Article by Andrew Karasev
Multinational companies are opening their branches in Brazil and in this small publication the goal is to give you initial idea on ERP system selection and implementation. First of all you should understand the general picture in Brazil. The country has Federal, State and municipal taxes as well as Fiscal Chart of Accounts. The country is also in transition to adopt electronic filing on the level of Accounts Receivable and Payable one per month as well as on the level of General Ledger once per year. Taxation is more complex comparing to what we have here in the United States and it might be understood as combination of VAT and Sales Tax models. In the Value Added Tax the idea is as following. Raw components in their transformation to become finished good and being distributed could change hands several times and every business normally adds the value and sells the items to the next one. Whatever is the difference between the cost and price - this amount is taxed. Thi s model is popular in Europe. Sales tax model is where you do not collect tax until item is sold in retail store and this model is popular in the United States. VAT is typically incorporated into the price list while Sales Tax is typically not. Taxes are also different based on the merchandise type and they might be not only based on simple percentage but also on more complex formula. If your subsidiary is reasonably small then you should expect reasonably high number of consulting hours to setup taxes, electronic filing and legislation update related support. Be ready to budget one hundred and more billable hours. Taxes are highest in the area of Sao Paulo or around 18%. In Rio de Janeiro they are around 12% and in Bahia Salvador area they are lower being about seven percent as we are writing this paper in February of 2012:
1. In order to be in compliance you need to have core SAP B1 functionality tuned for tax rates and formulae and plus you have to acquire add-on to implement SPED (Electronic AR/AP and GL filing). Electronic filing add-on is not cheap piece of software and license cost might be comparable to three professional named user licenses. SAP office in Sao Paulo distributes tax updates but they should be accompanied with manual corrections as tax rates as formula are determined based on your business type
2. Who are the mayor players here in Sao Paulo and Campinas? It is good idea to mention consulting companies who are champions and present in both Brazil and USA. Let's begin the list with Ramo Digital Systems (Sao Paulo downtown), then Fenix Consulatoria (Rio de Janeiro). There are historical heroes such as Alba Spectrum where Andrew Karasev tried to boost SAP BO consulting in Brazil in combination with Microsoft Dynamics GP (formerly known as Great Plains Dynamics), Navision (via Fenix Consulatoria in Rio de Janeiro) and Oracle EBusiness Suite (through Curitiba based subdivision). In 2008 Ramo opened its joint venture in Atlanta Georgia M2-D2
3. Experience and references. Here we have to mention that we were in essence pioneers in SAP BO consulting in the United States (Alba Spectrum nationwide support and local service in Chicagoland, Atlanta and Kalamazoo area of Michigan). In our opinion SB1 server should be installed in your headquarters likely in the USA, Canada or Western Europe. Brazilian Electronic Filing ad-on works over the internet and you should feel yourself in good position to control the situation
4. Campinas Detroit MI Automakers connection. Well Brazil is hosting mayor auto making brands including GM, Chrysler, Ford, Fiat, BMW and Citroen
5. Please call us 1-866-304-3265, 1-269-605-4904, help@efaru.com. We have local presence in Chicagoland, Southern California, Atlanta Georgia, South West Michigan, Houston and Dallas areas of Texas. We serve customers USA and Canada nationwide and internationally via web sessions and phone conferences (Skype is welcom ed). We are working on Brazilian ERP consulting market in Sao Paulo since 2004
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