faq%3a pis_cofins for resale purchases

FAQ: PIS/COFINS for Resale Purchases

This article seeks to provide an overview on the purchases for resale involving PIS and COFINS in Brazil in a Q&A format.


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TABLE OF CONTENTS

VALIDITY .......................................................................................................................................................... 3

SCOPE .............................................................................................................................................................. 3

PRE-REQUISITES ............................................................................................................................................ 3

FAQ ................................................................................................................................................................... 4

1. Which are the resale scenarios currently covered by the system? ........................................... 4 Scenario I: Normal resale .................................................................................................................................. 4 Scenario II: Industry resale ................................................................................................................................ 4 2. Which SAP notes should be used for each resale scenario? ..................................................... 4 Scenario I: Normal resale .................................................................................................................................. 4 Scenario II: Industry resale ................................................................................................................................ 4 3. How should the tax code look like for each scenario? ................................................................ 5 Scenario I: Normal resale .................................................................................................................................. 5 Scenario II: Industry resale ................................................................................................................................ 7 4. When should the 'IPI Contributor' flag be turned on in the Branch/Filial? ................................ 7 5. What´s the function of ICOR / PCRE condition types? ................................................................ 8 6. How does including PIS/COFINS in the net price influence the tax? ......................................... 8 7. Why for Scenario I the Accounting document postings for PIS/COFINS don´t match the PIS/COFINS values in the Nota Fiscal tax item detail? ................................................................................ 8 Background: ....................................................................................................................................................... 8 8. My company´s scenario is not covered by the available solutions or my company is not satisfied with the system logic. How to proceed? ....................................................................................... 9


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Several different scenarios are possible regarding the calculation and posting of PIS and COFINS

taxes on resale purchases. Each scenario depends both on the nature of the operation and the

nature of the involved companies, from a fiscal perspective, i.e. To cover all possible approaches,

SAP notes 947218, 1063650 and 1088901 have been delivered. However, their correct usage is

sometimes not clear. Taking that into account, this paper seeks to provide an overview on the

available solution and help you understand the involved concepts, as well as choosing the right

customizing.

VALIDITY

SAP ERP (All releases)

SCOPE

Important: this SAP paper aims to help customers and consultants to understand the scope of the solution. It does not intend to provide reference for legal interpretation. Any disagreements must be punctually discussed with the involved companies’ legal division and if needed, also ASUG. See question 8.

PRE-REQUISITES

SAP note 947218 must be applied.

https://service.sap.com/sap/support/notes/947218





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FAQ

Below follows a set of Frequently Asked Questions and their corresponding answers

1. Which are the resale scenarios currently covered by the system?

Scenario I: Normal resale

In this scenario, the following aspects characterize the process:

The buying Branch is not an IPI Contributor and the material usage is resale.

The goods are bought to be later resold. The IPI is not credited and PIS/COFINS credit values have to be adjusted into the accounting posting.

Scenario II: Industry resale

In this scenario, the following aspects characterize the process:

The buying Branch is an IPI Contributor and the material usage is resale.

Although the usage is resale, the goods are used for industrialization. In this case, the whole process goes on as a normal industrialization purchase.

2. Which SAP notes should be used for each resale scenario?


Code + customizing from SAP note 947218, plus subsequent coding corrections to this SAP note (can be found in http://service.sap.com/notes)


Code + customizing from SAP notes 947218, 1063650, 1088901, plus subsequent coding corrections to these SAP notes (can be found in http://service.sap.com/notes)


http://service.sap.com/notes




http://service.sap.com/notes


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3. How should the tax code look like for each scenario?

To obtain the tax postings in the Nota Fiscal and Accounting Document according to each of the scenarios, specific sets of configuration must be made.

Basically, the whole control is made through the tax code condition types.

To activate them, there are two ways, depending on your system release:

Up to 4.6C: transaction FTXP or the following IMG path:

4.70 and up: table/view J_1BTAXCODEV or transaction J1BTAX

The relevant condition types that need to be activated for each resale scenario are described below (according to the used Tax Calculation Procedure):


Tax Calculation Procedure

Acti

ve C

on

dit

ion

Typ

es

TAXBRA TAXBRJ

ICM1 ICM1

IPI2 IPI2

IPIS IPSV

IPSV IPSS

IPSS IPSU

IPSU IPSA

IPSA ICOV

ICOF ICOS


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ICOV ICOU

ICOS ICOA

ICOU PCRE

ICOA

ICOR

Important: Additional conditions may be turned on/off according to the business scenario (e.g. Substituição Tributária, Withholding Taxes, etc...)


