Regulations to introduce the new dual VAT regime under the tax reform bill
The Brazilian government presented to Congress regulations to introduce the new dual value added tax (VAT) regime under the tax reform bill. Among modifications brought by the new regulations, both residents and nonresidents doing business in Brazil will need to adapt to the ancillary changes pertaining to compliance—such as the new indirect tax liabilities for nonresident sellers or digital platforms. Read TaxNewsFlash
To Brazilian taxpayers, changes in compliance will surround the way electronic invoices and digital compliance are issued—remarkably regarding additional sets of data pertained to the new dual VAT regime corollary of the tax reform, which will replace the existing multi-jurisdiction level system.
To that end, the Brazilian government has published the initial set of changes associated to electronic invoices for goods issued by local taxpayers. The Technical Note NT 2024.002 on its version 1.00 outlines new groups of fields that will be required to be informed in the electronic invoices of goods (NF-e model 55) and electronic invoice of goods to final consumer (NFC-e model 65). It also published the SE/CGNFS-e nº 001 that outlines adjustments to the layout of the electronic invoice for services (NFS-e) in light of the consumption tax reform
Specific fields containing information about the following taxes were added to the current layout of the electronic documents:
Additionally, new validation rules for the new fields and rejection messages were introduced. Those rules will be used by the local authorities as part of the existing data and structure analysis to determine the approval or rejection of each document issued.
Conscious that both taxpayers and tax authorities from the various states will need to prepare their systems to incorporate the new structure and rules, the expected implementation timeline will be as follows:
Despite of the publication of NT 2024.002 and Technical Note SE/CGNFS-e nº 001, discussions pertaining to the Brazilian tax reform are still ongoing and therefore the changes brought by these technical notes can be updated by the government to align with the additional mandates yet to be published or other technical issues considered by the tax authorities to adapt the Brazilian electronic invoicing system to the new indirect tax reform.
Paula Pignatti Smith | ppsmith@kpmg.com
Atila Vaccaro Pidoni Mota | atilamota@kpmg.com