Brazil Specific Consideration in Finance

[Former Member]

Introduction

The brazil statutory and legal requirements poses certain unique requirements, the same has been covered in the document alongwith ways in which such scenarios can be attended in SAP.

FI – Organisation Structure

Business Place – Each Company code in Brazil is assigned to a Business Place which is further mapped to Plant. Creation of Business Place is mandatory as taxes are reported Business Place wise.

FI – Accounts Payable Process

Accounts Payable Process Overview

The AP process starts with GR/IR verification, in Brazil a document called Nota Fiscal is issues along with goods which contains the tax and other details. For invoices with PO, accounting document which is generated contains tax and other legal details from the Notas Fiscal. For Invoices without PO, these details have to be manually entered.

Automatic Payment Method is used for making payment to Vendors. On running the payment program a file is sent o bank for payment which is processed by bank and the payment is made. Brazil specific payment methods like Boleto, and requisite settings for the same need to be in place.

Brazil Specific Considerations

• Banking Instruction Codes and Communication with bank - Boleto Bancário; Borderô; Duplicata; Vendor Operation; SPB (Sistema de Pagamento Brasileiro).
• Payment Methods, Conditions and Types need to be set up – for payment method Boleto scanner and requisite setting needs to be in place.

FI – Withholding Taxes Classification

Witholding Tax Process Overview

On financial front, the tax laws at country and state level for Brazil are manifold.  To name a few, we have

• IPI - Federal tax on industrialized products
• ICMS - State tax on goods movements
• ISS - Service tax on city level
• PIS, Coffins, CSLL - social contributions
• IRRF, INSS - withholding taxes

SAP supports all these tax types, automatic calculation based on predefined rules which are aligned with tax laws, by setting up tax rates with integration of material management, FI tax codes, and vendor/customer master data. Few specific codes like NBM, CFOP also should be managed to ensure correct determination of tax category (product/service) and tax level (federal or state level), tax type (IPI, ICMS) and finally the rates.

Brazil Specific Considerations

• Use of specific fields on Vendor/Customer master data (tax identifications: CNPJ, CPF, State Inscription, City Inscription, Tax classification, type of business) for tax purposes.
• Setup Tax conditions, codes and rates - TAXBRA reflects new standard solution for Tax Pricing Procedure using Condition Base Technique (CBT).

FI – Accounts Receivable Process

Accounts Receivable Process Overview

On making sale a sale alongwith invoice, in Brazil a document called Nota Fiscal is issues along with goods which contains the tax and other details

Brazil Specific Considerations

• Nota Fiscal - Under Brazilian law, the NF-e is replacing the conventional, hard-copy nota fiscals with an electronic counterpart which must be digitally signed and shaped into a particular government specified XML format. We also need to set up CFOP code, and NBM code for determination of NF based on direction of goods movement, usage of materials, branch office, master data set up, and put necessary configurations for automatic NF generation.
• For AR formats to be used DME: Remittance file (arquivo remessa); confirmation file (arquivo retorno); bank statement (arquivo extrato); Febraban (Segment , P,Q,T,U); Itaú (CNAB400); Bradesco (Layout Cobrança Bradesco 400), Borderô printing (list of payments); Boleto printing (payment form)

FI – Asset Accounting Process

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Asset Accounting Process Overview

At first the chat of depreciation needs to be set up and mapped with asset class. Asset acquisition may be with or without purchase order. Periodically depreciation run will be made to post the amount of depreciation to GL. Also in Brazil depreciation amount for tax purposes may differ and needs to be separately calculated.

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Brazil Specific Considerations

• Country specific chart of depreciation needs to be created.
• Tax incentive on asset investments (CIAP)

This document was co-authored by SCN member varun harlalka