Brazil Implements New E-Invoice Type NF3e

Gabriel Pezzato
October 17, 2019

Brazil is often viewed as one of the most complex tax jurisdictions in the world.  But, at the same time, it has been very successful in automating tax authority controls, and in doing so has replaced paper invoices with electronic invoices automating their exchange through clearance platforms. While the ambitious Brazilian plans to simplify the underlying tax system over its federal structure do not seem imminent, the relevant Brazilian authorities keep reinforcing the country’s engagement in automating tax controls.

Introducing NF3e

Companies operating in Brazil are used to the sea of acronyms surrounding their tax and legal departments, including NF-e (goods invoice), NFS-e (service invoice), CT-e (transport invoice), among many others. More recently, this already extensive list gained one more component: the NF3e – the e-invoice for the supply of electricity.

Like the NF-e, the NF3e is a document issued electronically and whose validity is ensured by the electronic signature of the issuer, as well as by the authorization protocol issued by the tax authorities. Another similarity with the NF-e is that a graphical representation of the NF3e may be created – the DANF3E – which is the NF3e equivalent to the DANFE of the NF-e.

Introduced in July, the NF3e is expected to replace the paper invoice issued by electricity suppliers in Brazil but the production environment was only made effective in October. Nevertheless, it remains up to each State to decide if it wishes to make the NF3e mandatory, thereby completely replacing the previous paper version of electricity bills. Therefore, it’s important to follow the deployment at a State level to understand how this requirement should be applied.

The potential obligation to make the NF3e mandatory for all taxpayers may not be limited to only electricity suppliers. Environment-friendly companies generating solar energy with photovoltaic panels may also be impacted when they inject electricity to distribution lines under a compensation schema. Similarly, whilst most companies with operations in Brazil are electricity customers, a mandate may be reflected in the businesses’ need to receive and archive NF3e.

The NF3e is an important step in the consolidation of a total-clearance model in Brazil, which started in 2005. Beyond the legislative network, companies with business in the country must always be aware of the digital appetite of the Brazilian tax authorities and seek solutions for technical challenges. 

Take Action

To read more about what we believe the future holds, download Trends: e-invoicing compliance and join our LinkedIn Group to keep up to date with regulatory news and other updates.

Sign up for Email Updates

Stay up to date with the latest tax and compliance updates that may impact your business.

Author

Gabriel Pezzato

Gabriel Pezzato is a Regulatory Counsel at Sovos. Based in Stockholm and originally from Brazil, Gabriel’s background is in tax, corporate and administrative law. Gabriel earned a Law degree and a specialization degree in Tax Law in his home country and has a master’s degree in International and European Tax Law from Uppsala University (Sweden).
Share This Post

LATAM VAT & Fiscal Reporting
May 20, 2020
Sovos Acquires Taxweb, Extends Tax Determination Capabilities in World’s Most Challenging Compliance Landscape

Earlier this month Sovos announced its second acquisition of 2020, completing our solution for Brazil with an unparalleled offering that solves tax compliance in the place where it is most challenging to do so.  Too many companies doing business in Brazil have been burdened by managing multiple point solutions for continuous transaction controls (CTCs), tax […]

ShipCompliant
July 13, 2020
How Importers Can Ship DtC

The beverage alcohol industry has many complicated rules and regulations that vary by state. Even though importers are similar to other members of the “supplier” tier (like wineries and breweries), they are often treated differently in federal and state regulations. This is particularly true when it comes to direct-to-consumer (DtC) wine shipping.  Currently, 46 states […]

ShipCompliant United States
July 9, 2020
3 Sessions, Many Takeaways: Wine Summit Piccolo Event Recap

Sovos ShipCompliant hosted the 15th annual Wine Summit a couple weeks ago, only this time it was a shortened “Piccolo” virtual version. This half-day event featured some of the most popular sessions and presentations originally scheduled for the cancelled live event back in May. The recorded version of the event is available to watch on-demand; […]

EMEA Tax Compliance VAT & Fiscal Reporting
July 9, 2020
Tax IDs and List Checks: The New Trend

VAT gaps can generally be found in countries that collect indirect taxes. This hiatus has led many tax administrations to implement Continuous Transaction Controls (CTCs), through which transactional and accounting data are monitored in real-time or near real-time. However, even countries with sophisticated CTCs may encounter fraud involving missing traders and non-existent supplies. This creates […]

Tax Information Reporting United States
July 8, 2020
The Industry Leader in Tax and Regulatory Reporting

Last year, Sovos promised insurers we would Solve Tax for Good®. A year later, we have helped thousands of insurers ease the burden and risk of modern tax and regulatory compliance. We have kept our promise by helping insurers stay ahead of the Tax Cuts and Jobs Act, SECURE Act and all other tax and […]

EMEA IPT
July 8, 2020
The Changing Landscape for European Captives and the Challenges Ahead

Over recent years, the number of insurance captives domiciled in Europe has stagnated, if not fallen.  Against this backdrop, the challenges faced by captives across the region are rising and in particular, following the COVID-19 pandemic. A specialized market in restricted jurisdictions Europe is the third largest insurance captive domicile in the world having around […]