Customizing ISS PIS COFINS For Classic

Customizing Guide:
New Taxes 2004 (ISS, PIS, COFINS,

MP-135 Withholding Taxes)
– For Classic (Non-Condition-Based) Tax

Calculation –
Customizing Guide: New Taxes 2004, Classic Tax Calculation
Content
1 Purpose of This Guide............................................................................................... 3
2 Create Condition Types............................................................................................. 3
2.1 Condition Types For Application TX..........................................................................3
2.2 Condition Types For Application V.............................................................................4
3 Price Conditions Including Taxes...............................................................................5
3.1 Price Conditions SD................................................................................................... 5
3.2 Price Conditions MM.................................................................................................. 6
3.3 Define Which Taxes Are Included in MM/SD Price Conditions.................................6
4 Create Entries in J_1BAJ........................................................................................... 6
5 Create Processing Keys for FI (T007B).....................................................................7
6 Create G/L Accounts................................................................................................. 7
7 Define and Assign Tax Accounts...............................................................................8
8 Define Account Keys for SD (T687)...........................................................................8
9 Update Calculation Procedures.................................................................................8
9.1 Update Calculation Procedure FI...............................................................................8
9.2 Update Pricing Procedure SD..................................................................................10
10 Customizing of Extended WHT................................................................................11
10.1 WHT Types at Payment.........................................................................................11
10.2 WHT Types at Invoice............................................................................................ 12
10.3 WHT Codes........................................................................................................... 12
10.4 Define Processing Key For Modified Tax Amount.................................................12
10.5 Assign WHT Types to Company Codes.................................................................12
10.6 Define Accounts For Withholding Tax to Be Paid Over..........................................12
10.7 Define Official Collection Codes............................................................................12
10.8 Assign Condition Types to Withholding Tax Types................................................12
10.9 Maintain Tax Relevant Classification.....................................................................13
10.10 Maintain Withholding Tax SD Conditions..........................................................13
11 FI Tax Codes........................................................................................................... 13
11.1 Tax Codes Used in MM......................................................................................... 13
12 SD Tax Codes (View J_1BTXSDCV).......................................................................14
13 Maintain Settings For External Tax Calculation.......................................................14
13.1 Structure for Tax Jurisdiction Code (View V_TTXD)..............................................14
13.2 Activate External Tax Calculation..........................................................................14
13.3 Define Logical Destination.....................................................................................14
14 Define Tax Jurisdiction Codes.................................................................................14
15 Assign Jurisdiction Codes to Ranges of Postal Codes............................................15
16 Master Data Changes..............................................................................................15
16.1 Vendors (Transaction XK02)..................................................................................15
16.2 Customers (Transaction XD02).............................................................................15
16.3 Other Address Changes: Organizational Structure................................................15
17 ISS Customizing...................................................................................................... 15
17.1 Tax Laws............................................................................................................... 15
17.2 Official Service Types............................................................................................15
17.3 Generic Service Types........................................................................................... 15
17.4 Assign Official Service Types................................................................................15
18 Tax Rates................................................................................................................ 16
18.1 COFINS................................................................................................................. 16
18.2 PIS......................................................................................................................... 16
18.3 ISS......................................................................................................................... 16
18.4 Withholding Taxes................................................................................................. 16
Page 2 of 16
1 Purpose of This Guide

The purpose of this guide is to describe how to technically set up the system for the new tax
functions (ISS, PIS, COFINS, and MP-135 withholding taxes). The prerequisite is that all
coding and DDIC changes are already implemented. This means, either the support package
that contains the changes is installed, or the changes are implemented manually, following
the instructions of the respective Note. For further details, see Note 727475 and the Notes
mentioned there.
After implementation of the support package or the Note, there are still manual steps
necessary to work with the new taxes. These manual steps are described in this guide. It may
be that the changes described in some of the steps are already done in your system (e.g.
entries in table J_1BAJ). In such case, just skip the section.
2 Create Condition Types

New condition types have to be created for the new taxes. The following classes of condition
types are affected:
 Tax code conditions (activation of taxes)
 Conditions with WHT codes (specific for SD)
2.1 Condition Types For Application TX

2.1.1 Tax Code Conditions
Cond. Class: D (Taxes)
Calculat. Type: A (Percentage)
Cond. Category: 1 (Jur. Level 1)
Access Seq.: MWST
Manual Entries: D (Not possible to process manually)
Item Condition: X
Delete fr. DB: B (without popup)
Cond. Type Description

