2023: what changes on the accounting, tax and labor fronts for companies

By Adriana Costa and Marcelo Lima

Keeping up with the legislative changes that affect business is often one of the most challenging tasks that entrepreneurs need to undertake. Year after year, important changes are made to the legal requirements that companies must comply with.

Therefore, it is crucial to always keep a close eye on the changes that are likely to affect accounting, tax and labor-related practices and might impact business competitiveness as a result.

We have listed below a few important changes that will be taking effect as of 2023 based on already approved regulations, especially with regard to compliance with ancillary obligations, which are bound to impact companies as a whole:

eSocial

Login through gold and silver gov.br accounts

As of February 13, gold and silver-level accounts will be required from users so that they are able to log into the gov.br portal to report all labor-related events (hirings, job terminations, vacations, lay-offs, changes to contract terms and registration data). Access codes will be dropped altogether from April onwards. Learn more here.

Occupational safety and health (OSH)

This year, the requirement to file OSH events via eSocial, which was being implemented in a stage-by-stage schedule, will include the 4th and last group, consisting of government agencies and international organizations.

For all other groups, the obligation was already in effect, but penalties for noncompliance had been suspended in order to give companies time to adjust to the new rules.

As of January 2023, however, the sanctions are back in force and employers who fail to supply their OSH data via eSocial will be subject to fines and penalties.

In this respect, information to be supplied mainly concerns the following data:

• S-2210 – Workplace accident communication (CAT);
• S-2220 – Workplace health surveillance;
• S-2240 – Working environment conditions – Risk factors.

Labor convictions

From April onwards, companies will be required to use the eSocial system to provide information on labor lawsuits whose judgments have become final and unappealable and on settlement agreements signed with former employees.

This will enable the Federal Revenue Service to collect the records of social security contributions and FGTS (Employees’ Severance Indemnity Fund) payments made on account of labor convictions and settlement agreements, so that the agency can inquire and fine companies when checking for irregularities.

Read more: eSocial: Information on labor lawsuits must be supplied as of April 2023

Replacement of the GFIP in case of debt acknowledgement

The eSocial is scheduled to implement in January 2023 the obligation to replace the Social Security Payment Bil (“Guia de Recolhimento do FGTS e de Informações à Previdência Social” - GFIP) in case of acknowledgement of debts related to social security contributions legally owed to third parties on account of a court decision or approved settlement agreement (RFB Normative Instruction nº 2,005/21).

It should be noted that no date has been given for the GFIP to be fully replaced for payments related to the Employees’ Severance Indemnity Fund (FGTS).

Electronic PPP

The electronic Welfare Occupational Form (“Perfil Profissiográfico Previdenciário” - PPP) was deployed on January 1, 2023.

As such, the PPP must now be submitted in electronic format only, based on the OSH information supplied via eSocial for workers of companies required to comply with this obligation.

Time and attendance

In 2022, important changes were made to laws that govern the time tracking of employees, and those changes are already in full force this year.

One of which came with the publication of MTP Ordinance No 3,717/2022, which extended to January 11, 2023 the deadline for electronic time tracking systems to deploy the following features:

• Electronic Working Hours Record file, as per the specifications provided by the gov.br portal; and
• Electronic Timecard Report, pursuant to article 84 of MTP Ordinance No 671/2021.

One of the biggest developments, however, was set out by MTP Ordinance No 4,198/2022, published in December. The regulation changed how the variable pay that makes up the worker’s compensation should be calculated and the date in which it is due. The amendment mainly concerns payments awarded to work performed after the 20th of each month.

The rule brings legal certainty to employers by allowing them to assess their employees’ working hours in a period other than the usual one (set between days 1 and 31), and variable remuneration to be paid in the month following that in which the work was carried out, without any legal penalty.

EFD-Reinf

As of March 21, 2023, taxpayers who are required to file the Withholding Income Tax Return (Dirf) will also be required to file the EFD-Reinf.

For this purpose, the EFD-Reinf will include fields for providing data that is currently supplied through the Dirf, as the latter is set to be abolished in 2025.

DCTFWeb

As of January 2023, social security contributions due on account of labor court decisions will be declared via the DCTFWeb. Such information used to be provided through the GFIP.

From June 2023 onwards, the DCTFWeb is set to replace the DCTF for purposes of debt acknowledgement and claiming of tax credits related to withheld Corporate Income Tax (IRPJ/IRRF), Social Contribution on Net Income (CSLL) and the contributions for Social Integration (PIS/Pasep) and Social Security Financing (Cofins).

Another major change is that, in case of no-turnover, the DCTFWeb must only be filed once, in the first month where no taxable event was found. In the past, companies were required to report their tax situation as soon as they started their activities and in January of each year, and had to do so continuously until they had taxable income.

Legal Framework for Foreign Exchange

The new Legal Framework for Foreign Exchange went into force on December 31, 2022. The statute streamlines foreign currency transactions carried out in Brazil and simplifies remittances to companies abroad, hence reducing costs and risks arising from forex transactions. The law also introduces important changes on how such information should be reported to the Central Bank.

Electronic Integration of Notarial Services (SERP)

Scheduled to be deployed by January 31, the Electronic System for Public Records (SERP) will interconnect databases of more than 13,000 notary offices from all over the country, boosting efficiency and cutting red tape in notarial services.

This transformation will save time and costs for users, eliminating the need to travel from one notary office to another. Under the current system, a single user has its records scattered across several offices, which hinders access to information.

It will also be possible to send documents and supply information in a digital fashion, by using an electronic signature.

Read more: Modernization of notarial services introduces changes on several levels

Transfer price

Published on December 29, Provisional Presidential Decree No 1,152/2022 brought the Brazilian taxation on sale and transfer transactions of goods and services with related parties abroad – "transfer pricing" – in line with international standards.

The amendments aim to ensure that related parties negotiate their transactions on an equal footing, under the same terms and conditions that would have been established between unrelated parties in a free trade market.

The decree will not take effect until 2024, but taxpayers can adopt the new rules as of 2023, if they so wish.

Read more: Provisional Decree aligns transfer pricing rules with international standards

Other aspects to keep in mind

Several legislative changes have been made over the past year pertaining to compliance with primary obligations, but these are not the focus of this article and should thus receive due attention from managers.

It is also paramount to analyze the specifics of each business and the regulatory changes that are particular to your industry.

Accounting, tax, and labor compliance

DPC assists companies and individuals in complying with the regulations in force, ensuring that our clients remain in good standing with multiple regulatory agencies. You can count on the support of our experts for operational and strategic actions on these fronts: dpc@dpc.com.br.