services offered by SAP. You agree that you will not hold, or seek to hold, SAP responsible or liable with respect to the content of this document SAP AG 15