How to apply the calculation formula for IIBB perception in SAP ERP or S/4 HANA?

The correct calculation of the IIBB perception in Argentina when issuing credit or debit notes is a real challenge for companies. To overcome this challenge, it is necessary to develop a customized solution for the IIBB perception calculation formula, which must take into account all possible variables, to achieve an accurate result.  

In this article, we tell you how its implementation impacts tax savings and compliance. At the same time, we address how the organization will benefit from it.

Importance of integrating the IIBB perception calculation formula into SAP when generating credit and debit notes

In Argentina, the IIBB perception is a tax applied to sales transactions made to final consumers not domiciled in the seller’s jurisdiction. The amount of the perception is calculated on the sales price, applying the tax rate corresponding to the jurisdiction where the transaction takes place.

When the selling taxpayer issues a credit or debit note, it usually modifies the sales price of the original transaction. Therefore, this may generate a change in the amount of the perception to be withheld.

Therefore, it is important to use the correct IIBB perception calculation formula to determine the precise amount to be deducted from this tax in a credit or debit note.

When the calculation is made incorrectly, the selling taxpayer may pay less or more than the amount due. This could result in non-compliance penalties and unnecessary expenses. 

Companies that operate with SAP ERP or S/4 HANA need a solution that allows them to calculate it and customize it to all scenarios, that’s because it is not included in the standard solution.

In response to this, from Wezen we developed a solution for the IIBB Perceptions Calculation Formula. This solution contemplates within SAP ERP or S/4 HANA all the possible variants for each jurisdiction in which invoices, credit notes, and debit notes are issued to the customer. In this way, the selling taxpayer can accurately calculate the perception of IIBB and the refund or non-refund of the tax when generating any of these corrective documents.

What aspects must be considered for the correct calculation of the IIBB perception?

Certain factors must be considered to ensure the accurate calculation of the IIBB perception:

• Business Partner perception regime 

The business partner (known in SAP as a Business Partner) is a customer or supplier that must be registered in the business management system with its corresponding IIBB perception regime. It is important to note that this classification is key to determining the amount to withhold on business partners, registered or not, in the multilateral agreement.

As we can see, the difference can be substantial. For this reason, it is very important to validate the correct tax classification of the business partner in the master data.

• Perception tax rates

In the S/4 HANA or SAP ERP system, all the tax rates must be recorded for each tax classification. This data is of great importance since each jurisdiction applies its tax rates depending on such categorization.

For example, for the provinces of Tucumán, Santa Fe, Misiones, CABA, and Buenos Aires, the tax rates will depend on their corresponding lists informed by the AFIP.

Thus, by recording these conditions, you can determine the correct amount of the IIBB perception to be withheld by the selling taxpayer in each transaction carried out with customers or suppliers.

• Return time according to each jurisdiction

The time of return of a perception varies according to the jurisdiction. At the same time, it is necessary to contemplate within this point when the days for the refund start to be counted. 

To have more precision on the return times, the solution includes the registration of the conditions, where the time to return the perception, if applicable, will be specified. Likewise, it is also necessary to specify in the same table if it should be a partial or total refund.

• Minimum for perception

In the solution, we will be able to specify the minimum taxable per perception defined for each jurisdiction. In this way, the system will be able to identify those operations on which perceptions should not be deducted.

Benefits of integrating a correct calculation formula for IIBB Perception into SAP 

The benefits of using a correct calculation formula for IIBB Perception are the following:

• Increase the transparency of operations: Taking into account the tax classification of the business partner (known in SAP as Business Partner), the IIBB perceptions reported to the AFIP are correctly determined.

In this way, we increase transparency in company operations and reduce the risk of administrative and tax sanctions.

• Apply SAP best practices in the market: The formula uses standard functions and is based on the standard calculation formula.

Importantly, standard functions are a simple and efficient way to calculate IIBB Perception. Even so, there are limitations when there are specific rules for each jurisdiction, such as minimum tax rates or differential rates. To solve it, the solution takes into account these particularities, improving the efficiency and precision of the IIBB perception calculation process.

• Reduce risks and costs: This is undoubtedly one of the main benefits, which is based on 3 aspects:
  • An implementation in reduced times.
  • Use of a formula that helps companies comply with their tax obligations, reducing the risk of administrative and tax sanctions.
  • Through an accurate calculation, unnecessary expenses are avoided, such as the payment of erroneous perceptions or the return of perceptions.

In conclusion,

If your organization operates with SAP ERP or S/4 HANA, within the framework of issuing Debit or Credit Notes it is essential to have a formula for calculating earnings that takes into account the variants of all jurisdictions. All of this helps to have greater visibility of the perception calculation process, avoiding unnecessary expenses and guaranteeing compliance.

At Wezen we have created this tool, so you can gain efficiency. We can help you. Write to us.