# The calculation process

Source: https://developer.avalara.com/goods-calculation-en/yjn2605481890650/

# The calculation process

Understand how AvaTax Brazil uses static and dynamic attributes to calculate taxability, exemptions, rates, and benefits.

AvaTax Brazil uses a calculation model that determines taxability, exemption, rates, and benefits. This model makes decisions based on attributes from the operating establishment, the traded item, and the transaction participants. 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 setup of the system, when they select its operating items and the legal citations that apply to its business. These characteristics, hereinafter called "static attributes" don’t change from 1 operation to the next, hence the term "static". These attributes are directly derived from ordinary operations and the items traded.

Key static attributes include the following types.

**Property attributes**

-   Address of the establishment

-   Company activity, such as wholesale, retail, industry, or equivalent to industry

**Item attributes**

-   NCM classification and EX tariff code

-   Item type, such as merchandise or product

    -   Product, which is an item that results from your own production or direct import

-   Product origin, such as national, imported, imported in the domestic market, or percentage of imported components

-   Category, which is the product type category that’s subject to specific taxation

-   CEST code

-   Type of package or container, unit of measure, and volume or quantity

## Dynamic attributes

Static traits don’t change much, and they’re easy to predict. Dynamic traits change with each use, and they almost always change. 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 use or applications for specific purposes. As we’ve seen, these dynamic characteristics, which we call "dynamic attributes," change from 1 transaction to another. We need to understand how they become active.

Key dynamic attributes include the following types.

**Operation attributes**

-   Transaction type

**Customer attributes**

-   Customer type, such as PF, PJ, or government

-   Location, such as city, state, free zone, or exterior

-   Branch of activity (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, where some applications qualify for benefits that define reductions or specific exemptions