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Tax Calculation Procedure

Acti

ve C

on

dit

ion

Ty

pes

TAXBRA TAXBRJ

ICM1 Important: This scenario is not supported for TAXBRJ, although you can at your own risk adapt the solution from SAP Notes 1063650 + 1088901 IPI1

IPSF

IPSG

IPSH

ICSF

ICOG

ICOH

Important: Additional conditions may be turned on/off according to the business scenario (e.g. Substituição Tributária, Withholding Taxes, etc...)

4. When should the 'IPI Contributor' flag be turned on in the Branch/Filial?

This flag should only be set for Scenario II: Industry Resale.

To activate it, navigate to the following IMG path:

Inside the branch details, you´ll find the flag:




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5. What´s the function of ICOR / PCRE condition types?

The purpose of these condition types is offsetting the material cost for Scenario I: Normal Resale.

ICOR is used in TAXBRA

PCRE is used in TAXBRJ

For more details about offsetting of PIS and COFINS, see Question 7.

6. How does including PIS/COFINS in the net price influence the tax?

As of the implementation of SAP note 747607, where the solution for MP-135/LC-116 requirements1 was

delivered, it became possible to define certain taxes as included or not in the purchasing/sales net price. This is done by customizing entries in table/view J_1BKON1V.

Specifically for PIS and COFINS, the system will handle the formulas for each case automatically, independently of setting these taxes as included or not in the net price.

Important: To ensure consistency while calculating taxes, however, the user must inform the right net price in order to achieve the expected values both in the Nota Fiscal and in the Accounting document.

7. Why for Scenario I the Accounting document postings for PIS/COFINS don´t match the PIS/COFINS values in the Nota Fiscal tax item detail?

Because the vendor calculates taxes based on his selling operation, in which IPI has to be paid to the government. On the buyer´s side (SAP system), though, IPI is not credited so it must be considered to recompose the PIS/COFINS base.

Thus, in the Accounting document, the PIS/COFINS value is calculated over a base with IPI, whereas the physical document (represented in MIRO) has PIS/COFINS calculated over a base without IPI.

Background:

Particularly for Scenario I, there is a difference tax treatment between selling and buying a product. When it comes to PIS/COFINS, and IPI is involved, what will determine the PIS/COFINS base is the goods usage.

On one side of the process chain, from the vendor perspective, as the IPI is due to be paid, given that the fato gerador has occurred, then it cannot be considered a part of the cost and so it is not part of "Valor dos Produtos". With this, IPI is really not included in PIS/COFINS base for the sale.

On the other side of the process chain, the buyer’s perspective is different. In case of resale usage for a non-IPI Contributor, IPI cannot be credited, as long as the purchased goods will not be industrialized, but resold. Due to that, in the inbound step of the process, the IPI is considered to be a "cost", and costs are part of the "Valor dos Produtos ". Being that so, IPI must be part of PIS/COFINS base too.

As a consequence of this base recomposition for the PIS and COFINS base, the PIS and COFINS values will be slightly higher on the Accounting Document when compared to the Nota Fiscal. To offset this

1 For more details on this solution, check SAP Note 852302




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difference and allow the document to be posted in spite of the Nota Fiscal x Accounting Document balance, the system uses the value of the condition type ICOR (TAXBRA) or PCRE (TAXBRJ). These conditions will calculate the difference between the PIS + COFINS from the physical Nota Fiscal (without IPI) and the PIS + COFINS actually due (with IPI). Such difference will increase the material cost, which was (correctly) under valuated during the Goods Receipt (due to the pricing condition NAVS in the PO).

8. My company´s scenario is not covered by the available solutions or my company is not satisfied with the system logic. How to proceed?

As already outlined in the Scope section of this paper, we don´t intend to provide reference for legal interpretation. Instead, our objective is to put relevant information together and allow an easier understanding of the available solutions for resale purchases in Brazilian Localization involving PIS and COFINS.

So, either in case the business scenario is more complex than the available solutions, or your company´s legal interpretation of the legislation differs from the solution logic delivered by SAP, please get in touch with any user’s community of your preference (e.g. ASUG) or your local SAP Representative, so that relevant points be raised for discussion, evaluated and eventually embedded into the system.

Also consider making formal consultations with Receita Federal do Brasil before enforcing changes into the system.

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