What is ICMS in SAP FI - Financial Accounting?

SAP Term: ICMS

• Component: FI

• Component Name: Financial Accounting

• Description: In Brazil, a value-added tax levied at state level on the circulation of goods and services. It is applied to the purchase and sale of domestic and imported goods, interstate and intermunicipal transportation, and communications. ICMS is a percentage-included tax, meaning that it is embedded in the price of the goods. In Portuguese, the tax is known as Imposto sobre Circulação de Mercadorias e Serviços.

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• Key Concepts: 
  ICMS stands for Imposto sobre Circulação de Mercadorias e Serviços, which is a Brazilian value-added tax. It is levied on the sale of goods and services within Brazil and is collected by the state governments. The ICMS tax rate varies from state to state, and is typically between 17-25%. 
  
  How to use it: 
  In SAP FI Financial Accounting, ICMS is used to calculate the taxes due on sales transactions. The system will automatically calculate the ICMS tax rate based on the state in which the transaction takes place. The ICMS tax rate can be adjusted manually if needed. 
  
  Tips & Tricks: 
  When setting up ICMS in SAP FI Financial Accounting, it is important to ensure that the correct tax rate is applied to each transaction. This will help to ensure that the correct amount of taxes are collected and paid. 
  
  Related Information: 
  For more information about ICMS, please refer to the Brazilian government website: http://www.receita.fazenda.gov.br/Legislacao/Leis/2006/Lei11172.htm