Brazil: The End of Bloco K – SPED?

The Provisional Measure of Economic Freedom aims to reduce bureaucracy in Brazil and facilitate the opening up of micro and small enterprises. Among the key changes are the relaxation of labor rules and the elimination of permits for low-risk activities. The measure also separates the assets of corporate partners from debts of a legal entity and prohibits assets of companies of the same group from being used to pay off debts of a company.


What changes will be introduced with the Provisional Measure?

With the approval of the House of Representatives to the Provisional Measure of Economic Freedom, one of the main changes will be the extinction of Bloco K. According to Article 16, the Federal Bookkeeping System for Tax, Social Security and Labor Obligations (eSocial) will be replaced by a simplified digital bookkeeping system for social security, labor and tax obligations. This also applies to Bloco K. The Bloco K requirement which exists since 2016 is part of SPED and aims to monitor production inventories to track products.


Just the fact that Bloco K reports various processes in the company, such as own production, processing, reprocessing, assembly, disassembly, co-production, shows its importance. Bloco K also has a fundamental importance for the productive area. Apart from presenting the tax authorities with ancillary information, Bloco K helps:

  • Developing a company`s production process
  • informing the inputs, auxiliary materials, the yield of each input, and validation of the company’s final inventory
  • identifying necessary changes in processes through the mapping of production processes


However, many non-industrial companies have difficulties in generating Bloco K and presenting it to the tax authorities, especially commercial companies. The biggest issue is that both production and inventory control must be correct and fully integrated, as some particularities are required. The correct presentation of the data reflects directly on the company’s operations, since the tax authorities come to know exactly how the taxpayer acts within his line of business.


Will Bloco K be replaced?

The government has been seeking to reduce bureaucracy in the information that the taxpayer provides to the Brazilian tax authority RFB, but it is worth stressing the importance of Bloco K for both the RFB and the taxpayer in analyzing and managing their inventory.

In order to find out whether Bloco K elements will survive the Provisional Measure and which information will have be transmitted to the RFB in the future, the authorities’ next steps have to be shadowed closely.


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!