Brazil NF-e Tax Invoice Requirements: Complete Guide

A valid Brazilian NF-e tax invoice must contain the issuer and recipient CNPJ numbers, CFOP operation codes, NCM product classification codes, CST tax situation codes, individual line-item tax calculations for ICMS, IPI, PIS, and COFINS, a 44-digit access key (chave de acesso), and an ICP-Brasil digital signature validated by SEFAZ. Missing or incorrect data in any of these fields can trigger rejection at the state tax authority, delay goods in transit, or expose the recipient to fiscal penalties during an audit.

Five overlapping tax layers apply to a single transaction in Brazil: ICMS (state-level value-added tax), IPI (federal excise), PIS and COFINS (federal social contributions), and ISS (municipal services tax). Each layer carries its own rates, exemption rules, and tax situation codes. On top of that structure, hundreds of CFOP operation codes classify the nature of every transaction, multiple invoice formats serve different purposes, and strict retention rules bind both the issuer and the recipient. According to World Bank data, businesses in Brazil spend over 1,500 hours per year on tax compliance, the highest rate of any country globally. For finance teams outside Brazil, the complexity is compounded by language barriers, unfamiliar acronyms, and a regulatory framework that changes frequently at federal, state, and municipal levels.

This guide is written specifically for the AP and receiver side of the equation. If you are an accounts payable professional, financial controller, or accountant at a multinational company receiving invoices from Brazilian suppliers, the information here addresses your needs directly: how to verify that an incoming nota fiscal is valid, how to interpret the tax codes and values it contains, and what your obligations are as the recipient.

The article covers the following areas in detail:

• Brazilian invoice types and when you will encounter each one (NF-e for goods, NFS-e for services, CT-e for freight)
• Mandatory fields that must appear on every NF-e, organized by category
• The five-layer tax framework (ICMS, IPI, PIS, COFINS, ISS) and how each tax appears on a line item
• CFOP, NCM, and CST codes and how to decode them when reviewing an invoice
• DANFE vs NF-e XML and why understanding this distinction matters for legal and audit purposes
• Record retention obligations that apply specifically to invoice recipients
• A practical verification checklist you can use when processing incoming Brazilian invoices

Whether you process a handful of Brazilian supplier invoices each quarter or manage high-volume AP operations across Latin America, a working knowledge of Brazil NF-e tax invoice requirements is not optional. It is foundational to accurate tax recovery, clean audit trails, and compliant cross-border operations. The starting point is understanding exactly what types of invoices your team will receive.

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Brazilian Invoice Types: What AP Teams Receive

Before examining the detailed fields and tax layers on a Brazilian invoice, AP teams need to understand which document types they will encounter. Brazil operates several distinct electronic invoice categories, each governed by different rules and issued for different transaction types. Knowing which one you are looking at is the first step in processing it correctly.

NF-e (Nota Fiscal Eletronica) is the electronic invoice for goods and physical products. When your company purchases raw materials, equipment, inventory, or any tangible goods from a Brazilian supplier, the NF-e is the document that arrives. It is managed at the state level through SEFAZ (Secretaria da Fazenda), the state tax authority, and is mandatory for virtually all interstate goods transactions and most intrastate sales. For AP teams paying Brazilian suppliers for physical products, the NF-e is by far the most frequently encountered document type.

NFS-e (Nota Fiscal de Servicos Eletronica) covers services rather than goods. If your organization engages Brazilian consultants, IT service providers, legal advisors, or any professional service firm, the invoice you receive will be an NFS-e. The key difference between an NFS-e vs NF-e is jurisdictional: while the NF-e is standardized at the state level, the NFS-e has historically been managed by individual municipalities. With over 5,000 municipal systems operating independently, format and content requirements for NFS-e documents vary significantly from one city to another. Brazil is currently consolidating these into a national NFS-e platform, but AP teams should expect continued variation in the documents they receive from different municipal jurisdictions.

CT-e (Conhecimento de Transporte Eletronico) is the electronic transport document. AP teams processing freight charges, shipping costs, or logistics invoices from Brazilian carriers will encounter the CT-e. Its printed representation is called the DACTE, which functions similarly to the DANFE for NF-e (covered in a later section). If your company imports goods within or into Brazil and pays separate freight invoices, the CT-e is the document type to expect.

