Electronic invoicing in Brazil: NF-e, NFS-e and CT-e
The National Council of Fiscal Policy (Confaz) has issued Adjustment Sinief No. 43/2023, which introduces significant changes to the issuance of Electronic Invoices (NF-e).
In Brazil, adopting e-invoicing has been critical to revamping the tax system and streamlining business transactions between companies. The electronic invoice in Brazil comprises several types of digital documents, each designed to cover different transactions and tax obligations.
The main e-documents used are the Nota Fiscal Eletrônica (NF-e), the Nota Fiscal de Serviços Eletrônica (NFS-e), and the Conhecimento de Transporte Eletrônico (CT-e).
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Nota Fiscal Eletrônica (NF-e)
The NF-e is the electronic equivalent of a traditional physical invoice. It is a digital document issued and stored electronically that records the sale of goods between companies.
To issue an NF-e, companies must use issuing software authorized by the Ministry of Finance and digitally sign the document with a valid digital certificate. The NF-e guarantees the authenticity and integrity of the transaction, expediting compliance with tax obligations.
In Brazil, the NF-e electronic invoicing system has revolutionized the way companies issue and manage their invoices. The system generates, transmits, and archives bills electronically, doing away with the need for physical documents and streamlining information flows.
The NF-e is an electronically issued and stored XML document designed to document the circulation of goods or services between the parties supplying and demanding them in the different states of Brazil. It is sent by webservice to the SEFAZ tax authority which validates it and issues an authorization, informing the issuing company. At this point, with the authorized NF-e, the issuing company may emit the DANFE (NF-e auxiliary document), a shipping report related to the authorized fiscal note that must accompany goods during transport.
The authorized NF-e is sent to the customer and acts as an official invoice detailing the commercial transaction between buyer and seller.
The fiscal and legal validity of the NF-e is guaranteed by the digital signature of issuer and receiver and by its validation by SEFAZ as a step prior to the business transaction.
Changes to Electronic Invoice Issuance
The National Council of Fiscal Policy (Confaz) has issued Adjustment Sinief No. 43/2023, which introduces significant changes to the issuance of Electronic Invoices (NF-e). Effective August 1, 2024, the denial event will be replaced by the rejection event. Invoices that were denied due to registration inconsistencies blocking the State Registry can no longer be corrected, cancelled, or voided.
This change requires businesses to be more vigilant to avoid future issues. With the elimination of the denial event, any irregularity in the State Registry will now result in the rejection of the NF-e. This includes tax debts and non-compliance with regulatory obligations.
Although Adjustment Sinief No. 43/2023 mandates the elimination of the denial event starting August 1, 2024, its actual implementation will begin on September 2, 2024, as per Technical Note No. 2024.001. This allows businesses extra time to adjust to the changes.
Procedure to Generate and Validate an NF-e:
- The XML file is signed with a digital certificate.
- The e-invoice is transmitted to SEFAZ by webservice.
- SEFAZ puts together a pre-validation file and returns an 'authorization of use' to move the goods.
- To legally cover the cargo transit, the company prints the DANFE auxiliary document on plain paper.
- Although generated electronically and validated electronically by SEFAZ, the extremely important DANFE must be sent physically with the goods in paper format as they move around the country.
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Nota Fiscal de Serviços Eletrônica (NFS-e)
The NFS-e is the electronic equivalent of a utility bill. It is used to record service transactions between companies and self-employed professionals. Like the NF-e, the NFS-e is issued and stored electronically, using software authorized by the tax authority.
The NFS-e helps simplify taxation related to services rendered and provides a digital record of business transactions.
New National Standard for Service E-Invoicing in Brazil
The scenario in relation to the NFS-e is characterized by the wealth of standards and requirements created by each municipality, given their autonomy in preparing procedures for the collection of the Tax on Services of Any Nature (ISSQN).
Each city has developed its own requirements to meet its specific needs. This has caused problems and difficulties for NFS-e issuers operating across many different cities, as they have had to pivot their systems to each municipality's standards, designs, and other requirements.
