Brazil pioneered e-invoicing in Latin America, and issuing and receiving electronic invoices is compulsory. The country operates an advanced clearance electronic invoicing model, where suppliers must submit e-invoices to the tax authority to be cleared before issuing them to a client.
Brazil’s e-invoicing system is complex, as it uses different systems depending on the product category, and penalties apply for non-compliance.
To avoid penalties (and reduce attendant supply-chain interruptions and audit risks), companies doing business in Brazil must understand the e-invoicing requirements and ensure compliance.
This guide will help you understand the electronic invoice requirements in Brazil, including how to send compliant e-invoices and what your business can do to be fully compliant.
Is e-invoicing mandatory in Brazil?
In Brazil, e-invoicing is mandatory for all taxable persons supplying goods and services. Every taxpayer who does business in Brazil and issues invoices is legally required to use the electronic invoicing system.
Not issuing an e-invoice or issuing one that does not meet the legal and technical requirements will attract a penalty of 100% of the invoice value or transaction price. The defaulter may also face prosecution for the criminal offense of tax evasion.
What are the e-invoicing rules in Brazil?
The first e-invoicing legislation in Brazil was postulated in 2005, but e-invoicing became mandatory in the country in 2008.
Brazil uses an authorization-based e-invoicing model requiring the country’s tax authorities to receive and clear an electronic invoice before a supplier can issue it to a client.
The electronic invoicing system was introduced to improve efficiency and transparency in commercial transitions and reduce tax fraud.
Thus, to do business in Brazil, you must submit electronic invoices. First, you must send the electronic invoice to the tax authority for clearance. Only after it is cleared/ authorized should you proceed with the transaction.
However, Brazil operates a complex clearance e-invoicing model, requiring using a different system depending on the product category.
That is, the e-invoicing system suppliers must use depends on whether they’re invoicing for goods, services, etc.
Here are the different types of electronic invoicing for various services:
- Invoicing for goods - Nota Fiscal Eletrônica(NF-e)
- Invoicing for services - Nota Fiscal de Serviós Eletrônica (NFS-e)
- Invoicing for transport services - Conheçimento de Trasporte Eletrônico (CT-e)
- Invoicing for freight services - MDF-e, SPED, REINF
- Invoicing for electricity supply - NF3e
Having different e-invoicing systems is one thing that makes Brazil's e-invoicing model complex. Adding to the complexity is the fact that regulations are often regional (state-wide and even municipality level).
For example, NF-e invoices for transactions involving physical goods follow the same framework throughout the country regardless of where they originate or the destination of supply.
However, NFS-e invoices involving services are taxed at the municipality level, and the NFS-e requirements vary by municipality.
To reduce the complexity of the model, the government of Brazil is seeking to implement a national standard for service e-invoices.
The country will have a national system of the NFS-e (SNNFS-e) instead of having different municipalities with different e-invoicing standards.
Harmonizing NFS-e invoices creates a centralized portal for participants to register invoices. The system also introduces a national repository for all NPS-e invoices called the National Data Environment (NDE).
While other service companies are legally required to comply with these requirements, the deadline for small and unincorporated taxpayers (companies) has been delayed from 3 April to 1 September 2023.
How to send compliant e-invoices in Brazil?
Sending compliant e-invoices in Brazil differs depending on whether you are a supplier of goods and services.
Here is how:
Sending NF-e invoices
To send compliant NF-e invoices for the supply of physical goods, the steps are as follows:
- Apply for a digital signature from your regional certified issuer: You’ll be given an invoice generation key when you apply for a digital signature.
- Generate an invoice in XML format: This contains the fiscal information of the transaction. The invoice must be signed with your unique digital signature.
- Submit the invoice to your regional SEFAZ (Secretaria da Fazenda Estadual) via web service: The SEFAZ clears and authorizes it as an NF-e. You’ll get a unique authorization code to include in the NF-e invoice and your ERP. You may then dispatch the goods.
- The NF-e is also transmitted to the Federal Revenue Service (Receita Federal do Brasil - RFB): The EFB operates the national repository for all e-invoices issued in Brazil - Ambiente Nacional.
- Send goods with shipment note: When moving the goods across Brazil, they must be accompanied by a shipment note called DANFE (Documento Auxiliar da Nota Fiscal Eletrônica). This shipment note contains the NF-e access key allowing its holder to confirm the existence of the NF-e invoice on the SEFAZ or RFB website.
