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IFA 2022: Brazil's e-invoicing requires tax and IT collaboration

During an IFA panel, Deloitte partner Marcelo Natale stated that Brazilian tax directors must collaborate with IT teams to guarantee the information they submit to authorities is reliable.

To prepare for a high degree of paperwork, tax directors in Brazil must have technology training and push for collaborative work with IT teams, said Marcelo Natale, tax partner at big four firm Deloitte in So Paulo, at the IFA Congress in Berlin yesterday.

“Tax professionals have to learn and work together with IT people. They can’t just rely on the corporate IT teams. They also have to do more training around technology,” said Natale.

“It’s impossible to execute your tax work without knowing the source of that data,” he added.

Tax directors, according to Natale, must also analyse the data of their suppliers and clients.

“Tax departments must work together to ensure the information is reliable. You can’t just rely on luck. You need to understand the full process behind the data. IT issues become tax issues as well,” he explained.

The rising usage of tax compliance processes has had a considerable impact on Brazilian tax professionals, notably in terms of thinking and training.

This is owing to an increase in audits from Brazilian tax officials, who frequently ask for the source of the data and what is behind each specific transaction.

According to Natale, tax departments must be prepared for a high degree of documentation, which implies communication between tax departments and IT teams has become critical.

"Inconsistency is an ongoing problem."

Brazil launched electronic invoicing in 2005 and has since continued to advance technologically.

The initial programme faced numerous obstacles, notably because each state has its own legislation governing tax policy, including VAT. According to Natale, the country has five main forms of VATs.

“Tax returns in Brazil may have 5,000 pages – imagine this much information included in the return. Tax authorities will continue to ask for more and more information from taxpayers,” he said.

“Inconsistency is a permanent issue for taxpayers. In 2001, we surpassed one billion electronic invoices issued in a single day. In Brazil, we say tax authorities know more about taxpayers,” he continued.

While technology can help firms reduce the increased risk of audits and meet data requirements set by authorities, tax directors must receive technological training and collaborate in order to use these tools effectively.


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