Prepare your company for the compulsory filing of EFD-Reinf from 2018

The Digital Tax Bookkeeping of withholding and Other Tax Information (Escrituração Fiscal Digital de Retenções e Outras Informações Fiscais - “EFD-Reinf”), established by RFB Normative Instruction 1701/2017, is a SPED module intended to legal entities and individuals use, in addition to Digital Tax Bookkeeping System of Social Security and Labor Obligations (eSocial). Both are accessory obligations that taxpayer should meet in 2018, which require great attention to deploy, and will have a great impact on the companies' routines.

The bookkeeping

The EFD-Reinf focuses on contracting services and tax withholdings. This new system use, together with eSocial, should progressively promote the replacement of information sent through Income Tax Withholding Return (DIRF), FGTS Payment Slip and Information to Social Security (GFIP), the Annual Report of Social Information (RAIS) and the General Register of Employed and Unemployed Persons (CAGED).

i) services received/provided by work force assignment or contract;

ii) withholding tax (IR, CSLL, COFINS, PIS/PASEP) on the miscellaneous payments to legal entities;

iii) the funds received by/transferred to sports club with professional soccer team;

iv) determination of social security contributions replaced by agro-industries and other rural producers corporation on income from rural production sales;

v) companies subject to social security contribution on gross revenue (CPRB);

vi) Entities promoting sports event in Brazilian territory, involving sports association with professional soccer club.

Importantly, from the EFD-Reinf filing, the information of who provided services and who hired the service will be available at SPED environment and even may be easily compared by tax authorities with other existing information in other accessory obligations already mentioned, whose discontinuity has no schedule yet, nor legal provision.

Compulsory timetable

i) From Jan-01-2018: companies with revenue greater than BRL 78 million in 2016.

ii) From July-01-2018: other companies, regardless annual sales revenue.

Filing Deadline

EFD-Reinf should be filed until 20th day of the month following the month the bookkeeping is referred to.

The exception is to sports events, which should be filed within two days after its realization.

Adequacy

Considering the EFD-Reinf deployment schedule, companies should take the opportunity to test the restricted production version and plan how the information should be filed and enable an electronic proxy, if any.

The preparation and use of the system under test phase are important so that inconsistent information is not filed during the official deadline to file the accessory obligation to avoid an automatic sanction through the DCTF Web system, which should receive eSocial and EFD-Reinf information soon after the Federal Revenue of Brazil process the files.

Count on good professionals

Regardless your company’s activity, it is always necessary to apply the tax rules correctly, considering the obligations range to be met. The EFD-Reinf requires excellent planning and deployment, in addition to adjustments in the internal structure of the company so that the obligation should be properly accomplished.

Therefore, always seek for the advice of experienced professional and in tune with your company reality. This should minimize the notices risks for failure in filing statements, inaccurate provided information or in taxes payment, which may affect the profits and decrease your business viability.