Brazil Introduces New Rules for NF-e Invoices

Although Brazil is known for its complex tax laws that make compliance a difficult task in the country, it is undeniable that the Continuous Transaction Control (CTC) system implemented more than a decade ago is one of the most stable in the world.

However, even a sophisticated CTC system continues to evolve and mature, and as a result legal changes and technical updates happen quite often in Brazil. In December 2020 the Brazilian tax authorities changed the premise for cancellation and correction of NF-es and buyer’s responses.

A closer look at what’s new with NF-e

According to the Agreement SINIEF 44/20, invoices that are connected to factoring transactions can no longer be cancelled. The goal of the Brazilian tax authority is to align invoicing regulations with the banking sector rules that have required NF-es to be associated with discount operations since May 2020.

The new agreement also changed the deadline for two sets of buyer’s responses:

• Events confirmation, non-confirmation or transaction not performed can now be issued up to 180 days after the NF-e has been cleared by the tax authority, rather than the previous 90-day limit.
• The deadline for acknowledgment of an NF-e has been set to ten days after clearance. Before the changes in December, no deadline for such acknowledgment existed. The acknowledgment of an NF-e does not represent a buyer’s reaction to the transaction but instead makes it possible for the buyer to download the invoice’s XML.

When it comes to the correction of invoices, the tax authorities have included two additional conditions that restrict the possibilities for correction of invoices through a Correction Letter (commonly referred to as CC-e), bringing the total number of conditions up to five.

Taxpayers can no longer issue CC-es to modify fields of an NF-e that are cross-referenced in the export declaration (DU-E) or to include or modify sales installments.

Putting these updates into perspective, it goes without saying that Brazilian taxpayers must always be alert of the constant changes in the technical and regulatory landscape impacting the issuance of the many fiscal documents mandated in the country.

Sovos has over a decade of experience in Brazil and our team of experts continually monitor, interpret, and codify the latest changes into our software, reducing the compliance burden on your tax and IT teams.