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Ancillary Obligations: Learn About The Main Statements That Must Be Made In BrazilPosted 09/09/2022
Opening a company is a good way to invest in Brazil. But the process of setting up a business involves a lot of care with the payment of taxes and duties. That is why it is essential to have the guidance of an accountant in Brazil, a professional who warns clients about another matter: ancillary obligation payment.
All in all, there are currently more than 10 ancillary obligations, with established payment terms. And it is, in fact, important to be aware of these deadlines, since delays in settling them may result in fines and other problems with the Brazilian IRS.
Therefore, it is important to learn in detail about the ancillary obligations, so that it is possible to carry out an effective accounting management and in accordance with the legislation in force in Brazil.
What are ancillary obligations and what is their purpose?
Ancillary obligations are auxiliary instruments that aim to collect data referring to the operations of numerous companies. They are usually data and information used to calculate taxes, charges, levies, and contributions.
Therefore, ancillary obligations consist of statements that every company needs to send to supervisory bodies – at the municipal, state and federal levels.
Through the ancillary obligations, the companies stated the tax payment. In addition, they are also able to prove compliance with the labor regime in their niches of activity.
Although ancillary obligations are often the responsibility of the companies’ personnel department sector, it is the accountant in Brazil who needs to guide their clients in relation to monitoring the payment of ancillary obligations.
Main ancillary obligations
1. Monthly obligations
CAGED (General Registry of Employed and Unemployed) consists of a file that compiles information on employee admissions and dismissals. This obligation must be declared on eSocial by the 7th day of the following month.
DARF stands for Federal Tax Payment Document and is an ancillary federal obligation (paid by individuals or legal entities), whose purpose is to pay taxes on financial transactions. DARF payment term is until the 20th of each month.
The companies’ DARF include:
- Social Integration Program (PIS);
- Corporate Income Tax (IRPJ);
- Social Contribution on Net Income (CSLL);
- Contribution to Social Security Financing (COFINS);
- Tax on Credit, Exchange and Insurance Transactions (IOF).
With payment date until the 20th of each month, the Payment Document for Federal Simplified Tax System for Small Businesses (Simples Nacional) – DAS corresponds to 5% of the minimum wage. Additionally, taxes come in according to the activity performed.
Statement of Federal Tax Liabilities and Claims for Social Security and Entities and Funds — DCTF WEB is a statement of third-party debts, which must be paid by the 15th of each month.
Statement of Tax Replacement, Tax Rate Differential and Anticipation — DESTDA is due to be sent by the 28th of the following month. In short, it is the ancillary obligation for the purposes of collecting the ICMS [State Goods and Services Tax] Tax Rate Differential between the states.
Companies have until the 7th of the following month to submit employee payroll information via eSocial. Through this system, other ancillary obligations are transmitted, including CAGED.
ICMS Information and Calculation Bill is a statement containing the calculated ICMS values. Each Brazilian state defines the submission date.
Social Security Bill — GPS is the document for the purpose of collecting the INSS from employees with a payment date until the 20th of each month.
With a deadline for submission until the 7th business day of the following month, GFIP (FGTS payment and Social Security Information Bill) has information on the payment of FGTS [Guarantee Fund for Length of Service] and on the data of those insured by Social Security.
The bill is transmitted through the Company System for the payment of FGTS and Social Security Information — SEFIP.
2. Annual Ancillary Obligations
The Statement of Socioeconomic and Tax Information — DEFIS gathers a summary of the tax, economic and social information of companies that join the Simples Nacional. The document must be sent every year, until the last working day of May.
Withholding Income Tax Return — DIRF is the document proving the payment of income tax by companies.
Tax Accounting Bookkeeping – ECF compiles all data on Corporate Tax Return (IRPJ) and CSLL calculations. In addition, it is a document with a deadline for submission until the last business day of July.
Please, contact an accountant in Brazil
Should you have any questions about ancillary obligation payments, please get in touch with an accountant in Brazil. Europartner is an accounting firm that offers full support to entrepreneurs planning to invest in Brazil.
So, get in touch with our experts and see how we can help you establish your company in Brazil!Author's post: Europartner Accounting