NFC-e (Nota Fiscal de Consumidor Eletronica) is the consumer-facing electronic receipt used in B2C retail transactions. While less relevant for standard AP workflows, NFC-e documents can surface in employee expense reports when staff purchase goods at Brazilian retail establishments and submit receipts for reimbursement.

A critical characteristic shared across all these document types is pre-authorization. Every NF-e must be submitted to and authorized by SEFAZ before it becomes legally valid. This means AP teams can independently verify the authenticity of any NF-e they receive by checking its 44-digit access key on the SEFAZ portal, a built-in safeguard against fraudulent documents.

Brazil's electronic invoicing system is one of the most mature in the world. The country was among the earliest adopters of mandatory e-invoicing, and the results have been measurable. According to an Inter-American Development Bank impact evaluation, Brazilian states that were among the first to adopt electronic invoicing through the IDB-supported PROFISCO program saw a 9.8% increase in tax revenue compared with states that had not yet joined the program. That scale of fiscal impact explains why the system is so strictly enforced and why compliance requirements for both issuers and recipients are rigorous. Brazil's approach has also influenced global e-invoicing requirements and standards, with several Latin American countries following similar mandates.

The remainder of this guide focuses primarily on the NF-e for goods, as it is the most common and complex invoice type that AP teams process. However, many of the principles covered, particularly around tax codes, verification, and retention, apply across all Brazil electronic invoice types. The next section breaks down the mandatory fields that appear on every NF-e.

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Mandatory Fields on a Brazilian NF-e

The NF-e XML schema contains over 400 fields in total, but AP teams processing incoming Brazilian invoices need to focus on a core set of mandatory elements. These fields determine whether an invoice is legally valid, whether tax calculations are correct, and whether the document can be matched against purchase orders and vendor records. The following field-by-field reference is organized into logical groups for practical verification.

Identification Fields

Every NF-e carries a 44-digit access key (chave de acesso) that serves as its unique identifier across the entire Brazilian tax system. This key is not arbitrary. It encodes the issuing state code, year and month of emission, the issuer's CNPJ, the invoice model (55 for NF-e), series number, sequential invoice number, emission type, a numeric code, and a check digit. AP teams should treat the chave de acesso as the primary reference for any invoice lookup or dispute. It is also the key used to verify invoice authenticity directly through the SEFAZ (Secretaria da Fazenda) portal of the issuing state.

Party Identification

Two CNPJ numbers must appear on every NF-e: one for the issuer (emitente) and one for the recipient (destinatario). The CNPJ (Cadastro Nacional da Pessoa Juridica) is a 14-digit business tax identification number and functions as the Brazilian equivalent of a federal tax ID. For AP verification, the recipient CNPJ must match your company's registered number exactly, and the issuer CNPJ should be cross-referenced against your approved vendor records. A mismatch in either field is grounds to reject the invoice before processing.

Operation Classification

Each line item on an NF-e includes a CFOP code (Codigo Fiscal de Operacoes e Prestacoes), a 4-digit code that classifies the type of commercial operation. The CFOP determines whether the transaction is a sale, return, transfer, or service provision, and it directly affects which taxes apply and at what rates. Because CFOP codes carry significant tax implications, they are covered in detail in a later section.

Product Classification

Products listed on an NF-e are classified using NCM codes (Nomenclatura Comum do Mercosul), an 8-digit system built on the Mercosul extension of the international Harmonized System. The NCM code assigned to each item determines the applicable IPI (federal excise tax) rate and influences other tax calculations. These codes are also covered in detail in a later section.

Tax Situation Codes

Each line item carries CST codes (Codigo de Situacao Tributaria) for ICMS, PIS, and COFINS individually. These codes indicate the specific tax treatment applied to that item: whether it is fully taxed, exempt, zero-rated, suspended, or subject to tax substitution. The CST codes are essential for verifying that the correct tax regime has been applied to each product or service. A full breakdown of how to read these codes appears in a later section.