ICN3 COFINS Normal Tax
ICOA COFINS Normal PO/GR
ICON COFINS Normal Tax
ICOO COFINS Offset Tax Included
ICOS COFINS Normal PO/GR
ICOU COFINS COFINS Normal IV NVV
ICOV COFINS Offset ICOS/ICOU
ICOW COFINS WHT
ICOZ COFINS WHT Offset
ICSW CSLL WHT
ICSZ CSLL WHT Offset
ICW3 COFINS Withholding TaxSD
ICZ3 COFINS WHT SD Offset
IGEW General WHT
IGEZ General WHT Offset
IGW3 General WHT SD
IGZ3 General WHT SD Offset
IIRW IR WHT
IIRZ IR WHT Offset
IPS3 PIS Normal Tax
IPSA PIS Normal PO/GR
IPSN PIS Normal Tax
IPSO PIS Offset Tax Included
IPSS PIS Normal PO/GR
IPSU PIS Normal IV NVV
IPSV PIS Offset IPSS / IPSU
Page 3 of 16

IPSW PIS WHT
IPSZ PIS WHT Offset
IPW3 PIS WHT SD
IPZ3 PIS WHT SD Offset
IRW3 IR Withholding TaxSD
IRZ3 IR WHT SD Offset
ISA3 ISS at Provider SD
ISB3 ISS WHT at Provider SD
ISE3 ISS at Service Loc SD
ISF3 ISS WHT at Service Loc SD
ISSA ISS at Provider
ISSB ISS WHT at Provider
ISSE ISS at Service Loc
ISSF ISS WHT at Service Loc
ISSG ISS Offset
ISW3 CSLL Withholding Tax SD
ISZ3 CSLL WHT SD Offset
2.2 Condition Types For Application V

2.2.1 Tax Code Conditions
Access Seq.: MWST
Item Condition: X
Tax Type Description

ICN3 COFINS from SD
ICW3 COFINS Withholding TaxSD
IGW3 General WHT SD
IPS3 PIS Normal Tax
IPW3 PIS WHT SD
IRW3 IR Withholding TaxSD
ISA3 ISS at Provider SD
ISB3 ISS WHT at Provider SD
ISE3 ISS at Service Loc SD
ISF3 ISS WHT at Service Loc SD
ISW3 CSLL Withholding Tax SD

Access Seq.: IBRR
Item Condition: X
Ref. Con. Type: ICMO
Ref. Applicat.: V

ICZ3 COFINS WHT SD Offset
IGZ3 General WHT SD Offset
IPZ3 PIS WHT SD Offset
IRZ3 IR WHT SD Offset
ISZ3 CSLL WHT SD Offset
Page 4 of 16
Cond. Class: A (Discount or surcharge)

Cond. Category:
Access Seq.: IBRR
Item Condition: X
Ref. Con. Type: ICMO
Ref. Applicat.: V

ICO2 COFINS Offset SD
IPS2 PIS Offset SD
2.2.2 WHT Code Conditions

Cond. Class: W (Wage Withholding Tax)
Cond. Category: D (Tax)
Access Seq.: J1AG (Arg.: Tax Relev. Clas)
Item Condition: X

ICW4 COFINS WHT code
IPW4 PIS WHT code
ISW4 CSLL WHT code
IRW4 IR WHT code
IGW4 General WHT code
3 Price Conditions Including Taxes

The new solution for tax calculation supports prices which are not the real net prices, but may
contain PIS, COFINS, ISS due at the municipio of the service provider, ISS due at the
municipio of the service execution, or any combination of these.
In order to allow the system to consider correctly which taxes are already included in a price
and which not, corresponding price conditions should be maintained. It is possible to either
continue using existing price conditions or introduce new ones. Of course, if new price
conditions are introduced, all price conditions must be updated.
The following is a suggestion based on 4 new price conditions.
3.1 Price Conditions SD

Copy pricing procedure PR0000 to RVXBR2 before creating the conditions.
Cond. Class: B (Prices)
Calculat. Type: C (Quantity)
Cond. Category: H (Basic Price)
Access Seq.: PR00
Manual Entries: C (Manual entry has priority)
Amount/percent: X
Item Condition: X
Pricing Proc: RVXBR2
Delete fr. DB: (do not delete)
Scale basis: C
Check value: A
Quantity Conversion: X

ZPB0 Price w/o Taxes
ZPB1 Price+ISS
ZPB2 Price+PIS+COF
Page 5 of 16
ZPB3 Price+ISS+PIS+COF
3.2 Price Conditions MM

