Understanding The Complexities Of SPED Obligations For Taxes In Brazil

Author:Ms Stacey Palker
Profession:TMF Group

Brazilian businesses have a very high tax burden with complicated obligations that are constantly changing. These obligations are part of a specialized digital system in Brazil called SPED.

Companies in Brazil must comply with SPED, Sistema Público de Escrituração Digital, which translates to the Public System of Digital Bookkeeping. This system was created to standardize and modernize the tax administration in Brazil and to replace paper copies of invoices and tax records. While the system was implemented 2008, it is constantly evolving with new obligations for tax payers and businesses that can be very complex.

SPED in Brazil

The SPED system is a technological universe that collects all financial, accountant, tax and labour information from Brazilian companies. SPED is composed of 12 modules, with 7 ancillary obligations and 5 different fiscal documents. Having all the information in one place makes it easier for tax authorities to notice any tax evasion or criminal activity by companies.

The five fiscal documents of SPED are electronic invoices that all serve different purposes:

NF-e: a digital document that validates the operation and benefits of commercial transactions through the use of digital signatures from both the issuer and the tax administration NFS-e: electronic fiscal invoices for goods and services CT-e: a digital document for the rendering of cargo transportation services requiring digital signatures as well NFC-e: an e- invoice for consumers that are typically a natural person and not a company MDF-e: an electronic tax manifest. The seven ancillary obligations are:

eSocial: a program to streamline HR and payroll in order to submit all the employee information on a monthly basis ECD: the digital accounting bookkeeping documents which are delivered once a year before May 31st ECF: this is the digital tax return that was created in 2014 which are delivered once a year before July 31st EFD: Contrubuicoes: this is a monthly obligation of reporting digital tax documents to the federal tax authorizes (PIS and Cofins) EFD-ICMS/IPI: this is a monthly obligation of reporting digital tax documents to the state tax authorizes (CISM and IPI) EFD-ReInf: digital bookkeeping and monthly reporting of withholdings and information on Social Security contributions e-Financeira: this a compliance obligation for banks. The newest ancillary obligation for businesses in Brazil increases the scope of validation of withholding taxes...

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