Tax Breakdowns

Brazilian invoices do not present tax as a single aggregated line. Instead, each line item includes four independent tax calculations for ICMS, IPI, PIS, and COFINS. Each calculation shows three components:

• Base de calculo - the tax base (the value on which the tax is calculated)
• Aliquota - the applicable tax rate
• Valor - the calculated tax amount

AP teams should verify that the tax base, rate, and resulting amount are internally consistent for each of the four taxes on every line item. Discrepancies between the base and calculated amount at the stated rate indicate either a calculation error or a misapplied tax rule.

Digital Signature

Every valid NF-e contains an ICP-Brasil digital signature in XMLDsig format. This cryptographic signature confirms two things: that the invoice was issued by an entity holding a valid certificate from Brazil's national public key infrastructure (ICP-Brasil), and that the XML content has not been altered since signing. If the digital signature fails validation, the invoice should not be accepted for processing.

Authorization Protocol

The final mandatory element is the SEFAZ authorization protocol number, which confirms that the state tax authority received, validated, and formally accepted the NF-e. An invoice without this protocol number was never authorized by the tax authority and has no legal standing. AP teams should confirm the presence of this number on every incoming invoice, particularly when working from printed DANFE documents where the protocol appears in a specific field.

All NF-e data is transmitted and stored as structured XML through the SPED (Sistema Publico de Escrituracao Digital) framework, Brazil's integrated digital tax reporting system that connects businesses directly to federal and state tax authorities. The fields listed above represent the elements AP teams most need to verify when processing incoming invoices, even though the full XML schema is far more extensive.

The tax breakdowns on each invoice are calculated according to five distinct tax regimes, which the next section explains in detail.

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The Five Tax Layers on Brazilian Invoices

Brazilian invoices carry five separate tax layers, each administered by a different level of government, each with its own rates, calculation methods, and exemption rules. If you are accustomed to countries that apply a single VAT or GST, this structure will look fundamentally different. Every line item on a Brazilian goods invoice can trigger four independent tax calculations, and service invoices carry their own municipal tax on top. Understanding what each layer represents is essential for verifying that suppliers have charged the correct amounts.

ICMS (Imposto sobre Circulacao de Mercadorias e Servicos)

ICMS is a state-level tax on the circulation of goods, transportation, and communication services. It functions similarly to a value-added tax but is governed independently by each of Brazil's 27 states (26 states plus the Federal District), which means rates and rules vary depending on where the transaction originates and where goods are delivered.

Typical rate ranges:

• Intra-state transactions: 17% to 20%, depending on the state. Sao Paulo applies 18%, while Rio de Janeiro applies 20%.
• Inter-state transactions: 7% or 12%, determined by the destination state's economic region. Shipments to states in the North, Northeast, and Center-West regions generally carry a 7% rate, while shipments to South and Southeast states carry 12%.
• Imported goods in inter-state transactions: A flat 4% rate applies when the goods originated outside Brazil.

One critical variation is ICMS-ST (substituicao tributaria), a mechanism where the manufacturer or importer pre-pays ICMS on behalf of every subsequent link in the supply chain. When ICMS-ST applies, the tax shown on the invoice includes not just the seller's own ICMS obligation but also the estimated ICMS for all downstream resales. AP teams receiving invoices with ICMS-ST will see additional fields for the ST base amount and ST tax amount.

What to verify: Confirm that the correct inter-state or intra-state rate was applied based on the origin state (shown in the issuer's address) and the destination state (your receiving location). Misapplied inter-state rates are one of the most common errors on Brazilian invoices.

IPI (Imposto sobre Produtos Industrializados)

IPI is a federal excise tax on manufactured or industrialized products, administered by the Receita Federal (Brazil's federal tax authority). It applies at the point of departure from the manufacturing or importing establishment and appears as a separate line on goods invoices.

Typical rate ranges:

• Rates range from 0% to 330%, determined entirely by the product's NCM (Nomenclatura Comum do Mercosul) classification code. Essential goods such as basic foodstuffs often carry 0%, while products like cigarettes and certain alcoholic beverages sit at the upper end.
• The average effective rate across manufactured goods is roughly 15%, but the spread is enormous.

IPI is calculated on the product value (and in some cases on the product value plus ICMS), and it appears as a separate total on the invoice rather than being embedded in the unit price.

