Guidance published in the official gazette on 8 October 2015 concerns the electronic or digital bookkeeping requirements for ICMS- IPI. The control of production and inventory field (referred to as bloco K or “block K”) in the digital tax bookkeeping system (EFD) for purposes relating to the state-level sales tax and federal excise tax—ICMS-IPI—is intended to provide information relating to the production of and stock of goods held by a company and also held by third parties.
• The ICMS—Imposto sobre Circulação de Mercadorias e Serviços—is a state-level sales tax imposed on the physical movement of merchandise. The ICMS is also levied on certain inter-state and inter-municipal services.
The IPI—Imposto sobre Productos Industrializados—is a federal excise tax that applies for manufactured goods.
The guidance sets forth a timetable for compliance with the digital bookkeeping requirements, with implementation to be phased in from 2016 to 2018, depending on the industry sector and/or annual revenue.
Read an October 2015 report (Portuguese) prepared by the KPMG member firm in Brazil: Tax News: BLOCO K – SPED – EFD ICMS/IPI
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