Most important tax issues for 2019

Companies should be aware of changes in the obligations’ schedule and observe the reforms promises in Brazil's fiscal policy

The year begins with a new government that promises to commence changes in the Brazilian tax policy focusing on social security and tax reforms. Therefore, it is important that companies be prepared for the planned changes and those that will come in 2019. Find below the most important issues for this year.

eSocial

According to the Federal Government website dedicated to eSocial, the schedule remains unchanged since the last update in October 2018. The next phases to deploy it in 2019, according to the group, are as follows:

Group 1:

In 2019, a new feature for this group, made up of business entities earning revenues greater than BRL 78 million in 2016, will be responsible to replace the GRF and GRRF for FGTS payment, scheduled to be effective from February.

The other new feature will be the provision of Occupational Safety and Health (OSH) information as of July.

Group 2:

Business entities earning revenues of up to BRL 78 million in 2016, which did not opt for the Simples Nacional, should start recording the periodic events (payroll) until Jan-10. In April, GFIP for social security contributions is expected to be substituted and GRF and GRRF for FGTS payment.

The filing of Occupational Health and Safety data is expected to occur only from January 2020.

Group 3:

Employers opting for the Simples Nacional, individuals (except Domestic) employers, individuals rural producers and nonprofit entities have a calendar full of occurrences throughout the year.

- January 10: Employer registration and tables - April 10: non-periodic events - July 10: periodic events - October 2019: replacement of GFIP for social security contributions and FGTS

Group 4:

The schedule for group 4, made of public entities and international organizations, starts from January 2020.

EFD-Reinf

The Tax Digital Bookkeeping of Withholdings and Other Tax Information (EFD-Reinf) entered into force in May 2018, in addition to eSocial, for companies in the 1st group, with gross revenues greater than BRL 78 million in 2016.

For 2019, the deployment schedule remains so far and it is as follows:

- Group 2 (companies earning revenues up to BRL 78 million in 2016): Jan-10-2019, referring for events from Jan-01-2019; - Group 3 (companies opting for the Simples and non-profit entities): Jul-10-2019, referring to the events that occurred from Jul-01-2019; - Group 4 (public entities): on a date to be established through a RFB act.

Simples Nacional

The legal entities with annual revenues of up to BRL 4.8 million has chosen this regime. Between Nov-01 and Dec-29-2018, Micro-enterprises (MEs) and Small Business Enterprises (EPPs) scheduled the application for the 2019 Simples Nacional. After checking pending issues, the registration of the option was completed on Jan-01-2019.

However, those who has missed this deadline can regularize and reschedule the request for the Simples Nacional option until Jan-31-2019 at the “Simples Nacional Portal”, being effective from the first day of the calendar year.

Block K

Industrial establishments must file at SPED Fiscal the information in Block K, which is the digital version of the Inventory and Production Control Record (RCPE). This digital bookkeeping process of the Federal Revenue is where State Treasury Agencies receive from taxpayers the necessary information to calculate the Tax on Sales and Services ("ICMS") and the Tax on Manufactured Products ("IPI").

The Sinief Adjustment 25/2016 brought a schedule of deadlines for Block K that began in 2017 and will be extended until 2022.

For January 2019, the filing of this obligation corresponding to the full bookkeeping of the Block K is planned for the industrial establishments classified in divisions 11, 12 and in groups 291, 292 and 293 of CNAE with revenues greater than BRL 300 million.

For other industrial establishments classified in 10 to 32 divisions, the wholesale establishments classified in groups 462 to 469 of the CNAE and the establishments considered industrial, the obligation is restricted to information of inventory balances of Records K200 and K280. In these cases, full bookkeeping depends on scheduling to be set.

It is noteworthy that the RCPE is only released at the complete transmission of the Block K records.

GIA

The State of São Paulo has already begun the transition phase of the GIA disposal project. The project aims to extinguish the monthly delivery of two similar statements: GIA and EFD Fiscal (ICMS/IPI). At end, only the EFD-Fiscal (ICMS / IPI) will remain mandatory in the State.

The transition phase began on Nov-30-2018 in São Paulo to be gradually deployed, so that the tax authorities and the taxpayers may validate the system together. At this stage, only 1,200 taxpayers from the Periodic Assessment System related to 14 accounting offices are participating with the obligation to file GIA and EFD-Fiscal (ICMS/IPI) in this period.

Those who are participating in the pilot can consult the GIA of the EFD-Fiscal (ICMS / IPI), a GIA online, by the Electronic Fiscal Post. The discrepancies in the GIA and GIA of the Fiscal EFD (ICMS/IPI), in addition to possible inconsistencies of the system, will be informed by the DEC - Electronic Domicile of the Taxpayer.

Rio de Janeiro still charges the two obligations.

DIFAL

The DIFAL sharing, a differential tax rate payment, ended on Jan-01-2019 and 100% of the value becomes to the destination state. The state of origin of the goods shall be the interstate rate.

DIFAL entered into force on 01/01/2016, establishing that, in interstate operations, the differences between ICMS rates should be divided between the origin and destination states. Over the years, the sharing went through a gradual process, changing the percentages that belonged to each party.

At this moment, the discussion about the constitutionality of charging DIFAL to the taxpayers opting for the National Simples is suspended in the Supreme Federal Court and the clause awaits judgment.

Tax reform

In case of a tax reform, the new government has already shown its intention to simplify the tax regime. As there are still no clarification as to how and when such reforms should take place, it is necessary to wait with caution for the next developments.

The year begins with uncertainties on the taxes policy that should be adopted by the new governments, at both the federal and state levels. However, there is a certainty: fiscal and accounting planning has never been so required.

The increasing volume of tax information, the complexity of the Brazilian tax system, coupled with the agility of the information exchange by the Treasury, impose on companies the urgent need to review the processes and the implementation of compliance routines that guarantee more accurate and complete information.