What to verify: Match the IPI rate charged on the invoice against the rate published in the TIPI table (Tabela de Incidencia do IPI) for the product's NCM code. If the NCM classification is wrong, the IPI rate will be wrong.

PIS and COFINS

The single most important thing AP teams need to understand about PIS (Programa de Integracao Social) and COFINS (Contribuicao para o Financiamento da Seguridade Social) is that two completely different calculation regimes exist, and whether your organization can claim input tax credits depends entirely on which one the supplier uses:

• Non-cumulative regime: Combined rate of 9.25% (1.65% PIS + 7.6% COFINS). Companies under this regime can claim input tax credits on purchases, offsetting PIS/COFINS paid on inputs against PIS/COFINS owed on outputs.
• Cumulative regime: Combined rate of 3.65% (0.65% PIS + 3% COFINS). No input tax credits are available. The tax cascades through the supply chain.

Which regime applies depends on the issuing company's tax classification and accounting method, not on the product being sold. Companies taxed under the "lucro real" (actual profit) method generally fall under the non-cumulative regime, while those under "lucro presumido" (presumed profit) use the cumulative regime.

What to verify: Determine which regime your supplier operates under, because this directly affects whether your organization can claim input tax credits on the PIS and COFINS amounts shown on the invoice. The CST (Codigo de Situacao Tributaria) codes for PIS and COFINS on each line item indicate the tax treatment applied.

ISS (Imposto sobre Servicos)

ISS is a municipal tax on services. Unlike the four taxes above, ISS appears only on NFS-e (Nota Fiscal de Servicos eletronica) service invoices, not on NF-e goods invoices.

Typical rate ranges:

• 2% to 5%, set independently by each of Brazil's more than 5,500 municipalities.
• Each municipality maintains its own service classification list, and the applicable rate depends on the type of service performed and the municipal code where the service is rendered.

Because ISS is municipal, the rules, rates, and even the electronic invoice formats can differ from one city to the next. A service performed in Sao Paulo may carry a different ISS rate and classification than the identical service performed in Belo Horizonte.

What to verify: Confirm that the ISS rate matches the rate published by the municipality where the service was provided. Also verify that the service classification code corresponds to the actual service delivered.

How These Taxes Stack on a Goods Invoice

For goods invoices (NF-e), AP teams will see ICMS, IPI, PIS, and COFINS calculated independently for each line item. This means a single invoice with ten products generates forty separate tax calculations, four per product, each with its own rate, base amount, and tax amount. The taxes are not applied sequentially on top of each other in a simple cascade; each has its own calculation base, and the bases themselves can differ (for example, IPI may or may not be included in the ICMS base depending on whether the buyer is the end consumer).

The following reference table summarizes how each tax layer appears on an invoice and what AP teams should verify:

Tax	Level	Applies To	Rate Range	What to Verify
ICMS	State	Goods, transport, communication	7-20%	Correct inter-state vs intra-state rate based on origin and destination
IPI	Federal	Manufactured/imported goods	0-330%	Rate matches the product's NCM code in the TIPI table
PIS	Federal	All transactions	0.65% or 1.65%	Cumulative vs non-cumulative regime matches supplier's tax classification
COFINS	Federal	All transactions	3% or 7.6%	Cumulative vs non-cumulative regime matches supplier's tax classification
ISS	Municipal	Services only (NFS-e)	2-5%	Rate matches the municipality's published schedule

Tax Reform on the Horizon

Brazil's tax reform, enacted through Constitutional Amendment 132/2023, will gradually replace ICMS, ISS, PIS, and COFINS with two new value-added taxes: IBS (Imposto sobre Bens e Servicos) at the state/municipal level and CBS (Contribuicao sobre Bens e Servicos) at the federal level. The transition begins in 2026 and reaches full implementation by 2033. During the transition period, the old and new taxes will coexist, meaning invoices will carry both legacy tax fields and the new IBS/CBS fields. For a detailed breakdown of what to expect, see how Brazil's 2026 tax reform affects invoice processing. IPI will remain in effect but is expected to be restructured with a narrower scope, applying primarily as a selective excise tax.

The tax calculations on each line item are driven by a set of classification codes, specifically CFOP, NCM, and CST, that determine which rates apply and how the tax base is computed. The next section explains how to decode these codes.

