In the Brazilian tax system, there are two types of tax obligations: the main one, which corresponds exclusively to the payment of taxes, and the accessory one, which involves a series of additional duties.
Accessory obligations consist of declarations, reports and records required by the tax and regulatory authorities. Their purpose is to ensure transparency and allow for the control of tax collection. For foreign companies with subsidiaries in Brazil, it is essential to be aware of these commitments – which go far beyond paying taxes.
More than bureaucracy, proper compliance with accessory obligations is essential to avoid fines, inspections and even reputational risks. Below, we’ve put together the main points that international companies must observe:
1. SPED (Public Digital Bookkeeping System)
It comprises different modules, such as Digital Bookkeeping (ECD) and Tax Bookkeeping (ECF). These electronic files consolidate accounting and tax data and must be transmitted annually.
2. DCTF Web (Statement of Federal Tax Debts and Credits)
A monthly submission that informs the Federal Revenue Service of federal taxes assessed, paid or paid in installments, such as social security taxes (payroll INSS, CPRB, domestic employees) and, since 2024/2025, non-social security taxes such as IRPJ, CSLL, PIS/COFINS and IRRF, which come from eSocial and EFD-Reinf, as well as others via the Tax Inclusion Module (MIT). Basically, it centralizes social security contributions and withheld/accrued taxes, replacing the old DCTF PGD for many of these taxes.
3. EFD-Contributions
Monthly document detailing the calculation of PIS and COFINS, especially relevant for companies with a large volume of operations.
4. DIRF (Withholding Income Tax Return)
It was an annual obligation, which was recently abolished, in which the company informed the amounts of IRRF and contributions withheld at source throughout the calendar year and was replaced by EFD-REINF.
5. Labor and social security obligations
They include eSocial, which centralizes the sending of information on employees, payroll, social charges and labor obligations.
6. State and municipal obligations
Depending on the subsidiary’s activity, additional declarations may be required, such as GIA, SPED Fiscal (ICMS/IPI) or ISS declarations in the case of services provided in certain municipalities.
Brazilian subsidiaries of international groups face the challenge of reconciling local requirements with global compliance and auditing standards. A lack of integration between the accounting, tax and legal areas can result in significant fines and financial impacts. Get ready:
- Establish clear internal processes for collecting and validating information;
- Retain a specialized team or rely on experienced local advice;
- Periodically review the delivery schedule to avoid delays;
- Invest in technology and integrated systems to ensure consistency between declarations.
Correctly complying with accessory obligations in Brazil is not just a matter of compliance: it is a strategic differentiator for tax security and for the company’s reputation in the market.
👉 Count on our experts at Drummond Advisors to support your company in this process
Written by Paola Von Atzingen e Allan Bachtold