The creation of the Convênio NFS-e on June 30, 2022, signed by the Receita Federal Brasileira (RFB) internal revenue service, the Confederação Nacional dos Municipios (CNM) national confederation of municipalities, and other relevant associations, established the NFS-e National System with the objective of creating a nationwide standard throughout the country.
The most relevant system features include:
- Web-based Public Issuer: Option to generate the NFS-e via a web portal, easily and free of charge.
- Mobile Public Issuer: Simplified version of the web issuer, available for mobile applications.
- Issuance via API: Possibility of connectivity of the taxpayers' business systems with the servers of the National Finance Secretariat (SEFIN), tasked with approving the NFS-e.
- Declaração de Prestação de Serviço (DPS): The previous document sent to SEFIN for approval and conversion into an NFS-e. (Replaces the concept of Provisional Service Receipt (RPS), currently in force in the issuance of local NFS-e notes).
- Nota Fiscal de Serviço Eletrônica (NFS-e): Document of digital existence, used to document service transactions.
- NFS-e Events: Possibility of recording events in an already authorized NFS-e, such as cancellation, substitution, and correction letter, among others.
- Documento Nacional de Arrecadação (DNA): ISSQN tax collection document valid for all municipalities engaging in the system.
- Ambientes de Dados Nacional (ADN): National repository of NFS-e documents approved in the system.
- Portal da Nota Fiscal de Serviço Eletrônica: Environment for querying generated documents, among other system queries.
In addition to the features mentioned above, municipalities can sign up to different modules after signing an interest in adoption agreement (municipalities are free to join the system or not), choosing the ones that interest them most. One exception is the Ambientes de Dados Nacional (ADN), which is mandatory.
The NFS-e issued in the system can also be shared with the parties involved in the process (municipality, service policyholder, service provider, accountant, etc.)
Another important aspect of joining the ADN is that if a given municipality does not want to stop its local NFS-e issuance process, it can continue working in this way by committing to send the received and approved NFS-e of its taxpayers to the ADN, allowing local taxpayers to continue issuing their NFS-e documents in a single standard.
The implementation of the National NFS-e System will follow 4 mandatory phases and one voluntary phase:
- Sign and return the sign-up form.
- Configure the Municipal Administration Panel website.
- Choose and use products.
- Adapt local legislation to the national standard.
- Adapt local infrastructure to the national standard. (optional)
- Due to the significant benefits, cities such as São Paulo, Salvador, and Florianópolis have already joined the project, making it possible to unify and rationalize the diversity of current systems for issuing utility bills throughout the country for better process management and control by the parties involved.
NFS-e update in Brasilia
The issuance of NFS-e documents in Brasilia was modified on January 1, 2023.
Previously, taxpayers who had to issue invoices for services and products in Brasilia could do so by using the NF-e, a fiscal note for both types of business operations within the federal district. This was not the case for the other municipalities in the country, where two models had to be issued: the NFS-e for invoicing services and the NF-e for invoicing products. The first is sent to the local council of the city where the company is located and the second to SEFAZ.
How is the NFS-e now issued in Brasilia?
The Ministry of Economy of the Federal District announced it would implement the Tax Services Management, Auditing, and Collection System (ISS) starting November 1, 2022. With the change, a proprietary NFS-e model was introduced. The new system would allow the issuance of NFS-e documents online or via webservice.
The NFS-e would be issued with the XML standard. Webservice communications with Brasilia City Hall would use version 2.04 of the national standard of the Brazilian Association of Capital Finance Secretariats (ABRASF), with the objective of standardizing communications between taxpayers and municipalities through a single NFS-e standard.
Conhecimento de Transporte Eletrônico (CT-e)
The CT-e is an electronic document used to record the transport of goods. It is mandatory for freight forwarding and logistics companies operating in Brazil. The CT-e facilitates the traceability and control of transport operations, enabling tax authorities to verify the legitimacy of transactions and ensure compliance with freight transport regulations.
