(BRA) Set up a withholding tax [AX 2012]

Updated: January 24, 2013

Applies To: Microsoft Dynamics AX 2012 R3, Microsoft Dynamics AX 2012 R2

Use this procedure to set up a withholding tax code, a withholding tax type, and a calculation parameter to calculate withholding taxes for consultancy services or professional service payments. You can also enter values for the withholding tax code by using the Withholding tax values form.

Example

The following table explains how withholding tax is calculated as a percentage of a payment amount in a month.

Invoice number

Invoice date

Invoice amount

Withholding tax code (Origin – Percentage of gross amount in a month)

Minimum limit

Payment date

Payment journal amount

123

November 15, 2013

BRL 4000.00

10 percent

BRL 5000.00

November 25, 2013

BRL 4000.00. Because the amount has not exceeded the minimum limit, no withholding tax is applicable to invoice 123.

345

November 20, 2013

BRL 2000.00

10 percent

BRL 5000.00

November28, 2013

BRL 1400.00, which is the amount that remains after you deduct the withholding tax (BRL 2000 – BRL 600). BRL 600 is the net of withholding tax (6000*10%).

6000.00 is the sum of invoices 123 and 345, to which withholding taxes apply as a percentage of the payment amount in a month.

  1. Click General ledger > Setup > Withholding tax > Withholding tax codes.

  2. Click New to create a withholding tax code. In the Withholding tax name field, enter the name for the withholding tax code.

  3. In the Brazilian tax withhold type field, select a type of withholding tax from the following options:

    • PIS – The Programa de Integração Social (PIS) tax is withheld by vendors or customers for consultancy or professional service payments.

    • COFINS – The Contribuição para o Financiamente da Securidade Social (COFINS) tax is withheld by vendors or customers for consultancy or professional service payments.

    • CSLL – The Contribuição Social sobre Lucro Líquido (CSLL) tax is withheld by vendors or customers for consultancy or professional service payments.

    • PCC – The combination of PIS, COFINS, and CSLL tax codes. This option is used to withhold taxes by vendors or customers for consultancy or professional service payments.

    • IR – The Imposto de Renda Retido na Fonte (IR) tax is retained by vendors or customers at the time when the fiscal document is posted.

  4. On the General FastTab, in the Currency field, select the company currency for the calculation of the withholding tax payment.

    NoteNote

    The withholding tax code currency should be the same as the default currency that is set up in the Legal entities form when Percentage of gross amount in month is selected in the Origin field.

  5. On the Calculation FastTab, in the Origin field, select Percentage of gross amount in month to calculate withholding taxes.

    NoteNote

    The withholding tax is calculated, taking into account all of the payments, including the sales tax, that are made to a vendor in the same calendar month. The withholding tax calculation includes all of the invoices that are due to be paid to a vendor during that month.

  6. Click Values to enter the values for the withholding tax code. For more information, see Withholding tax values (form).

  7. In the Minimum limit field, enter the minimum base amount for the calculation of the withholding tax.

  8. In the Value field, enter the percentage that is used for the calculation of the withholding tax.


Announcements: To see known issues and recent fixes, use Issue search in Microsoft Dynamics Lifecycle Services (LCS).

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