- Send invoice to customer to validate: After delivering the goods, you must send the NF-e invoice to the customer for them to validate and approve. Their approval completes the invoice creation process.
Sending NFS-e invoices
To send compliant NFS-e invoices for the provision of services, the steps are as follows:
- Issue a provisional receipt for services: Issue a provisional receipt for services (Recibo provisório de serviços - RPS). You may prepare the RPS manually or via web service.
- Send the RPS: Send the RPS (in batches) to the Secretariat of the municipality for processing the NFS-e. You’ll receive a receipt protocol number as proof of sending an RPS batch.
- Get your authorized NFS-e invoice: The Secretariat will place your RPS batch in a processing queue and attend to it accordingly. To validate the RPS, the Secretariat will check that the invoice is authentic and that the supplier has complied with tax regulations. After processing, you’ll get your authorized NFS-e invoice. If your RPS batch contains errors, the system will return a list of errors found. You may then correct them and resubmit for authorization.
- Submit the NFS-e: The NFS-e must be submitted to the municipality (prefeitura) where the service is invoiced from.
- Send to the customer: Send the NFS-e invoice to the customer for validation and approval.
Characteristics of the electronic invoice in Brazil
The Brazilian e-invoicing landscape features are as follows:
- E-invoicing model: Pre-clearance
- E-invoicing infrastructure: SEFAZ (Secretaria da Fazenda Estadual)
- E-invoicing format: Different XML structures based format (NF-e, NFS-e, CT-e, MDF-e)
- E-signature: Mandatory
- Archiving: 5 years
Brazil operates a pre-clearance e-invoicing system, meaning the supplier must submit the invoice to the tax authority for clearance before it can be issued to the customer.
It is mandatory for all suppliers in Brazil to send e-invoices via the system. It’s also mandatory for all buyers to receive cleared electronic invoices.
Thus, whether your business is issuing an invoice to another company or a final consumer, you should use the electronic system.
E-invoicing in Brazil is controlled by the tax authority SEFAZ (Secretaria da Fazenda).
The 26 states and one Federal District making up Brazil are covered by thirteen State Tax Offices (Secretaria da Fazenda Estadual - SEFAZ).
Each SEFAZ provides e-invoicing web services to registered taxpayers in the state under their jurisdiction.
Brazil uses different electronic invoice formats depending on the goods or services invoiced. These include NF-e for goods, NFS-e for services, CT-e for the transport of goods.
The tax administration recently launched a new invoice format for the supply of electricity (NF3-e).
These electronic invoices are all in XML format but with different structures.
Brazil requires that all e-invoices must be digitally signed before submitting them to the appropriate tax authority for authorization.
The e-signature, which must be in an XMLDsig format, can be signed using a digital certificate obtained from a certification authority certified by Infraestructura de Claves de Públicas (ICP Brasil).
The e-signature ensures the data's integrity and the issuer's authority.
According to Brazilian tax law, e-invoices must be electronically stored for at least five years.
Any DANFE document that accompanied the goods when moving them must also be stored (in case of issues with the SEFAZ-authorized invoice itself).
What should businesses do to comply with e-invoice regulations in Brazil?
To prepare your business for e-invoice compliance in Brazil, you should do the following:
- Get familiar with all regulations regarding e-invoicing in Brazil.
- Ensure you use the correct e-invoice type determined by your business segment (goods, services, freight, etc.).
- Ensure that your invoices are structured according to relevant standards.
- Ensure that your invoices contain all the required information
- Maintain appropriate internal controls to ensure accurate transmission of e-documents.
- Monitor updates in e-invoicing regulations in Brazil.
Takeaway: Ensure e-invoicing compliance in Brazil with Storecove
E-invoicing in Brazil is mandatory for 100% of taxpayers. If you do business in Brazil, you must invoice electronically.
While e-invoice implementation in Brazil is advanced, the invoicing model is complex, as there are different systems depending on your sector.
Staying compliant in the face of disparate local requirements can be challenging.
The best way to comply with the e-invoicing requirement in Brazil is to use a service provider like Storecove.
Storecove provides electronic invoicing services worldwide, helping people comply with relevant e-invoice regulations in countries where they do business, including Brazil.
With Storecove, you get one integration for your global e-invoice needs. The service ensures your invoice meets technical and legal requirements, is transmitted to the right tax authority for authorization, and is safely transmitted to your customer.
Schedule a demo for your e-invoicing solution.
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