If necessary, create new price conditions and adapt the MM pricing procedure for Purchase
Orders (e.g. RM0000) or create new ones by copying and modifying.
3.3 Define Which Taxes Are Included in MM/SD Price

Conditions
Views J_1BSDKON1MMVV and J_1BSDKON1SDVV.
Maintain for each SD (Application V) or MM (Application M) pricing procedure the taxes that
are included in each price condition type. As an example, the SD procedure RVXBRA is
maintained for the conditions ZPB0 … ZPB3
Price Condition Tax Group
ZPB1 ISSP ISS at location of service provider
ZPB1 ISSS ISS at location where service is provided
ZPB2 COFI COFINS
ZPB2 PIS PIS
ZPB3 COFI COFINS
ZPB3 ISSP ISS at location of service provider
ZPB3 ISSS ISS at location where service is provided
ZPB3 PIS PIS
4 Create Entries in J_1BAJ

Tax Type Tax Group Description WHT Offset
ICN3 COFI COFINS Normal Tax
ICOA COFI COFINS Normal PO/GR
ICOF COFI COFINS Deductible
ICON COFI COFINS Normal Tax
ICOO COFI COFINS Offset Tax Included X
ICOS COFI COFINS Normal PO/GR
ICOU COFI COFINS COFINS Normal IV NVV
ICOV COFI COFINSOffset ICOS/ICOU X
ICOW WHCO COFINS WHT X
ICOZ COFINS WHT Offset
ICSW WHCS CSLL WHT X
ICSZ CSLL WHT Offset
ICW3 WHCO COFINS Withholding TaxSD X
IGEW WHT General WHT X
IGEZ General WHT Offset
IGW3 WHT General WHT SD X
IIRW WHIR IR WHT X
IIRZ IR WHT Offset
IPIS PIS PIS Deductible
IPS3 PIS PIS Normal Tax
IPSA PIS PIS Normal PO/GR
IPSN PIS PIS Normal Tax
IPSO PIS PIS Offset Tax Included X
IPSS PIS PIS Normal PO/GR
IPSU PIS PIS Normal IV NVV
IPSV PIS PIS Offset IPSS / IPSU X
IPSW WHPI PIS WHT X
IPSZ PIS WHT Offset
IPW3 WHPI PIS WHT SD X
IRW3 WHIR IR Withholding TaxSD X
Page 6 of 16
Tax Type Tax Group Description WHT Offset

ISA3 ISSP ISS at Provider SD
ISB3 ISSP ISS WHT at Provider SD X
ISE3 ISSS ISS at Service Loc SD
ISF3 ISSS ISS WHT at Service Loc SD X
ISSA ISSP ISS at Provider
ISSB ISSP ISS WHT at Provider X
ISSE ISSS ISS at Service Loc
ISSF ISSS ISS WHT at Service Loc X
ISSG ISSP ISS Offset X
ISW3 WHCS CSLL Withholding Tax SD X
5 Create Processing Keys for FI (T007B)

New processing keys (account keys) have to be created to post taxes to separate accounts
and to identify withholding tax amounts in the normal tax calculation.
Tax Type: 2 (input tax)
Not deductible: X
Posting indicator: 3 (Distribute to relevant expense/revenue items)
Processing Key Description

ISW ISS WHT
WTC COFINS WHT
WTG General WHT
WTI IR WHT
WTP PIS WHT
WTS CSLL WHT
Tax type: 2 (input tax)

Non deductible: space
Posting indicator: 2 (separate line item)

CO3 COFINS Clearing
PI3 PIS Clearing
Tax type: 1 (output tax)

Non deductible: space
Posting indicator: 2 (separate line item)

COF COFINS
PIS PIS
WC3 Cofins WHT
WC4 Cofins WHT offset
WG3 General WHT
WG4 General WHT offset
WI3 IR WHT
WI4 IR WHT offset
WP3 PIS WHT
WP4 PIS WHT offset
WS3 CSLL WHT
WS4 CSLL WHT offset
6 Create G/L Accounts

If you need to post the new taxes to separate accounts, create new G/L accounts. The
following is just a suggestion.
177011: COFINS Withholding Tax Posting at Payment
177013: PIS Withholding Tax Posting at Payment
Page 7 of 16
177020: CSLL Withholding Tax Posting at Payment

