Tax configurator

The requirement is for tax to be controlled in two instances. First, tax must be controlled in every movement of goods operation between parties, even if it is not a sale such as accounts receivable. Second, tax must be controlled in the provision of services between parties, depending on the customer, customer address, product, and the business transaction type (CFOP).

Brazil specifics

The state VAT (ICMS) is levied by the individual states in Brazil. The states set the level of taxation, but the Brazilian federal government may set the minimum rate.

The federal VAT (IPI) is charged by the federal government of Brazil on national and foreign finished goods. Finished goods are goods produced as a result of an industrial process, even if the process is incomplete, partial, or intermediary.

The Municipal Service Tax (ISS) is a form of sales tax payable to municipalities in Brazil. It applies to the supply of any services that are not otherwise taxable by the state authorities (ICMS). The general list of taxable services is outlined in federal law also known as Complementary Law. The specific services are listed in each municipal law.

PIS and COFINS are federal taxes imposed monthly on gross revenue earned by legal entities. PIS is a mandatory employer contribution to an employee savings initiative and COFINS is a contribution to finance the social security system.