Brazil: Cancellation of GIA in 2019

On November 11th, 2018, the Brazilian Ministry of Finance (Secretaria de Fazenda) started its pilot project to cancel the monthly due ICMS-GIA reports. The cancellation is part of the „Nos Conformes“ program aimed at reducing auxiliary tax duties while encouraging entrepreneurial self-control.

The report consist of an electronic file including tax books and ICMS tax information, the GIA as well as the digital bookkeeping information EFD. Since the GIA-relevant information are already included in the EFD, companies have thus been unnecessarily burdened in terms of submitting the same information twice.

During the transition period until the end of 2019, companies still have to submit both reports. At the same time, the Ministry of Finance creates its own GIA-Reports from the EFD information which is subsequently compared to the GIA report of the companies to detect inconsistencies. Through the electronic domicile DEC of the taxpayer (DEC – Domicilio Eletronico do Contribuinte) the company will receive a notice in case of necessary corrections or potential violations.

Furthermore, the new model helps detect and prevent potential errors stemming from the Ministry of Finance by carrying out the data reconciliation because it is entirely based on the EFD. This helps improve the usage of resources and well as optimizing taxation practices.

The Ministry of Finance will monitor and evaluate the results of the pilot project in order to make necessary adaptations before going mainstream for all taxpayers at the end of 2019. More taxpayers will be added to the system within the next months in order to reach its full potential.