177021: IR Withholding Tax Posting at Payment
177022: General Withholding Tax (PIS/COFINS/CSLL/IR)
177030: PIS Normal Tax
177031: COFINS Normal Tax
154031: PIS Tax deductible
154008: COFINS Tax deductible
177040: ISS Withholding Tax
7 Define and Assign Tax Accounts

Posting Keys: 40 – 50
Account Key Account

CO3 154008
COF 177031
PI3 154031
PIS 177030
WC3 177011
WC4 177011
WG3 177022
WG4 177022
WI3 177021
WI4 177021
WP3 177013
WP4 177013
WS3 177020
WS4 177020
8 Define Account Keys for SD (T687)

Account Key Description
COF COFINS
PIS PIS
WC3 Cofins WHT
WC4 Cofins WHT offset
WG3 General WHT
WG4 General WHT offset
WI3 IR WHT
WI4 IR WHT offset
WP3 PIS WHT
WP4 PIS WHT offset
WS3 CSLL WHT
WS4 CSLL WHT offset
9 Update Calculation Procedures

9.1 Update Calculation Procedure FI
The FI calculation procedure below is based on SAP sample delivery TAXBRJ. The new
entries are shown in red. Adapt the calculation procedure that you use in a corresponding
way or create a copy of the old one and adapt the new one in order to have a backup.
Step Cntr CTyp Description From To Reqt SubTo Stat AltCTy AltCBV ActKy
100 BASB Base Amount

150 Ext. calculation X 320
200 Level 200 X
210 IPI1 IPI Industr. In 100 521 301 VS1
215 IPIF IPI Industr. In 100 521 301 VS1
230 ICM1 ICMS Industr. In 100 523 303 VS2
231 ICMV ICMS DIFAL Con/Asset 100 523 303 ICD
232 ICMT ICMS Difal Investmen 100 523 303 ICD
Page 8 of 16
233 ICMP ICMS Difal inv. off. 232 ICC
235 ICZG ICMS tax free 100 525 305 NVV
240 ICS1 Sub.Tributaria In 100 524 304 VS3
250 ICMF ICMS S.T. fr. offset 100 525 305 IC1
255 IFR1 ICMS on freight In 100 527 307 VS3
256 IFS1 ICMS ST freight In 100 528 308 VS3
260 IP1C IPI Ind.Clearing 100 521 301 IPC
265 IP1O IPI Ind.Clear.Off. 210 IPC
270 IC1C ICMS Ind.Clearing 100 523 303 ICC
275 IC1O ICMS Ind.Clear.Off. 230 ICC
300 Level 300 X
310 IPI2 IPI Consumption In 100 522 302 NVV
330 ICM2 ICMS Consumption In 100 523 303 NVV
331 ICMD ICMS Consumption In 100 523 303 NAV
340 ICS2 S.T. Consumption In 100 524 304 NVV
350 ICOP ICMS complement 100 525 305 ICP
355 ICOT STO-ICMS complement 100 525 305 ICP
360 ICOX ICMS complement 100 350 ICX
365 ISS2 ISS from MM In 100 526 306 NVV
366 ISSO ISS from MM In Offs 365 VS1
370 ICO1 ICMS compl Transfer 100 160 525 305 ICP
371 ICO2 ICMS compl. Tra. Off 370 160 ICX
372 ICO3 ICMS compl. NVV 100 525 305 ICP
373 ICO4 ICMS compl. NVV off 372 ICX
500 Level 500 X
510 IPI3 IPI from SD Out 100 521 301 MW1
520 ICM3 ICMS from SD Out 100 523 303 MW2
521 ICMM ICMS DIFAL Out 100 523 303 MW2
522 ICML ICMS DIFAL ofset out 521 ICC
530 ICS3 Sub.Tributaria Out 100 524 304 MW3
540 ISS3 ISS from SD Out 100 526 306 MW4
541 ICSO SOCIAL Offset TxIncl 540 MW4
550 ICZF ICMS Rev (Z.F.)-STO 100 525 305 ICZ
560 IFR3 ICMS on freight Out 100 527 307 MW3
570 IFS3 ICMS ST freight Out 100 528 308 MW3
600 ICM4 STO-ICMS SD (ICM3) 100 523 303 MW2
700 Other taxes X
710 INSS INSS Incoming 100 VST
720 INSX INSS offset (100-) 710 INX
750 PIS, COFINS, ISS X
755 ISSA ISS at Provider 100 521 301 NVV
760 ISSB ISS WHT at Provider 100 522 302 ISW
765 ISSE ISS at Serv.Loc. 100 523 303 NVV
770 ISSF ISS WHT at Serv.Loc. 100 524 304 ISW
771 ISA3 ISS at Provider SD 100 521 301 MW4
772 ISB3 ISS WHT at Prov. SD 100 522 302 MW4
773 ISE3 ISS at Serv.Loc. SD 100 523 303 MW4
774 ISF3 ISS WHT Srv.Loc. SD 100 524 304 MW4
775 ISSG ISS Offsets 100 525 305 NVV
780 ICON COFINS NVV 100 821 801 NVV
785 ICOO COFINS NVVOff TxIncl 100 822 802 NVV
790 IPSN PIS NVV 100 823 803 NVV
795 IPSO PIS NVV Off. TxIncl 100 824 804 NVV
797 ICN3 COFINS from SD 100 821 801 COF
798 IPS3 PIS from SD 100 823 803 PIS
800 WITHHOLDING TAXES ON X
GROSS
805 ICOW COFINS WHT 100 825 805 WTC
810 ICOZ COFINS WHT Offset 805 NVV
815 IPSW PIS WHT 100 826 806 WTP
820 IPSZ PIS WHT Offset 815 NVV
825 ICSW CSLL WHT 100 827 807 WTS
830 ICSZ CSLL WHT Offset 825 NVV
835 IIRW IR WHT 100 828 808 WTI
Page 9 of 16
840 IIRZ IR WHT Offset 835 NVV
845 IGEW General WHT 100 829 809 WTG
850 IGEZ General WHT Offset 845 NVV
851 Withholding Tax from SD X
852 ICW3 COFINS WHT SD 100 825 805 WC3
853 ICZ3 COFINS WHT Offset SD 852 WC4
855 IPW3 PIS WHT SD 100 826 806 WP3
856 IPZ3 PIS WHT Offset SD 855 WP4
858 ISW3 CSLL WHT SD 100 827 807 WS3
859 ISZ3 CSLL WHT Offset SD 858 WS4
860 IRW3 IR WHT SD 100 828 808 WI3
861 IRZ3 IR WHT Offset SD 860 WI4
864 IGW3 General WHT SD 100 829 809 WG3
865 IGZ3 Genera WHT Offset SD 864 WG4
900 COFINS reduce stock X
901 ICOV Cofins Offset 100 D 822 802 CO3
905 ICOS COFINS deduct. PO/GR 100 160 831 801 CO3
906 ICOU Cofins IV Non Deduct 100 161 831 801 NVV
907 ICOA Cofins ded. Not inc. 100 841 801 CO3
910 PIS Reduce stock X
911 IPSV Offset IPSS / IPSU 100 E 824 804 PI3
915 IPSS PIS deduct. PO/GR 100 160 833 803 PI3
916 IPSU PIS non deductib. IV 100 161 833 803 NVV
918 IPSA PIS ded. not inc. 100 843 803 PI3
9.2 Update Pricing Procedure SD

