VAT Number Format In Brazil

Brazilian VAT number contains 8 digits, a 4-digit radical, and 2 check digits (e.g., 0.123.4567/8901-23)

VAT Rates In Brazil

The standard VAT rate in Brazil is from 17-19%, depending on the state, with reduced rates from 4-12% for interstate movement of goods.

• 17% (Standard) – applies to all taxable supplies in the following states: Acre, Alagoas, Ceará, Espírito Santo, Goiás, Mato Grosso, Mato Grosso do Sul, Pará, Piauí, Rondônia, Roraima and Santa Catarina.
• 18% (Standard) – applies to all taxable supplies in the following states: Amazonas, Amapá, Bahia, Distrito Federal, Maranhão, Minas Gerais, Paraíba, Paraná, Pernambuco, Rio Grande do Norte, Rio Grande do Sul, São Paulo, Sergipe, and the Tocantins
• 19% (Standard) – applies to all taxable supplies in the following state: Rio de Janeiro
• 4%, 7%, or 12% (Reduced) – applies to interstate movement of goods depending on the state of destination

VAT Payments And Returns In Brazil

All businesses with Brazilian VAT number (domestic established companies) must submit periodic payments.

VAT Returns Frequency In Brazil

For all companies that operate in Brazil, VAT returns must be submitted monthly.

Penalties in case of late filings or misdeclarations

In the case of the late filing of VAT returns and payments, the Brazilian government prescribed the penalty from 1% to 150% of the tax due. The regular penalty is 75% of the tax due.

The main fields that must be filled in the NFe are:

• Description of products
• NCM (Nomenclatura Comum do Mercosul) – Customs Code Classification and Revision
• CFOP (Código Fiscal de Operações e Prestações) – Fiscal Code of Operations and Services
• Quantity
• Amount
• CST (Código de Situação Tributária)
• Transport data
• Taxes
• Additional information

As one of the strongest countries globally and the strongest in LATAM, Brazil introduced mandatory e-invoicing and mandatory electronic document transmission.

At this moment, there are three (3) electronic documents that are mandatory in Brazil:

• The first one, and maybe the most important, is NF (Nota Fiscal). This document is based on a file in XML format, which must be pre-authorized by the Brazilian Tax Authorities (SEFAZ) before the goods or services are shipped to the customer.
• The second one is the document that is mandatory in B2B relations, NFSe (Nota Fiscal de Serviços Eletrônica) when one company sold goods or services to another company
• The third one is the document that is mandatory for the provision of transport services, CTe (Conhecimento de Transporte Eletrônico)
  

As already mentioned, the essential e-invoicing document in B2C relationships is NF (Nota Fiscal).

According to the mandatory electronic invoicing model, Brazilian Tax Authorities (SEFAZ) must validate an invoice before a supplier sends it to a customer. There is an overview of the real-time reporting process and how does it work:

1. Generation and transmission – sending the electronic invoice in XML format by the seller to the SEFAZ for validation. The seller’s digital certificate, which guarantees the data’s authenticity, must be included in the message.
2. Validation – The SEFAZ will validate the invoice and send the authorization of use to the seller
3. Delivery – a seller, must print a DANFe (a proof which the Brazilian government can use to validate the authenticity of the invoice) and send it to the customer