What is Substituição Tributária in SAP FI - Financial Accounting?

SAP Term: Substituição Tributária

• Component: FI

• Component Name: Financial Accounting

• Description: Tax substitution in Brazil. The system calculates one form of tax substitution, ICMS. Nonetheless, you will only see the term Substituição Tributária in the system, or its common abbreviation SubTrib. Substituição Tributária involves a method of tax collection in which the manufacturer of goods submits ICMS to the fiscal authorities for the tax it incurs when it sells its goods or services to a distributor or retailer, as well as the tax it collects from the distributor or reseller on the presumed resale surcharge. Typical examples in which Substituição Tributária is applied are gasoline and cigarettes. There are few producers, but many retailers.

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• Key Concepts: 
  Substituição Tributária is a tax substitution system used in Brazil. It is a mechanism that allows the collection of taxes at the point of sale, instead of the point of production. This system is used in the FI Financial Accounting component of SAP. 
  
  How to use it: 
  In order to use Substituição Tributária, you must first configure the system in SAP. This includes setting up the tax codes, tax rates, and other related information. Once configured, you can then use the system to calculate taxes at the point of sale and generate reports for tax compliance. 
  
  Tips & Tricks: 
  When configuring Substituição Tributária in SAP, it is important to ensure that all tax codes and rates are up-to-date and accurate. Additionally, it is important to regularly review and update the system to ensure compliance with changing tax regulations. 
  
  Related Information: 
  For more information on Substituição Tributária, please refer to SAP’s official documentation on the topic. Additionally, there are many online resources available that provide detailed information on how to configure and use this system in SAP.