Brazil: Time's Up For Brazil's Tax Coupon Issuers

Last Updated: 6 December 2016
Article by Vanessa Mello

Tax Coupon Issuers – machines used in retail outlets in the State of Sao Paulo, Brazil – must be replaced by the mandatory Electronic Tax Coupon Authentication System (SAT-CF-e). The new system generates and authenticates the Electronic Tax Coupons and periodically transfers them, via Internet, to the Secretariat of Finance.

We have some bad news for retailers who are used to their Tax Coupon Issuers (ECFs): it is time to get rid of the machines. The use of the ECF has been discarded and replaced by the mandatory Electronic Tax Coupon Authentication System (SAT-CF-e). Previously, the law required the use of the ECF at all establishments in the State of São Paulo that carried out operations with merchandise or service providers where the service recipient was a natural person or legal entity that did not pay the related taxes.

The Electronic Tax Coupon Authentication System (SAT-CF-e)

The SAT-CF-e device is a module comprising hardware and embedded software. This device generates and authenticates the Electronic Tax Coupons and periodically transfers them, via Internet, to the Secretariat of Finance.

The system will enable consumers to find their tax documents online in a much shorter timeframe than currently practiced with the Nota Fiscal Paulista program. It will also simplify the accessory obligations of retail establishments, as the submission of the REDF (Electronic Tax Document Register) will no longer be required.

Replacing the ECFs

All ECFs must be replaced by the SAT-CF-e after five years of use, as established in every ECF permit. Users can also replace the machine earlier, however, this process should be done carefully and requires attention of the business owners, as it involves more than merely turning off a device and connecting another one. The migration involves a bureaucratic process that, if overlooked, may result in fines and other sanctions. 

The Secretariat of Finance of the State of São Paulo (SEFAZ) will not allow users to perform maintenance on devices whose permit has expired. Once the EFC is switched off, it must be deactivated at SEFAZ. This means the company is required to terminate the permit for said device, under penalty of fines and assessments. Now there are also technical issues: even though São Paulo State regulations allow the concomitant use of ECF and SAT-CF-e, the back office systems at some companies may not able to receive information from both systems simultaneously. In these cases, it is advisable to replace all ECFs as soon as the first machine expires. A second option is to perform an analysis of the infrastructure in order to make sure that the existing network can support both systems when running simultaneously.

Furthermore, all new establishments (those who started operations from July 2015) should have already installed the SAT-CF-e. It is crucial to know the deadlines and the validity of the devices, as there are a number of sanctions that might originate from it – including the closing of the store until compliance with the law is proven. Please note that an expired ECF can also generate a tax assessment for illegal issuance of tax documents. These assessments, depending on the case, can be based on the time of use or number of fiscal coupons issued.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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