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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. 

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Author

Gabriel Pezzato

Gabriel Pezzato is a Senior 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).
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