News that will impact your business
Market alertsJanuary-March | 2018
EFD-Reinf represents a milestone in the schedule of tax obligations
The new standard is effective on May 1, 2018 and brings important changes in the calculation of taxes withheld on the provision of services
The Digital Public Bookkeeping System (SPED) continues its development with the implementation of the Digital Tax Bookkeeping of Withholdings and Other Tax Information, EFD-Reinf. This new module replaces several accessory obligations to employers and taxpayers, and innovates by being generated on the same platform of eSocial, DCTF Web.
Established by Normative Instruction 1,701, EFD-Reinf is mandatory starting on May 1, 2018 for companies with a revenue of over R$ 78 million in 2016 and November 1, 2018 for companies with revenues of less than R$ 78 million in 2016. Public entities must apply the new rules starting May 1, 2019.
The new tax obligation portrays the Brazilian tax’s complexity since it involves withholdings of federal taxes specified on service invoices, which are documents issued by the municipalities.
Automation has made tax compliance even more delicate and susceptible to risks, and requires the adequacy of processes and technologies to ensure the security of the data transmitted.
Assertive compliance with accessory obligations is a priority for companies. EFD-Reinf is a milestone for its implications on the delivery of obligations, whose deadline is prior to the deadline of the respective tax., Alessandra Nishi, Deloitte's partner of the Tax Outsourcing area.
Government reduces interest rates for constitutional funds
The change should stimulate investments and boost businesses in the Center-West, North and Northeast regions
On January 1, 2018, new interest rates for financing investment projects came into effect. They are very attractive when compared to other capital sources available in the market.
These changes directly affect the constitutional funds, main instruments used for financing investment projects in the Center-West, Northeast and North regions. Among them are the FNE, managed by Banco do Nordeste; FNO, managed by Banco da Amazônia; and FCO, under the control of Banco do Brasil.
The drop in interest rates is further enhanced by the adoption of the long-term rate model, composed by the variation of the National Consumer Price Index (IPCA) and the real fixed interest rate, according to the real yield of the National Treasury Notes – B Series (NTN-B). With that, the financial cost should accompany macroeconomic fluctuations and have fewer distortions during the financing period.
The new rates represent excellent news to entrepreneurs who, in a year of economic upturn, can have a better view of the conditions to conduct their businesses., Carlos Rebelatto, Deloitte's Financial Advisory partner, based in the Recife office.
IFRS 16 impacts lease accounting and disclosure
The new accounting standard, which will come into force in January 2019, affects all economic sectors and requires an analysis of the equity structure, the funding sources and the compliance with financial covenants
The International Accounting Standard Board (IASB) has adopted the IFRS 16, a new standard that defines the principles for accounting and disclosing the leases made by companies. The new standard is mandatory as of January 2019 for all countries using the IFRS guideline, including Brazil.
The IFRS 16 affects all companies that lease assets or properties, as it changes the status of leasing agreements. Identifiable leased items, the so-called leasing, are considered companies’ assets – which implies that the financial liabilities arising from lease agreements are to be recorded. This brings more transparency and standardizes the companies’ statements of financial position regarding the use of assets in their operations and their financing.
In practice, companies will see a major change in their statement of financial position, the indebtedness index and EBITDA (earnings before interest, taxes, depreciation and amortization).
Although IFRS 16 will come into effect in 2019, the transition must be prepared in advance, to map rental agreements and commercial leases (leasing), analyze existing systems and assess the necessary adaptations to meet the new standard’s requirements.
IFRS 16 impacts almost all companies operating in Brazil. Financial covenants (loan and financing agreements items designed to protect the creditor's interest) must also be addressed, as they can suffer significant changes., Marcelo Teixeira, Deloitte's Audit partner and expert in the financial services.
Agro+Integrity” seal recognizes best agribusiness practices
Companies need to invest in compliance and seek the new certification, which represents a differential in obtaining contracts
Transparency and ethics are increasingly essential to business development, and agribusiness – a sector that accounts for one-quarter of the Brazilian GDP – needs to adapt to these market and society requirements as well. Following this trend, the Ministry of Agriculture, Livestock and Food Supply (MAPA) released the “Agro+Integrity” seal, which acknowledges companies based on five pillars: actions against corruption, compliance with labor legislation, sustainable management, environmental responsibility and sector requirements.
To apply for the certification, companies have to register until May 31, 2018, via the MAPA website. The list of certified companies will be disclosed on September 30, after analysis of the qualification documents submitted. The seal delivery will take place on the Agriculture Day, on October 17th.
Companies must anticipate and adapt their structures to meet the certification requirements. To earn the seal, organizations need to prove the existence of a compliance program, which includes a Code of Ethics or of Conduct approved by the executive board or by the management board, as well as an effective Reporting Channel. It is also required to be a signatory of the Business Pact for Integrity and Against Corruption, promoted by the Ethos Institute; not appear on the Slave or Child Labor Dirty List; and have a certificate of environmental clearance, among other requirements.
The ‘Agro+Integrity’ seal confers a significant advantage in the competition for new contracts, because it attests to the companies’ best practices in management, ethics and sustainability., Paulo de Tarso, Deloitte's lead partner for Agribusiness and São Paulo's Country Side.