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1. Test Cases
Definitions
Tax Tariff code: Official code given by the legal authorities for a physical material/product. It is
commonly named ”NBM” or ”NCM” code in Brazil.
Tax type: In Brazil, the most important sales taxes on physical products are IPI and ICMS.
We will design
them as tax types. Please note that more than those 2 exist.
Convênio 100: Name of a law that prescribes a calculation rule for ICMS. It applies to basic
goods.
1.1 Industrialization
Given the customer be a normal company, located in Sao Paulo (SP), the same state as
our delivering plant.
Given that all four materials have a reduced ICMS tax base of 70% which has been
specially granted by the Sao Paulo authorities for those materials.Given that all four
materials have a full IPI tax base of 100%.
BP 1111 Company
Taxes
Country Region Tax type Tax group
BR ICMS COMPANY
BR IPI FULL
Country Region Tax tariff Tax type Mat. |Cust Rate | Base
code group
BR 100.100.10 IPI Full | 10% | 100%
Company
BR 100.200.10 IPI Full | 5% | 100%
Company
The calculation rule for IPI is: Value(IPI) = base factor(IPI) * rate factor (IPI) * ( Net value +
value(ICMS) )
The calculation rule differs between Convenio 100 and regular ICMS tax calculation in the
following way:
Normal goods:
value(ICMS) = Net / ( 1 - rate factor(ICMS) * base factor(ICMS) ) - Netvalue.
Product 1
Product M1 Material
Taxes
Country Region Tax tariff code
BR 100.100.10
Country Region Tax type Tax group
BR ICMS REGULAR
GOODS
BR IPI FULL
Calculation
Net = 82000
Regional Tax ICMS: 18%, with 30% base reduction
Federal Tax IPI: 10% without base reduction
Rate factor (ICMS) = 0,18 (18%)
Base factor (ICMS) = 0,7 (70% or 30% base reduction)
Hence:
Product 2
Product M2 Material
Taxes
Country Region Tax tariff code
BR 100.100.10
Country Region Tax type Tax group
BR ICMS CONVENIO100
BR IPI FULL
Calculation
Like product 1, but product has tax group CONVEN100 for tax cat. ICMS.
Product 3
Product M3 Material
Taxes
Country Region Tax tariff code
BR 100.200.10
Country Region Tax type Tax group
BR ICMS REGULAR
GOODS
BR IPI FULL
Calculation
Like Product 1, but with different NBM code, hence different IPI rate
Net = 82000
Regional Tax ICMS: 18%, with 30% base reduction (ICMS within S.Paulo with a
material base reduction)
Federal Tax IPI: 5% without base reduction (derived from another NBM code)
Hence:
Product 4
Product M4 Material
Taxes
Country Region Tax tariff code
BR 100.200.10
Country Region Tax type Tax group
BR ICMS CONVENIO100
BR IPI FULL
Calculation
Like Product 2, but with different NBM code, hence different IPI rate, or
Like product 3, but product has tax group CONVEN100 for tax cat. ICMS.
Value(ICMS) = 82000 * (1 - 0,18*0,7 - 0,18 ) / (1 - 0,18) - 82000 = 94600 -82000 =
12600,00
Value(IPI) = 0,05 * 94600 = 4730,00
·0 Freights
Use product M1:
Freight should be 5000
Product M1 Material
Taxes
Country Region Tax tariff code
BR 100.100.10
Country Region Tax type Tax group
BR ICMS REGULAR
GOODS
BR IPI FULL
Calculation
Net = 82000
Regional Tax ICMS: 18%, with 30% base reduction
Federal Tax IPI: 10% without base reduction
Rate factor (ICMS) = 0,18 (18%)
Base factor (ICMS) = 1 (no base reduction)
Hence:
Product M1 Material
Taxes
Country Region Tax tariff code
BR 100.100.10
Country Region Tax type Tax group
BR ICMS REGULAR
GOODS
BR IPI FULL
Calculation
Net = 82000
Regional Tax ICMS: 18%, with 30% base reduction
Federal Tax IPI: 10% without base reduction
Rate factor (ICMS) = 0,18 (18%)
Base factor (ICMS) = 0,7 (70% or 30% base reduction)
Hence:
Given, we are selling product M5 to a customer for consumption. M5 has Tax tariff code
100.100.10. M5 is a regular good as to its ICMS tax categorization.
Given the customer be a normal company, located in Sao Paulo (SP), the same state as
our delivering plant.
Given that all four materials have a reduced ICMS tax base of 70% which has been
specially granted by the Sao Paulo authorities for those materials.Given that all four
materials have a full IPI tax base of 100%.
BP 1111 Company
Taxes
Country Region Tax type Tax group
BR ICMS COMPANY
BR IPI FULL
Country Region Tax tariff Tax type Mat. |Cust Rate | Base
code group
BR 100.100.10 IPI Full | 10% | 100%
Company
The calculation rule for IPI is: Value(IPI) = base factor(IPI) * rate factor (IPI) * ( Net value +
value(ICMS) )
Product M5 Material
Taxes
Country Region Tax tariff code
BR 100.100.10
Country Region Tax type Tax group
BR ICMS REGULAR
GOODS
BR IPI FULL
Calculation
Net = 82000
Regional Tax ICMS: 18%, with 30% base reduction
Federal Tax IPI: 10% without base reduction
Rate factor (ICMS) = 0,18 (18%)
Base factor (ICMS) = 0,7 (70% or 30% base reduction)
Hence:
·4 Freights
Please use product M5
Value(ICMS) = ( 82000 / ( 1 - ( 0,18 * 0,7) * (1 + 0,1) ) + 5000 ) * (1 + 0,1) * (0,7 *
0,18 ) = ( 95193,87 + 5000 ) * 1,1 * 0,126 = 13823,87.
Value (IPI) = 0,1* 95193,87 = 9519,39