Brazil Tax and EInvoice - Version 3.10 Upgrade Requirements

It has come to my attention in many discussions that there are a lot of companies that don't fully understand the required upgrades in Brazil.  So in short, here is a quick overview of 3.10 requirements as well as what we are seeing from project length and staffing.  

I am also seeing the trend for companies to re-evaluate their solution providers -- make sure you don't just upgrade. When you are having to spend six figures and add additional requirements such as eSocial that will take affect soon after 3.1, use these upgrades to better understand:

• your regional strategy and costs. Most companies are managing constant OSS note upgrades across 3 to 4 countries at a minimum, middleware integrations for each country and local servers for each country.  With regional approaches, there hundreds of thousands of dollars to save
• your business processes. Are you using the XML from your suppliers or CTe/Carte Porta to drive 3 Way matching, simplified inbound receiving, and freight payables processing.

Brazil Version 3.1 Highlights:

• Changes in On Network Contingency – The Virtual Servers for Sao Paulo and Rio Grande Del Sul that allow the government to automatically switch to back up servers when the main systems are not functioning. Important that the ability to transition is controlled by the SEFAZ servers, it is not a user triggered switch.

• Data Element – Date & Time will now be accepted not only in Brazil time but also UTC (-11 to +12). Response messages from the SEFAZ will also take this format.
• Identification of Operational Destination and validation rules exist for version 3.1. Examples would internal, interstate or overseas.
• New Descriptions of Emissions – Examples include the following:

            –A return NFe must be produced for every single NFe as consolidated                 returns are no longer allowed

            –Each return NFe must reference the original tax document registered

            –The new Emission shall not be used for refusal of receipt of goods 

• Nota Fiscal Consumer – NFCe also defined in version 3.1 requires the designation of the final consumer. For NFC-e there are required fields if the NFe is for the final consumer.
• Buyer Identification – there are codes required to designate the purchaser (CNPJ or CPF).
• Transportation Code For Importation that designate fields such as the mandatory field of the acquirer of the goods, unless the goods are imported for your own use.
• For Exports – there are additional fields for Drawbacks. A Drawback is an important tax tool utilized by the Brazilian government to improve the competitiveness of Brazilian made products to the external markets. There are multiple types of Drawbacks that allow an organization to recuperate previously paid taxes. 
• ICMS Tax Groupings:

           –New fields for Exemptions that will have reason codes for the                         exemptions

                      •3=Uso na agropecuária;

                      •9=Outros;

                      •12=Órgão de fomento e desenvolvimento agropecuário. 

           –Group Totals

• Payment Type – This will be mandatory for NFCe at the consumer level but optional for the business NFe. 

Estimates we have seen for projects

• The SEFAZ has called this the largest change since version 3.10, so look back at your 2.0 upgrade costs to understand potential impacts
• Minimum we see from system integrators is a project of 2-3 months. We are seeing projects based on complexity of upwards of 6 months especially if you are on legacy ERP system with heavy Z customization within your process – which is basically most multinationals.
• Resource requirements include multiple people - some full-time, some part-time -- but this is not a single person project. In future articles, I will provide a sample project plan for the upgrade as well as a TCO Calculator