Brazil Terms & Definitions

June 8, 2016 Karen Marchione

Brazil e-Invoicing and e-Accounting Definitions

Brazil has implemented the most complex and sophisticated electronic invoicing system in the world, completely unlike anything seen in the United States and European Union.  Below we've put together a list of common terms used for compliance in Brazil: 

  • Block K – Monthly inventory and production reports.
  • CCe (Carta de Correção Eletrônica) – Electronic correction letter by the issuer to correct data in the Nota Fiscal. 
  • CNP (Cadastro Nacional de Pessoas Jurídicas) – Brazilian tax identification number.
  • Contingency – The ability to print and ship when external connections and government systems are down.
  • CTe (Conhecimento de Transporte) – Brazil’s invoice format used by third-party logistics providers.
  • DANFe (Documento Auxiliar da Nota Fiscal Eletrônica) – Paper transport authorization linked by bar code to an approved electronic invoice.
  • ENCAT – The agency that manages the technical infrastructure underlying Brazil’s e-invoicing data network.
  • eSocial –  The collection of employees’ tax, social security and labor information, and the reporting of that information to the government.
     
  • Eventos – A term used to describe the “Event Orchestration Process” used by Brazilian tax authorities to verify inbound receipt of authorized invoice transactions.
  • FCI – The importation content file that is required to be submitted on a monthly basis for imported goods.
  • Ghost transactions – Fraudulent orders generated and then “cancelled” by suppliers to facilitate transport of black market goods, a loophole closed by requiring buyer verification of orders prior to shipment.
  • GNRE (Guia Nacional de Recolhimento de Tributos Estaduais) –  A document frequently used by taxpayers that undergo interstate sales. This is a tax collection mechanism created to avoid double taxation and tax evasion during the production of goods and provision of services.
  • ICMS (Imposto Sobre Operações Relativas à Circulação de Mercadorias e Serviços de Transporte Interestadual de Intermunicipal e de Comunicações) – Brazilian indirect tax (VAT) on the sale of goods and services.
  • Manifestacão do Destinatario – Automated messages back to the SEFAZ confirming the awareness of a supplier Nota Fiscal and the accuracy of the goods received. Manifest of reception is required in certain industries and the state of Rio Grande del Sul.
  • MDF-e –  Aggregation document for a truck loaded with multiple CTe’s, also used by companies managing their own shipments or by trucking contractors not affiliated with a larger third-party logistics company.
  • NFe (Nota Fiscal Eletrônica) –  Brazil’s nationally authorized electronic invoice for goods.
  • NFS-e – Service invoices in Brazil, managed at the city level.
  • SEFAZ (Secretaria da Fazenda Estadual) –Brazilian tax authority.
  • Signing Attribute – Information required to prove that an electronic invoice has been approved by the SEFAZ.
  • SPED –  Brazil’s public digital bookkeeping system, where electronic transactions are recorded. Companies are required to file “SPED” accounting reports.
  • XML (Extensible Markup Language) – XML is the required standard schema for electronic invoices.

 

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