The below SD pricing procedure is based on SAP sample delivery RVXBRA. Examples for
other procedures (like RVXBRE etc.) are not given, since the changes are the same. The new
or changed entries are shown in red. Adapt the calculation procedures that you use in a
corresponding way or create copies of the old ones and adapt the new ones in order to have
a backup.
Step Cntr CTyp Description From To Man. Reqt SubTo Stat AltCTy AltCBV ActKy Print
10 Price 2 X
10 1 ZPB0 Price w/o Taxes X
10 2 ZPB1 Price+ISS X
10 3 ZPB2 Price+PIS+COF X
10 4 ZPB3 Price+ISS+PIS+COF X
45 X
50 RB00 Discount (Value) 2 X
290 K X
300 ICMI Price+Tax (for NF) 2 323 ERL X
320 K004 Material 2 ERS
321 K007 Customer Discount 2 ERS
322 K005 Customer/Material 2 ERS
329 320 328
400 KF00 Freight ERS
595 590
600 IBRX Brazil tax calc. 595 596 X 320
610 IPI3 IPI from SD X 521 301 MW1
620 ICM3 ICMS from SD X 523 303 MW2
630 ICS3 Sub.Trib. from SD X 524 304 MW3
650 ICZF ADMS Disc. Zona Fr. X 525 305 MWS
660 IFR3 ICMS on freight SD X 527 307 MW3
670 IFS3 ICMS ST freight SD X 528 308 MW3
675 ISS3 ISS from SD X 526 306 MW4
680 ISA3 ISS at Provider SD X 521 301 MW4
681 ISB3 ISS WHT at Prov. SD X 522 302 MW4
682 ISE3 ISS at Serv.Loc. sd X 523 303 MW4
683 ISF3 ISS WHT Srv.Loc. X 524 304 MW4
Page 10 of 16
Step Cntr CTyp Description From To Man. Reqt SubTo Stat AltCTy AltCBV ActKy Print
SD
684 ICSO ISS offset 675 683 BRI
685 ICN3 COFINS from SD X 821 801 COF
686 ICO2 COFINS Offset SD 685 BRI
687 IPS3 PIS from SD X 823 803 PIS
688 IPS2 PIS Offset SD 687 BRI
700 Total Tax Value 610 690 X
720 ICMO ICMS offset 620 BRI
740 DIFF Rounding Off 13 16 4 ERS
750 4 X
799 R100 100% discount 750 55 28 ERS
800 SKTO Cash Discount 9 X 11
810 VPRS Cost 4 B X
960 Withholding taxes X
961 ICW3 COFINS WHT SD X 825 805 WC3
963 ICZ3 COFINS WHT SD 961 X WC4
offset
965 IPW3 PIS WHT SD X 826 806 WP3
967 IPZ3 PIS WHT SD Offset 965 X WP4
970 ISW3 CSLL WHT SD X 827 807 WS3
972 ISZ3 CSLL WHT SD offset 970 X WS4
975 IRW3 IR WHT SD X 828 808 WI3
977 IRZ3 IR WHT SD offset 975 X WI4
979 IGW3 General WHT SD X 829 809 WG3
980 IGZ3 Genera WHT SD 979 X WG4
offset
985 Withholding taxes: X
Tax codes
986 ICW4 COFINS WHT code 963 983 X
987 IPW4 PIS WHT code 965 983 X
988 ISW4 CSLL WHT code 972 983 X
989 IRW4 IR WHT code 975 983 X
990 IGW4 General WHT code 979 983 X
The SD pricing procedure below is the new price supplement procedure RVXBR2 which is
introduced for the optional new price conditions. It can be configured in the following way:
St C CTyp Description Fro To M M S P S Req A.C A.B. Act.K
10 1 ZPB0 Price w/o Taxes
10 2 ZPB1 Price+ISS
10 3 ZPB2 Price+PIS+COF
10 4 ZPB3 Price+ISS+PIS+COF
40 1 RA00 % Discount from Net
40 2 RB00 Discount (Value)
40 3 RC00 Quantity Discount
40 4 RD00 Weight Discount
10 Customizing of Extended WHT

