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Tax Engine (Thomson Reuters | Customization Steps)

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Corporations using SAP as their Enterprise Resource Planning (ERP) system can simplify their worldwide Indirect Tax requirements by implementing third-party solutions. Some features can include Tax Determination, Integration for SAP, Reporting, and Compliance.

Thomson Reuters | OneSource (Global Next / IDT Indirect Determination Tax)

The Brazil tax calculation logic is notably complex with many calculations and configuration requirements. It is a challenge to implement even by the most experienced and requires a lot of adjustments and configurations that are specific to your company requirements, customers, products, business models, and reporting needs.

The benefits provided by OneSource Indirect Tax Suite are:

  • Fast, accurate sales, use, consumer’s use tax, and VAT results.
  • Monthly tax rate and rules updates for over 175 countries.
  • Integrated tax calculation with SAP minimizing user decisions and tax errors.
  • Removal of the need to change SAP tax codes each time a rate/rule changes, eliminating business interruptions, and running out of tax codes in SAP.
  • Complete audit database from which you can generate both standard and custom reports as well as returns.

Limitations of the third-party solution (OneSource)

  • Solution doesn’t include Nota Fiscal creation (Only Tax Determination). Nota Fiscal feature needs to be enabled by SAP TAXBRA standard solution.
  • Withholding Taxes Outbound for Sale of Services.
  • Withholding Taxes Inbound for Purchase of Services (Solution developed in July 2023).

Settings to support Brazil enablement

FI configuration

  1. Creating New Brazil Condition Types for FI
  2. Creating the Tax Procedure
  3. Defining Tax Codes for Sales and Purchases
  4. Jurisdiction Code Settings
  5. Adding the Required Tax Regions

* This step is called “FI Configuration” because the transactions are located in the IMG financial tree like other global VAT tax configuration, but in Brazil it is done by logistics consultants, not financial consultants.

SD configuration

  1. Creating New Brazil Condition Types for SD
  2. Creating the Pricing Procedure
  3. Assigning the New Pricing Procedure to Sales Transactions
  4. Define Tax Determination Rules
  5. Define Tax Relevance of Customer Master Records

MM configuration

  1. Creating New Condition Types
  2. Creating a Calculation Schema
  3. Assigning the New Calculation Schema to Purchase Transactions

Master data setup

  1. Assign Tax Indicator in the Material Master Sales Organization View
  2. Maintain Default Values for Tax Codes
  3. Maintain Commodity Code
  4. Assign Tax indicator in the Customer Master
  5. Maintain Condition Type to Determine Tax Code

Global Next (OneSource) configuration

  1. Maintain Determine Condition Types for Taxes Table
  2. Brazil Registration Number Requirements and Other Field Mapping
  3. Class /IDT/BRAZIL_MATERIAL_USAGE
  4. Class /IDT/BRAZIL_FED_REG_NUMBER
  5. Commodity Code Map in Field Mapping Table

Nota fiscal support configuration

  1. J1BTAX Settings
  2. Other Configuration Settings (SPRO)
  3. New Brazil Route /IDT/ROUTE_GROUP_DELIVERY
  4. New Brazil Auto Journey
  5. /IDT/JOURNEY_BRAZIL_SD_ADJUST
  6. Dynamic CST Determination for MM
  7. CST Determination for SD
  8. Tax Jurisdiction Codes for Brazil Nota Fiscal
  9. Field Mappings for Inbound STO Process