Brazil Launches EFD-REINF for Tax Withholdings

Update: 2 March 2023 by Kelly Muniz

Postponement of EFD-REINF Deadline for Events Referring to Withholding IRPF, CSLL, PIS and COFINS

The publishing of Normative Instruction RFB n. 2.133, of 27 February 2023 postpones the deadline of the obligation to submit EFD-REINF (Digital Fiscal Record of Withholdings and Other Fiscal Information) events related to withholding:

• IRPF (Personal Income Tax)
• CSLL (Social Contribution on Net Income)
• PIS (Social Integration Program)
• COFINS (Contribution for the Financing of Social Security)

This postponement refers to taxpayers who are currently obliged to submit the DIRF (Withholding Income Tax Return) and were required to comply with the EFD-REINF obligation from March 2023.

The obligation to submit the EFD-REINF for these taxpayers will now begin from 8:00 am on 21 September 2023, in relation to taxable events that occur from 1 September 2023.

The postponement is to allow time for taxpayers to carry out adjustments to their computerised systems and for the Brazilian Federal Revenue Agency to finalise the necessary tests to guarantee the consistency of the rules for validating the information captured in the record.

Need to discuss how Brazil’s EFD-REINF changes affect your business? Speak to our tax experts.

Update: 25 October 2022 by Kelly Muniz

Changes in EFD-REINF Reporting

Since 2007, the Brazilian government has imprinted high efforts in digitizing the relations between revenue offices and taxpayers, by introducing electronic instruments to ensure taxpayers provide accurate and timely information on the collection of the various existent taxes, duties, charges, and contributions.

One result of such efforts was the creation of the Public Digital Bookkeeping System (Sistema Público de Escrituração Digital) or SPED. This platform is where taxpayers submit fiscal and accounting information using different electronic instruments referred to as SPED modules.

There are significant upcoming changes to one of the modules, the Digital Fiscal Record of Withholdings and Other Fiscal Information (Escrituração Fiscal Digital de Retenções e Outras Informações Fiscais), known as EFD-REINF.

The latest regulatory updates within this module concern steps towards the substitution of other records by the EFD-REINF, with important changes taking place in 2023.

Main changes in the EFD-REINF

In August 2022 version 2.1.1 of the EFD-REINF layout was introduced, expanding the reach of events covered by the record. The current 1.5.1 version is valid until February 2023 and from March 2023 layout version 2.1.1 must be used.

The main change is the inclusion of the ‘R-4000’ series events. These events cover the registration of withholdings on income tax (IR), Social Contribution on Net Income (CSLL), Social Integration Program (PIS), and Contribution to the Financing of Social Security (COFINS), among other fiscal contributions.

Another relevant change is the removal of the requirement to submit the EFD-REINF ‘without movement’. Previously, only a certain group was permitted for this exemption if they didn’t generate any records to be reported in the respective declaration period but this has now been expanded to all taxpayers in scope of the EFD-REINF.

New obliged taxpayers

Earlier this year, RFB Normative Instruction n. 2.096 of 2022 postponed mandatory submission of the EFD-REINF for the fourth and last group of taxpayers: entities that are part of the ‘Public Administration’ and entities classified as ‘International Organisations and Other Extraterritorial Institutions’. Since August 2022 this group is now obliged to comply.

However, the same regulation established that from 1 March 2023 taxpayers currently obliged to submit the DIRF (Withholding Income Tax Return) will be required to comply with the EFD-REINF obligation. This is an extensive list found in article 2 of RFB Normative Instruction n. 1.990 of 2020, which includes individuals and legal entities that have paid or credited income for which Withholding Income Tax (IRRF) has been withheld and certain entities of the Federal Public Administration, among others.

Finally, the annual submission of the DIRF will be abolished regarding events that occur from 1 January 2024, meaning that taxpayers won’t be required to submit it in 2025. Until then, the information declared in the DIRF and EFD-REINF will coexist.

Compliance challenges

Keeping up with the mosaic of fiscal requirements within the federal, state, and municipal levels in Brazil normally requires engaging the services of an expert or risk incurring high penalties. Modifications to fiscal obligations are implemented regularly in the country, which means companies must ensure readiness to comply.

Still have questions about Brazil’s EFD-REINF? Speak to our tax experts.

Update: 9 July 2018 by Ramón Frias

What is EFD-REINF?

A complement to eSocial (which covers tax withholdings on wages), EFD-REINF reports withholdings made to individuals and corporations resulting from the application of the income tax and social security taxes (CSLL, INSS COFINS, PIS/PASEP). It also applies to payments received by sport associations and revenues generated by sport events.

EFD-REINF replaces reporting obligations that the Brazilian taxpayers have to comply with under the EFD-Contribucoes.

Who must comply?

• Legal entities:
  • That provide and contract outsourcing services in accordance with art. 31 of Law No. 8,212 of July 24, 1991
  • Who are responsible for withholding the social security taxes PIS/Pasep, the Cofins and the CSLL
  • Opting for payment of social security contribution on gross revenue (CPRB)
• Entities considered rural producers and agro-industries when subject to substitutive social security contribution on the gross revenue from the commercialization of rural production
• Sports associations that have professional soccer teams receiving revenues related to sponsorship, licensing of use of brands and symbols, marketing, advertising and broadcasting of sports shows
• Sponsors that provide resources to those sports association
• Entities marketing any sport event held in Brazil, involving at least one sport association that owns a professional soccer team
• Entities and individuals that have paid or credited income on which the federal income tax has been withheld by themselves or as representatives of third parties

How is the EFD-REINF structured?

There are three groups of reports, or “events,” that must be submitted to the tax administration:

• Table Events (Eventos de Tabela): Intended to optimize and validate the information that identifies the taxpayer and some administrative and legal processes that may affect them (if they exist).
• Non-Periodic Events (Eventos Não Periódicos): Information related to transactions that do not occur on a regular basis and therefore should only be reported when they occur.
• Periodic Reports (Eventos Periodicos): Events related to periodic information that should be reported on a regular basis by the taxpayer. These include:
  • Withholdings for Social Security tax for services received
  • Withholdings for Social Security tax for services provided
  • Revenues received by sport associations
  • Revenues Transferred by sport associations
  • Social Security tax on gross receipts
  • Withholding taxes (IR, CSLL, Cofins, PIS/PASEP)

When does it go into effect?

The EFD- REINF is being rolled out in three stages.

• May 1, 2018: Companies with revenues greater than 78 million Real annually
• November 1: Companies with revenue less than 78 million Real
• May 1, 2019: All public entities

What are the penalties for non-compliance?

Events that are incomplete, or reported with errors, will a face fines totaling 3% of the amount involved, with a minimum of $100 Real in the case of legal entities, and half of the above amounts when the taxpayer is an individual. Fines for late reports will range between from $500 Real to $1,500 Real per month or fraction of month.