10.1 WHT Types at Payment
Base amount = Modified Tax Amount
Rounding rule = W/tax comm round
Cash Discount = C/disc pre W/tx
Post w/tax amount =X
No accumulation
W/tax base manual =X
Manual w/tax amount =X
No cert numbering =X
Base amount = W/tax code level
Withholding tax amount = W/tax code level
No central invoice
Minimum Check at item level
Page 11 of 16
W/Tax Type Description

CP COFINS at Payment
GP General WHT (PIS/COF/CSLL/IR) at Payment
PP PIS at Payment
RP IR at Payment
SP CSLL at Payment
10.2 WHT Types at Invoice

Base amount = Modified Tax Amount
Rounding rule = W/tax comm round
Post w/tax amount =X
No accumulation
W/tax base manual =X
Manual w/tax amount =X
No cert numbering =X
Base amount = W/tax code level
Withholding tax amount = W/tax code level
W/Tax Type Description

IW ISS WHT
10.3 WHT Codes

Percentage subject to tax: 100,00%
With/tax rate: 100,00%
W/Tax Type W/Tax Code Description

CP CP COFINS 100% WHT Amount
GP CP General 100% WHT Amount
IW IW ISS 100% WHT Amount
PP PP PIS 100% WHT Amount
RP RP IR 100% WHT Amount
SP SP CSLL 100% WHT Amount
10.4 Define Processing Key For Modified Tax Amount

WHT Type Processing Key
IW ISW
CP WTC
CP WC3
PP WTP
PP WP3
SP WTS
SP WS3
RP WTI
RP WI3
GP WTG
GP WG3
10.5 Assign WHT Types to Company Codes

In IMG, assign all relevant WHT types to all Brazilian company codes that are subject to them.
 To activate for MM, flag With/tax agent in vendor data and assign validity.
 To activate for SD, flag Subject to w/tax in customer data.
10.6 Define Accounts For Withholding Tax to Be Paid Over

