Brazil

Brazil

Those who are doing business in Brazil are familiar with the term „lava jato“ – or car wash. The term has been coined for a series of corruption investigations surrounding the state controlled oil company Petrobras - targeting both big business and high politics. While the intensity of both investigations and sanctions is new to Brazil, the problem of deep-rooted corruption is not. Last year Brazil ranked 96 out of Transparency International`s 180 countries evaluated in its Corruption Perception Index, right next to Colombia and Peru.

In order to fight the high level of corruption, Brazil has advanced to become one of the administratively and bureaucratically most regulated countries in the world. These regulations are time and asset consuming wherefore they inhibit Brazil`s economic growth potential. In order to alleviate those negative side effects, one of the measures comprises of an electronic bookkeeping system SPED (Sistema Público de Escrituração Digital) which significantly reduces the paper-based reporting activities which makes the issuing, sending, receiving and archiving of invoices for audits much easier.

 

e-Invoicing

In Brazil using the e-Invoice Nota Fiscal Eletrônica (NF-e) is mandatory for all companies. The responsible tax authority is the SEFAZ (Secretaria de Fazenda) which cooperates with state institutions in enforcing and monitoring tax regulations. The NF-e is only valid if it carries the electronic signature of the sender as well as the verification of the SEFAZ in terms of an authorization barcode (DANF-e). These verification mechanisms need to be established prior to sending the goods. There are respective e-invoices for services and transports as well:

NFe for goods
No goods must be delivered without the printed invoice including the authorization codes (DANFe).

NFe-s for services
The service provider sends the invoice to the municipality which authorizes it. Afterwards, the buyer can download the invoice directly from the city`s website.

CTe for transports
When using third party transporting services the invoice needs to be validated by the buyer using his backend system. The buyer needs to integrate the invoice in his monthly reports to the government. The document CTe 3.0 has to be carried along during transportation.

An extension of SPED is Bloco K which includes details on the usage of raw materials, inventory and storage movements of holdings. Starting in 2019, it is mandatory for companies to electronically submit the Bloco K. More...

Mexico: Tax Reform 2020 levies VAT on Digital Platforms

The Mexican Congress passed a tax law reform package for 2020 on October 31, 2019.…

Brazil: Commission approves new Model of Tax Incentives for IT

The Committee on Science and Technology, Communication and Informatics of the House of Representatives approved…

Brazil: How to tax the Digital Economy

Last week, the OECD launched a public consultation to discuss the taxation of the digital…

Brazil: Supreme Court Ruling on PIS / Cofins creates Pressure for Tax Reform

Although it has been on the back burner in recent weeks, the PIS / Cofins…

Brazil: New Regulation for PIS / COFINS Taxes

On October 15, the Normative Instruction IN # 1,911 / 19 was published, which outlines…

Brazil: Bolsonaro allows Tax Debt Negotiations

On October 16th, Brazilian President Jair Bolsonaro sanctioned the Provosional Measure “Legal Taxpayer MP” which…

Brazil: Update of e-Social implementing Schedule

In line with Brazil`s Ministry of Economy goal to simplify the eSocial tax, social security…

Brazil: Confaz published 3 new ICMS Agreements

On September 2, 2019, Brazil`s National Council of Finance Policy (Confaz) published 3 new ICMS…

Brazilian exporters gain competitiveness with changed RECOF-legislation

On August 1st, 2019, important changes were published in the Official Gazette of the Union…

Brazil: Latest Technical Notes

Gas Market A Joint Technical Note was published by the Ministries of Economy on 08/07/2019.…