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Configure Tax Calculation for Brazil

This article applies to:Avalara AvaTax

If you have the Brazil module for AvaTax, you can set up your company for tax compliance in the city of Sao Paulo, Brazil. Use the steps below to configure your account for this feature.

To purchase the Brazil module, contact your Customer Account Manager (CAM).

Edit your company

Configure your company for collecting tax in Sao Paulo City, Brazil using the following steps:

  1. In the Admin Console, click the Organization tab and then click the Company Name for the company you want to configure.
    Brazil_OrganizationTab-SelectCompany.png
  2. On the Company page, click the Brazil Setup tab.
    Brazil_Organization-Company-BrazilSetupTab.png
  3. Next to Add a new Tax Regime, click the + button. Next to Real Profit, set the Effective Date and the End Date, then click Insert.
    Brazil_Organization-Company-BrazilSetupTab-BrazilTaxFile.png
    1. If you need to make changes to this Tax Regime, click the the Pencil icon to edit your Effective Date and End Date, or click X to delete this Tax Regime.
      Brazil_Organization-Company-BrazilSetupTab-BrazilTaxFile-Edit.png
  4. Beneath the Tax Regime table, click Choose File to browse your computer for your Brazil Tax Certificate. Type your Digital Certificate Password and then click Upload.
    Brazil_Organization-Company-BrazilSetupTab-TaxCertificate.png

Note:
If you do not already have one, certificates are available for purchase through certain financial institutions in Brazil (Banks), credit agencies (Serasa, Experian), some local chamber of commerce, the Brazilian postal service and specialized businesses such as DocuSign (called DocYouSign in Brazil). When the certificate is purchased, the provider issues the certificate, passwords, and instructions on how to download or access it.

Configure nexus

Set up your nexus settings in Brazil for your company using the steps below:

  1. In the Admin Console, click the Organization tab and then click Nexus Jurisdictions.
    CompanyMenu-NexusJurisdictions.png
  2. On the Country Jurisdictions page next to Brazil, click the checkbox, type in your Tax ID, set Begin and End Dates and then click Save.
    Brazil_Organization-NexusJurisdictions-CountryHeader.png
    Brazil_Organization-NexusJurisdictions-Country-Brazil.png
  3. Next to Brazil, click Select Jurisdictions.
    Brazil_Organization-NexusJurisdictions-Country-Brazil-SelectJurisdictionbutton.png
  4. On the State/Province Jurisdictions page next to Sao Paulo, click the checkbox, type in your Tax ID, set Begin and End Dates, then click Save.Brazil_Organization-NexusJurisdictions-Country-StateJurisdictions-SaoPaulo.png
  5. Next to Sao Paulo, click Select Jurisdictions.
  6. On the Local Jurisdictions page, the radio button next to Selective is selected by default (All is not an option at this time).
    Brazil_Organization-NexusJurisdictions-Country-Brazil-SaoPaulo-LocalJurisdictions-SelectivebyDefault.png
  7. Next to Sao Paulo City ISS, click the checkbox, type in your Tax ID, set Begin and End Dates, then click Save. This completes configuring nexus for Brazil.
    Brazil_Organization-NexusJurisdictions-Country-LocalJurisdictions-SaoPauloCityISS.png

Add transactions

Add transactions for Brazil to AvaTax using the steps below.

  1. In the Admin Console, click the Transactions tab, then click New.
    Brazil_Transactions-Newmenu.png
  2. On the New: Transactions Adjustment page, on the Document tab, click Origin.
    Brazil_Transactions-NewTransaction-OriginField.png
  3. In the Origin dialog box, type the origin address for the transaction and click OK.
    Brazil_Transactions-NewTransactions-Origindialogbox.png
  4. Fill out the rest of the transaction details including all required fields. 10 Brazil-specific fields appear on the Document tab when Brazil is the origin address for the transactions.
    Brazil_Transactions-NewTransactions-BrazilAdditionalFields.png
    • Buyer Type (Required): Choose one of the following from the drop-down:
      • IND: Individuals
      • GOV: Government institutions
      • BUS: Private businesses
    • Transaction Exempt of PIS: Check the box if the transaction is exempt from Programa de Integração Social / Social Integration Program
    • Transaction Exempt of COFINS: Check the box if the transaction is exempt from Contribuição para o Financiamento da Seguridade Social / Contribution to Finance Social Security Health
    • Transaction Exempt of CSLL: Check the box if the transaction is exempt from Contribuição Social sobre o Lucro Líquido / Social Security Contribution on Net Income
    • Buyer Exempt of PIS-Withholding: Check the box if the buyer is exempt from Programa de Integração Social / Social Integration Program withholding
    • Buyer Exempt of COFINS-Withholding: Check the box if the buyer is exempt from Contribuição para o Financiamento da Seguridade Social / Contribution to Finance Social Security Health withholding
    • Buyer Exempt of CSLL-Withholding: Check the box if the buyer is exempt from Contribuição Social sobre o Lucro Líquido / Social Security Contribution on Net Income withholding
    • Buyer Exempt of IR-Withholding: Check the box if the buyer is exempt from Imposto de Renda / Income Tax withholding
    • Sale Extended Description: Type a description of the sale
    • Buyer Email: Buyer's email address
  5. Click the Lines tab and then click Add New Line.
    Brazil_Transactions-NewTransactions-LineTab-AddNewLine.png
  6. Type additional details for your transaction into the form, click Add at the bottom of the tab to add that line to the invoice, then add additional lines or save the transaction to finish. Saving returns you to the Transactions tab invoice list for your company.
    Brazil_Transactions-NewTransactions-LineTab-AddNewLine-AddLine&Save.png

    Note:
    Invoices for Digital Goods and Services can only have one line item per invoice.

  7. To review your invoice, locate it in the Doc Code column and click the invoice name.
     Brazil_Transactions-NewTransactions-LineTab-AddNewLine-TransactionspageAdded.png
  8. In addition to the details you entered, the Brazil Invoice History displays the status of the invoice in terms of its submission, review and approval by the appropriate taxing authority. (It is a legal requirement in Brazil that all tax documents be submitted to the local jurisdiction's taxing authority for approval).Brazil_Transactions-NewTransactions-Invoice-BrazilInvoiceHistory.png
  9. In the Document Line table, click the > next to the line number or click Expand All in the top right corner to expand the line for additional details including calculated tax.
    Brazil_Transactions-NewTransactions-Invoice-BrazilDocumentLineDetailExpanded.png

Note:
Once an invoice is submitted to the local taxing authority in Brazil, it is locked for editing. There is a small window during which a cancelation request may be submitted to the city of Sao Paulo, in order to stop the original invoice and submit a new, edited invoice if necessary. However, once taxes have been paid on the invoice (on the 10th of the month following the invoice date), it cannot be canceled or changed.


 

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