IRRF (FINA050 - SIGAFIN)

The field IRRF (Income Tax Withheld at Source) is automatically calculated by the system, according to the following priorities:

When the Supplier is a Natural Person:

• The system considers the  IRRF Table.

When the Supplier is a Legal Entity:

• Checks the Class Register through information from the fields Calculate IRRF and IRRF Perc.;
• Parameter MV_ALIQIRF.

Same treatments to natural person and legal entity:

The system also uses the following parameters for calculating IRRF in Accounts Payable:

• MV_VENCIRF - Indicates if the IR bill will be generated based on issue, maturity or accounting date.
• MV_VLRETIR - Specifies the minimum amount for exemption from withholding IRRF. In this case, the bill with amount lower than this parameter is not generated and IR is zero.
• MV_VCTIRPF - Generates IRPF per date, when considering a bill payable being the supplier a legal entity.

By entering E in the parameter content, the bill referring to the IRRF is generated as off the bill issue date. By entering V it is generated as of the bill due date. By entering C, it is generated as of the accounting date of the bill (application below).

Practical Application 1 - Supplier Natural Person

Suppose that while adding a bill payable to a supplier who is a Natural Person, the percentage of 3% in the IRRF Table and using a class that calculates IRRF with the percentage of 8% are defined. While adding the bill amount of R$ 1,000.00, the system automatically fills in the field IRRF with the amount of R$ 30.00 (considering the IRRF table instead of the Class File).

Practical Application 2 - Supplier Legal Entity

When a rate of 3% in the parameter MV_ALIQIRF and a class that calculates IRRF with 8% are defined, while adding a bill for $ 1,000.00, the system fills the field "IRRF" with the amount R$ 80.00 (relating to the class file).

Practical Application 3 - IRRF withholding while generating bills payable using the parameter MV_VCTIRPF

Via the issue - E

By Due date - V

By Accounting - C

Practical Application 4 - IRRF withholding while generating bills payable using the parameters MV_VENCIRF and MV_MP447, according to Provisional Measure 447/2008

The due dates of the taxes bills generated (IRRF and INSS) are calculated until the twentieth day of the following month.

Different treatment in IRRF tax generation, pursuant to article 34 Law 10,833, parameter MV_VENCCRC.

Governmental agencies, pursuant to article 34 Law 10,833 must withheld at source, in bills payable, for Income Tax, CSLL, COFINS and PIS/PASEP.

To meet this requirement it is necessary to configure the parameter MV_VENCCRC as described below.

Practical Application 1 - IRRF withholding while generating bills payable using the parameter MV_VENCCRC

Different treatment in IRRF tax generation, pursuant to article 70 Law 11,196, dated November 21, 2006.

This treatments aims at generating IRRF bill with different due date when considering bills payable generated in December 2006 or December 2007.

Example 1 - In December 2006, payments are effected

a. Until the 3rd (third) business day of the ten following days, for the generator facts incurred in the 1st and 2nd ten-day period:

b. Until the 1st (first) ten days of January, 2007, for the generator facts incurred in the 3rd (third) ten-day period.

Example 2 - In December 2007, payments are effected

a. Until the 3rd (third) business day of the 2nd (second) ten-day period, for the generator factors incurred in the 1st (first) ten-day period.

b. Until the 1st (first) ten days of January, 2008, for the generator facts incurred in the 2nd (second) and 3rd (third) ten-day period.

Treatment for IR calculation and retention, for legal entities, pursuant to article 724, item II from RIR, approved by Decree nr 3,000/99

Using this treatment tax withholding for yields of legal entities are only effected based on taxable, presumptive and estimated profit.

It is understood that the IR-Fonte generator factor related to services rendered by legal entities to other legal entities is on daily basis, therefore invoices from the same supplier and from the same day must be summed up for limitation purposes and invoices whose generator factors incurred in different days shall not be summed up.

This way, if in the month there is more than one payment or yield credit to the same legal entity, tax is calculated on each factor and if it does not reach the minimum amount of R$ 10.00 there is exemption of withholding tax, even if the tax in the month, on the sum of these yields, overcomes this amount.

Practical Application

Treatment for natural people IRRF calculation in the issue of bills in accounts payable, considering the number of dependents

This treatment aims at generating bills in accounts payable, excluding from the natural person IRRF calculation, the value per dependent, established by the Revenue Service.