SAP AG, International Development

Glossary
Brazilian Terms
08. Juli 2013

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Glossary

Branch
The branch is the organizational unit where tax reporting and Nota Fiscal reporting is done. In the organizational hierarchy, it is located between company and plant, i.e n branches may be assigned to one company code. Theoreticaly, m plants may be assigned to one branch; however, in reality most plants are assigned to exactly one branch.

CFOP
Cdigo Fiscal de Operaes e Prestaes A code defined by the Brazilian authorities for the type of operation. The CFOP has to be printed on all Notas Fiscais and is included in legal reporting, such as the Livros Fiscais, or fiscal books. It contains information on the origin of the goods and on the type of operation (sales, returns, stock transfers, sales of communication or transportation services, exports)

CFOP Determination
Determination of the type of operation (CFOP) according to factors like direction of the movement (ingoing, outgoing); type of destination (same state, different state, different country); type of material (material, electric power, communication, transportation); usage of the material (resale, further processing; consumption; asset, Substituio Tributria); etc. If the CFOP determination table contains the necessary entries, the system determines the CFOP automatically. Sample entries are delivered with the system.

CGC - Cdigo Geral do Contribuinte

Corporate taxpayer's ID; was replaced by CNPJ (Cadastro Nacional de Pessoas Jurdicas) National Registry of Legal Persons. The corporate taxpayers ID has to be entered in the customer/vendor master record if the customer/vendor is a corporation (legal person).

CGC Branch
see Branch.

CNPJ
see CGC.

CPF
Cdigo de Pessoa Fsica Taxpayers ID for natural persons; has to be entered in the customer/vendor master record if a customer/vendor is a natural person.

ICMS
Imposto sobre Circulao de Mercadorias e Servios 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

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- if the customer is subject or not to ICMS - usage of the goods (consumption or production) - material The ICMS is a percentage included tax, i.e. it is embedded in the price.

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 vendors state and the ICMS rate applicable within the customers state.

INSS
(Instituto Nacional de Previdncia Social) social security tax which is witheld together with the IRRF if the tax payer is a natural person.

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 government-owned 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)

IRF
Imposto retido na fonte Withholding tax this entry already exists and is ok.

IRRF
Imposto de Renda Retido na Fonte Withholding tax for certain services to be withheld from legal persons.

ISS
Imposto sobre Servios City tax on services.

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ISSF
Imposto Sobre Servios na Fonte withholding tax on services; may be withheld together with the IRRF.

NBM Code
Cdigo da Nomenclatura Brasileira de Mercadorias (Code of the Brazilian Nomenclature for Goods). This code is a classification of goods issued by the Brazilian government used to determine the IPI tax rate. With the advent of Mercosur, the code has been renamed NCM (Nomenclatura Comun del Mercosur).

Nota Fiscal
Specific legal document in Brazil. This document proves that the taxes incurred due to an operation have been paid correctly. The Nota Fiscal has two primary functions: - It is a document accompanying goods, comparable to a delivery note including tax information. - It is the Brazilian invoice. Payments are made against Notas Fiscais. Therefore, the Nota Fiscal includes both delivery and invoice data. Processes where invoicing and shipping occur at different dates or with different customers/vendors, there will be one Nota Fiscal for shipping and one for invoicing. Example: future delivery sales (the customer receives the invoice first Nota Fiscal Simples Faturamento, later the goods accompanied by a document called Nota Fiscal Simples Remessa.

Substituio Tributria
In Brazil, certain materials are subject to substituio tributria. This means that the fiscal authorities transfer the right to collect taxes to the producer or distributor of the goods, called the substituto tributrio. 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.

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