# The calculation process

Source: https://developer.avalara.com/goods-calculation-en/concepts/concepts_in_the_tax_calculation/

The calculation model (taxability, exemption, rates, and benefits decisions) adopted by AvaTax Brazil involves decisions based on attributes or characteristics that come from both the operating establishment generating the transaction, the item being traded and the participants in the transaction. We classify these characteristics as static and dynamic.

## Static attributes

By static characteristics, we mean the information that the user provides during the adoption and initial configuration of the system when selecting its operating items and the legal citations applicable to its business. These characteristics, hereinafter called "static attributes" do not change from one operation to the next, hence the term "static". These attributes are directly derived from ordinary operations and the items traded.

These are the main ones:

### Property Attributes

-   Address of the establishment

-   Company activity (Wholesale, Retail, Industry or equivalent to industry)

### Item Attributes

-   NCM classification and EX tariff code

-   Item type (Merchandise or Product)

    -   Product (item resulting from own production or direct import).

-   Product Origin (National, Imported, Imported in the Domestic Market, Percentage of imported components)

-   Category (Product type category subject to specific taxation)

-   CEST Code

-   Type of Package/Container, Unit of Measure and, volume/quantity.

## Dynamic attributes

Unlike static characteristics that are predictable and undergo little change, dynamic characteristics can change from one operation to another and almost always do. During the initial configuration of the system, the user needs to verify that we have the correct coverage for such variations and which are the triggers that activate them when necessary. Usually, this trigger is done through data or attributes identified directly in the transaction.

These attributes are derived from specific characteristics of the client such as type of company or organization, its branch of activity (CNAE) or location, of the operation itself as the type of operation (shipment, return, transfer), or even the application of the final item being traded for the purpose of use or applications for specific purposes. As we have seen these dynamic characteristics that we treat as "dynamic attributes" are subject to variations from transaction to transaction and we need to be aware of how they are activated.

These are the main dynamic attributes:

### Operation Attributes

-   Transaction Type

### Customer Attributes

-   Customer Type (PF, PJ, Government)

-   Location (City, State, Free Zone, Exterior)

-   Activity Branch (CNAE)

-   Customer Type (PF, PJ, Government)

-   Customer is ICMS Taxpayer or Not.

-   Tax Regime (Simples, Real Profit, Presumed Profit)

### Item Attributes

-   Entity Use

-   Specific purposes (Some applications specify benefits that define reductions, specific exemptions)