On August 14th, Brazil`s Receita Federal published the Normative Instruction 1.971, which extends the deadline for transmitting the e-Financial report (“e-Financeira”) for the first half of 2020 until the last business day of October 2020.
What is e-Financeira?
e-Financial is a new ancillary obligation that requires the presentation of current account balances, redemption transactions, income, savings, among other financial information provided for in Normative Instruction 1571 of 2015.
Who is obliged to present e-Financeira?
The entities obliged to present e-Finance are legal entities and insurance companies authorized to structure and sell personal insurance plans. Among the legal entities are those who are:
- authorized to structure and sell supplementary pension benefit plans
- authorized to institute and manage Individual Programmed Retirement Funds (Fapi)
- whose main or accessory activity is the raising, intermediation or application of own or third party financial resources, including consortium operations, in national or foreign currency, or the custody of third party property value
Which information are included in the report?
Among others, e-finance will include information from users of its services, such as:
- balance on the last business day of the year of any deposit account, including savings accounts, considering any transactions, such as payments made in currency or checks, issuing of credit orders or similar documents or cash and term redemptions, itemizing the total gross monthly income paid or credited to the account, accumulated annually, month by month
- balance on the last business day of the year of each financial investment, as well as the corresponding monthly sums of credit and debit, considering any movements, such as those related to investments, redemptions, disposals, assignments or settlements of the aforementioned investments, month after month, throughout the year
- gross income, accumulated annually, month by month, by financial investments throughout the year, individualized by type of income, including amounts arising from the sale or redemption of assets in custody and the redemption of investment funds
- transfer entries between accounts of the same holder carried out between demand deposit accounts, or between savings accounts, or between demand deposit and savings accounts
- foreign currency acquisitions
- conversions of foreign currency into national currency
- transfers of currency and other values abroad
- amount of credits made available to the shareholder, accumulated annually, month by month, by consortium quota, throughout the year.
What is the objective of e-Financeira?
The purpose of the report is for the RFB to cross-check the data with the income and equity of the taxpayers, looking for possible omissions that may cause the entry of complementary income tax.
These regulatory changes could affect your business with view to customizing or support of your ERP/SAP system. Please contact us to learn about possible necessary reactions to the changes – we are happy to assist you!