Assign G/L accounts for WHT to WHT types.
Page 12 of 16
10.7 Define Official Collection Codes

The official WHT codes cannot be used to specify collection codes. Instead, define them in
view V_T059Z_WITHCD2.
10.8 Assign Condition Types to Withholding Tax Types

WHT Type Condition Type
CP ICW4
PP IPW4
SP ISW4
RP IRW4
GP IGW4
10.9 Maintain Tax Relevant Classification

Argentina Customizing: view V_1ATXREL, according to Note 178824
Tax rel. Text
CP Cofins Payment
GP General WHT payment
PP PIS WHT Payment
RP IR WHT Payment
SP CSLL WHT payment
10.10Maintain Withholding Tax SD Conditions

Transaction VK11.
Country BR. Maintain for all conditions a rate of 100%, assign validity.
Condition Tax Rel. Class. W/tax code
ICW4 CP CP
IPW4 PP PP
ISW4 SP SP
IRW4 RP RP
IGW4 GP GP
11 FI Tax Codes
Activate additional taxes in transaction FTXP for existing tax codes or create new ones.
11.1 Tax Codes Used in MM

11.1.1 To activate COFINS non-deductible:
Rate (%) Cond. Type Description Tax Group Acct. Key
100 ICON COFINS NVV Normal Tax COFI NVV
100 ICOO COFINS NVV Offset Tax Included COFI NVV
11.1.2 To activate PIS non-deductible:

100 IPSN PIS NVV Normal Tax PIS NVV
100 IPSO PIS NVV Offset Tax Included PIS NVV
Page 13 of 16
11.1.3 To activate COFINS deductible:

100– ICOV COFINSOffset ICOS/ICOU COFI CO3
100– ICOS COFINS Normal PO/GR COFI CO3
100– ICOU COFINS Normal IV NVV COFI NVV
100 ICOA COFINS Normal PO/GR COFI CO3
11.1.4 To activate PIS deductible:

100– IPSV PIS Offset IPSS / IPSU PIS PI3
100– IPSS PIS Normal PO/GR COFI PI3
100– IPSU PIS Normal IV NVV COFI NVV
100 IPSA PIS Normal PO/GR COFI PI3
11.1.5 To activate withholding taxes:

100 ICOW COFINS WHT WHCO WTC
100– ICOZ COFINS WHT Offset NVV
100 IPSW PIS WHT WHPI WTP
100– IPSZ PIS WHT Offset NVV
100 ICSW CSLL WHT WHCS WTS
100– ICSZ CSLL WHT Offset NVV
100 IIRW IR WHT WHIR WTI
100– IIRZ IR WHT Offset NVV
100 IGEW General WHT WHT WTG
100– IGEZ General WHT Offset NVV
11.1.6 To activate ISS New 2004:

100 ISSA ISS at Provider ISSP NVV
100 ISSB ISS WHT at Provider ISSP ISW
100 ISSE ISS at Service Loc. ISSS NVV
100 ISSF ISS WHT at Service Loc. ISSS ISW
12 SD Tax Codes (View J_1BTXSDCV)

Activate additional taxes for SD tax codes by flagging the relevant taxes on the existing SD
tax codes or on newly created ones.
13 Maintain Settings For External Tax Calculation

13.1 Structure for Tax Jurisdiction Code (View V_TTXD)
New entry for TAXBRJ. Level1 = 3, level2 = 4.
13.2 Activate External Tax Calculation

For calculation procedure TAXBRJ, specify ext. system C.
Page 14 of 16
13.3 Define Logical Destination

For ext. system C, specify:
C JUR J_1BTAXJUR_DETERMINE_NEW
C TAX J_1BCALCULATE_TAXES
14 Define Tax Jurisdiction Codes

For new ISS calculation, two-level jurisdiction codes should be maintained.
The proposal is to use the first three digits for the state (e.g. ‘SP ‘ for Sao Paulo) and the last
four digits to define the municipio. A suggestion is to use the digits 4 through 7 of the IBGE
code for this. As an example, ‘SP 0308’ would be the municipio of SAO PAULO, ‘SP 4850’
the municipio of SANTOS, etc.)
15 Assign Jurisdiction Codes to Ranges of Postal

Codes
For proper tax jurisdiction code validation and value help, assign valid ranges of postal codes
to the newly created tax jurisdiction codes.
16 Master Data Changes

There are changes to master data necessary in order to correctly effectuate the new tax
calculation.
16.1 Vendors (Transaction XK02)