CT-e XML 4.0 version approved in Brazil
The Conselho Nacional de Política Fazendária (CONFAZ), through ATO COTEPE 123 of December 6, 2022, approved the new Manual de Orientações do Contribuinte, which entails the adoption of the new version 4.0 of the XML CT-e.
The CT-e is an electronic tax document used to record the transport of goods.
The CT-e update will impact companies issuing and receiving CT-e, CT-e OS (Conhecimento de Transporte Eletrônico Outros Serviços), and GTVe (Guia de Transporte de Valores Eletrônica) documents.
Changes in the new CT-e XML version 4.0 - The main changes introduced by the new CT-e XML version 4.0 are:
- Consolidation of the technical notes of MOC 3.00b
- SOAP header removal from webservices
- Elimination of Denial and Cancellation CTe notes
- Elimination of the Asynchronous Authorization Service
- Expansion of the Sequence of Events Number
- Elimination of the Disablement service
The test environment established by SEFAZ has been operational since April 2023 for companies wishing to join. The production environment has also been available as of June 2023 to carriers wishing to issue their CT-e in the new format.
Benefits of E-invoicing in Brazil
Electronic invoicing in Brazil, through NF-e, NFS-e, and CT-e, offers a number of benefits for companies:
- Cost reduction: Elimination of costs associated with printing and storing physical documents.
- Streamlining and efficiency: Automated processes that reduce the time spent managing tax documents.
- Fiscal control: Greater transparency and compliance with tax obligations.
The adoption of electronic invoicing in Brazil has been an important step toward the digitalization and modernization of the country's tax system. It facilitates business transactions and promotes a more efficient and competitive business environment.
EDICOM: Integrated solution for issuing and receiving NF-e, NFS-e, and CT-e documents
EDICOM is a technology partner specialized in Electronic Data Interchange (EDI) and Electronic Invoicing solutions. It is distinguished by its adaptability, offering custom solutions for any global requirement. This agility is the upshot of the effective change management that allows us to pivot ably to each client.
Our international e-invoicing platform implements dedicated features to integrate your management and accounting systems to the local requirements of each country where we operate. Simplify and streamline e-invoice issuing and receiving with a global provider that leverages integration, syntactic validation, legal validation, and document retention.
Advantages of the EDICOM International Compliance Platform
Deliver on the requirements of government agencies in the countries where you operate from a single integrated platform. EDICOM offers solutions to simplify and streamline the issuance and receipt of electronic invoices, ensuring compliance with tax regulations in each jurisdiction.
- Integration: Our integration solution is designed to connect directly to your company's ERP, allowing accurate mappings that automatically translate the information generated in the system to the electronic format required by each tax authority. This includes the generation of documents in XML, UBL, SAF-T, and other standards, ensuring efficient data transition.
- Security: After the initial validation, we apply a series of mechanisms to guarantee the legal value of the electronic messages. This involves the use of advanced electronic signatures, time validations, and other certificates necessary for the legal recognition of documents. We prepare each document for shipment accurately and securely.
- Validation: Data is subjected to rigorous syntactic and semantic validation processes to ensure it complies with the specifications and regulations of the destination country. This guarantees that documents are correct and accurate before being submitted to the competent authorities.
- Connectivity: Our platform efficiently handles the sending of messages to tax authorities and final recipients, using the appropriate protocols for each type of transmission (Webservice, AS2, HTTPS, FTP, etc.). We guarantee data security and integrity across the communication process.
- Archiving: VAT books and notifications are archived in our electronic storage systems, designed to ensure long-term document integrity and security. We comply with legal retention requirements and provide prompt and secure access to records when necessary.
- User Environments: We offer multiple user environments tailored to the specific operations of each country where your company operates. This customized approach ensures an efficient experience compatible with local requirements across different jurisdictions.
For more on electronic invoicing in Brazil, please reach out to our sales team:
