Digital Accounting Bookkeeping (ECD) filing deadline extended

Legal entities must now submit by July 30 2021 the ancillary obligation for the calendar year 2020

The Federal Revenue Department, on an exceptional basis, by Normative Instruction RFB No 2023, has extended to July 30, 2021 the deadline for submitting the Digital Accounting Bookkeeping (ECD) for year 2020.

Previously, the deadline was May 31, 2021. The extension responds requests from entities in the accounting sector, which have been facing problems on performing their activities due to the impacts of Covid-19.

The measure is also valid for cases of extinction, consolidation, merger and total or partial spin-off of the legal entity, and it must be submitted:

- By the last working day in July 2021, if the event occurs between January and June; and

- By the last working day on the month following that of the event, if the event occurs between July and December.

About ECD

Digital Accounting Bookkeeping (Escrituração Contábil Digital - ECD) is a federal ancillary obligation that has replaced physical document delivery with digital or electronic files. ECD unifies activities such as reception, validation, storage and authentication of books and documents that are part of accounting and tax bookkeeping.

Through bookkeeping, proof and validation of the following business records must be made:

- General ledger and its auxiliaries, if any;

- Sub-ledger and its auxiliaries, if any;

- Daily Interim Financial Statements, Balance Sheets and Entry Forms of the auxiliaries.

Duty

ECD submission is compulsory to the following:

• Legal entities subject to taxation of Income Tax on the basis of real profit;
• Legal entities taxed based on deemed profit, which pay profit, without incurring Withholding Income Tax (Imposto sobre a Renda Retido na Fonte- IRRF), a portion of profits or dividends greater than the tax base, reduced after taxes and contributions to which it is subject;
• Immune and exempt legal entities that, in relation to the events that occurred in the calender year, have been required to submit the Digital Tax Bookkeeping, in accordance with Normative Instruction RFB No 1,252/2012;
• Joint Venture Partnership (Sociedades em Conta de Participação - SPC), by ledgers of ostensive partner.

ECD submission is optional to other legal entities.

Fine for delay in Digital Bookkeeping submission

In the event of delay or non-submission, the following penalties will be levied:

- fine equivalent to 0.5% (half percent) of the the legal entity gross revenue, referring to the bookkeeping period, to those which do not comply with the presentation of records and their files;

- fine equivalent to 5% (five percent) on the corresponding transaction amount, limited to 1% (one percent) of the legal entity gross revenue, referring to the bookkeeping period, to those which omit or provide incorrect information about the records and their files; and

- fine equivalent to 0.02% (two hundredths percent) per day of delay, calculated on the legal entity gross revenue, referring to the bookkeeping period, limited to 1% (one percent) of that revenue, to those which do not comply with the deadline established for the presentation of records and their files.

ECD and ECF

The records and data registered on ECD are used to fill out the Digital Tax Bookkeeping (Escrituração Contábio Fiscal - ECF). That is, the obligations complement each other, and the information registered in both must be aligned.

It is worth remembering that the Public Digital Bookkeeping System (Sistema Público de Escrituração Digital - SPED), which brings together these and other accounting and tax obligations, crosses data and compares different taxpayer statements submitted to this system.

Annually, ECF submission deadline ends on July's last working day. So far, the ECF 2021 deadline has not been potsponed, but such an extension is awaited, as occurred last year on an exceptional basis due to Convid-19.

Accounting and tax support

Rely on Domingues e Pinho Contadores routine operational support and consulting services for assuming practices that will boost your business's accounting and tax management.

The DPC team assists companies, every year, in the process of completing and deliverying ECD and ECF, by running reviews and cross-checking information proactively. This ensures compliance with tax authorities, mitigating risk and assessment for errors or disagreements.

In the case of companies for which DPC does not render accounting and tax services, actions can be taken on a case-by-case basis, to review deliverables before or after deadline, in order to support adjustments, refinements and submission of statements.