Assign all WHT types and codes that are applicable.
Update address with new tax jurisdiction code for correct ISS calculation.
16.2 Customers (Transaction XD02)

Assign all WHT types and codes that are applicable.
Update address with new tax jurisdiction code for correct ISS calculation.
16.3 Other Address Changes: Organizational Structure

In order to allow correct calculation of ISS, all relevant adresses must be updated with the
new Jurisdiction codes. This is necessary for:
 Company Codes
 Plants
 Business Places (Filial)
 General addresses of central address management that are used as delivery
addresses
17 ISS Customizing
Details about the ISS Customizing logic can be found in the ISS documentation. Here, only an
overview of the necessary Customizing steps is given.
17.1 Tax Laws

View: J_1BATL3V. Maintain definitions for ISS tax laws.
Page 15 of 16
17.2 Official Service Types

Define official service types for purchasing (view J_1BSERVTYPES1V) and sales (view
J_1BSERVTYPES2V) processes.
17.3 Generic Service Types

Define generic service types in view J_1BGENSERVTV.
17.4 Assign Official Service Types

Assign official service types as needed:
 to generic service types (table J_1BSERVASSIGN1)
 to material numbers (J_1BSERVASSIGN2)
18 Tax Rates
18.1 COFINS
Maintain entries in transaction J1BTAX (R/3 4.7 or higher) or view J_1BTXCOFV. Use the tax
groups of dynamic exceptions you created.
18.2 PIS
Maintain entries in transaction J1BTAX (R/3 4.7 or higher) or view J_1BTXPISV. Use the tax
18.3 ISS
Maintain entries in transaction J1BTAX (R/3 4.7 or higher) or view J_1BTXISSV. Use the tax
18.4 Withholding Taxes

Maintain entries in transaction J1BTAX (R/3 4.7 or higher) or view J_1BTXWITHV. Use the
tax groups of dynamic exceptions you created.
You define either a general WHT collection code and a combined rate or the four individual
withholding taxes separately.
Page 16 of 16

Customizing ISS PIS COFINS For Classic

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Customizing ISS PIS COFINS For Classic

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Customizing Guide:

New Taxes 2004 (ISS, PIS, COFINS,

– For Classic (Non-Condition-Based) Tax

1 Purpose of This Guide

2 Create Condition Types

2.1 Condition Types For Application TX

Cond. Type Description

Cond. Type Description

2.2 Condition Types For Application V

Tax Type Description

Cond. Class: D (Taxes)

Tax Type Description

Cond. Class: A (Discount or surcharge)

Tax Type Description

2.2.2 WHT Code Conditions

Tax Type Description

3 Price Conditions Including Taxes

3.1 Price Conditions SD

Cond. Type Description

3.2 Price Conditions MM

3.3 Define Which Taxes Are Included in MM/SD Price

4 Create Entries in J_1BAJ

Tax Type Tax Group Description WHT Offset

5 Create Processing Keys for FI (T007B)

Processing Key Description

Tax type: 2 (input tax)

Processing Key Description

Tax type: 1 (output tax)

Processing Key Description

6 Create G/L Accounts

177020: CSLL Withholding Tax Posting at Payment

7 Define and Assign Tax Accounts

Account Key Account

8 Define Account Keys for SD (T687)

9 Update Calculation Procedures

100 BASB Base Amount

9.2 Update Pricing Procedure SD

10 Customizing of Extended WHT

W/Tax Type Description

10.2 WHT Types at Invoice

W/Tax Type Description

10.3 WHT Codes

W/Tax Type W/Tax Code Description

10.4 Define Processing Key For Modified Tax Amount

10.5 Assign WHT Types to Company Codes

10.6 Define Accounts For Withholding Tax to Be Paid Over

10.7 Define Official Collection Codes

10.8 Assign Condition Types to Withholding Tax Types

10.9 Maintain Tax Relevant Classification

10.10Maintain Withholding Tax SD Conditions

11.1 Tax Codes Used in MM

11.1.2 To activate PIS non-deductible:

11.1.3 To activate COFINS deductible:

11.1.4 To activate PIS deductible:

11.1.5 To activate withholding taxes:

11.1.6 To activate ISS New 2004:

12 SD Tax Codes (View J_1BTXSDCV)

13 Maintain Settings For External Tax Calculation

13.2 Activate External Tax Calculation

13.3 Define Logical Destination

14 Define Tax Jurisdiction Codes

15 Assign Jurisdiction Codes to Ranges of Postal