Brazil’s eInvoicing and electronic reporting measures are undergoing a major overhaul in 2018. Companies that are not already in compliance with the new eInvoicing schema, NFe version 4.0, and REINF, a new digital bookkeeping requirement, need to update their processes immediately, as the deadlines for each are imminent.
The new specifications for Brazil’s eInvoicing schema, version 4.0 of Nota Fiscal (NFe) went live in 2017, and the old version will be completely sunset as of July 2, 2018. This mandate, announced by Brazil’s tax authority SEFAZ, is intended to improve the quality of information and data accuracy provided by companies to the SEFAZ.
NFe 4.0 is the country’s first new release of its eInvoicing schema in two years and ushers in a completely new set of requirements. The major changes under NFe 4.0 include updates to web services, new fields for shipping information, new calculations to line item poverty fund contributions and new fields to identify payment methods (check, cash, credit card).
While all companies operating in Brazil will be impacted, the update specifically affects key industries, including:
- Sanitary products – batch number, quantity, production data and expiration date will all have to be added for additional insights in the event of a recall.
- Oil and gas – additional fields, codes and calculations are required for energy companies.
- Medical and pharmaceuticals – new fields must be submitted to supply the National Health Surveillance Agency (ANVISA) with added information.
In addition to NFe 4.0, the SEFAZ published new legislation establishing the Digital Tax Accounting of Tax Withholdings and Supplementary Social Security Contribution Information (EFD-REINF), which comprises all tax withholdings levied by service companies, including information related to social security contributions. This legislation officially goes live on May 1, 2018 for companies with revenues greater than R$78M (~USD$24M), and all other companies, must be prepared and ready to implement REINF by November 1, 2018.
It’s important to note that REINF carries a heavy penalty, as its transmission is responsible for the generation of tax credits. Since REINF requires real-time validations from the tax authority, if a filing is neglected or an error is made, tax refunds and credits will be delayed or missed, disrupting cash flow.
To comply with both mandates, all companies operating in Brazil should identify and implement a proactive solution that not only meets all the necessary requirements to avoid fines, penalties or operational disruptions, but also that enables efficiencies and opportunities within these mandates.
Both mandates will strongly impact IT and business teams, so it’s important companies ensure compliance in order to avoid business interruptions and shutdowns. For questions and additional information on NFe and REINF, or to learn more about how Sovos’ solutions can help your business stay compliant, please contact us today.