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CFOP, NCM, and CST: Decoding Brazilian Tax Codes

Three classification code systems appear on virtually every Brazilian goods invoice, and each one directly determines how taxes are calculated on that document. For AP teams processing incoming NF-e invoices, understanding CFOP, NCM, and CST codes is essential. These codes dictate tax rates, credit eligibility, and compliance obligations. Verifying that they match the actual transaction is one of the most important checks you can perform.

CFOP: Classifying the Fiscal Operation

The CFOP (Codigo Fiscal de Operacoes e Prestacoes) is a 4-digit code that classifies the type of fiscal operation on each line item. Its structure encodes both the direction and geographic scope of the transaction:

• First digit indicates direction and scope:

  • 1 = Incoming, intra-state (purchase from a supplier in the same state)
  • 2 = Incoming, inter-state (purchase from a supplier in a different state)
  • 3 = Incoming, international (import)
  • 5 = Outgoing, intra-state (sale within the same state)
  • 6 = Outgoing, inter-state (sale to a different state)
  • 7 = Outgoing, international (export)

• Digits 2 through 4 specify the nature of the operation, such as a standard purchase, a return, a transfer between branches, or an acquisition of fixed assets.

As a recipient, you will primarily encounter CFOP codes in the 1000, 2000, and 3000 series on your purchase invoices. Common examples include:

CFOP	Meaning
1102	Intra-state purchase of merchandise acquired for resale
1556	Intra-state purchase of materials for use or consumption
2101	Inter-state purchase of goods from the supplier's own production
2556	Inter-state purchase of materials for use or consumption

AP teams should verify that the CFOP code on each line item matches the actual nature of the transaction. A supplier coding a sale of finished goods with a CFOP meant for raw materials, or using an intra-state code for an inter-state shipment, will produce incorrect tax calculations. Mismatched CFOP codes are one of the most common sources of tax discrepancies on Brazilian invoices.

NCM: Classifying the Product

The NCM (Nomenclatura Comum do Mercosul) is an 8-digit product classification code used across all Mercosul member countries: Brazil, Argentina, Uruguay, and Paraguay. The first 6 digits follow the international Harmonized System (HS) used in global trade classification, while the final 2 digits are Mercosul-specific extensions that provide finer granularity.

The NCM code determines the IPI (federal excise tax) rate applicable to each product and can also influence ICMS rates and import duty treatment. Different product categories carry substantially different tax burdens. Two products that look similar in a commercial description can have entirely different NCM codes and, consequently, different tax obligations. Common examples include:

NCM Code	Product	Typical IPI Rate
8471.30.19	Portable computers (laptops)	15%
8443.32.99	Printers and multifunction devices	15%
2202.10.00	Mineral and carbonated water	4%
4820.10.00	Notebooks and notepads (paper)	0%

When reviewing an incoming invoice, verify that the NCM code corresponds to the actual product being delivered. An incorrect NCM can result in overpayment or underpayment of IPI, and in audit scenarios, the recipient can be held jointly liable for tax shortfalls tied to misclassified goods.

CST: Indicating Tax Status Per Line Item

The CST (Codigo de Situacao Tributaria) codes indicate the tax treatment of each line item for specific taxes. There are separate CST tables for ICMS, PIS, and COFINS, and each line item on an NF-e carries a CST code for each applicable tax.

Each CST code communicates whether the item is fully taxable, exempt, zero-rated, suspended, or subject to tax substitution. Key ICMS CST codes include:

CST	Tax Treatment
00	Fully taxable at the standard rate
20	Taxable with a reduced tax base
40	Exempt from ICMS
41	Not subject to ICMS taxation
60	ICMS previously collected via tax substitution (substituicao tributaria)

CST codes for PIS and COFINS follow a similar logic, with codes indicating full taxation, zero rating, suspension, or exemption for each contribution.

For AP teams, CST codes are critical because they determine whether input tax credits can be claimed. An item coded as CST 00 (fully taxable) generates a credit right for the buyer, while an item coded as CST 40 (exempt) or CST 60 (already collected via substitution) does not. Miscoded CST values can lead your organization to claim credits it is not entitled to, creating audit exposure.

CSOSN: The Simples Nacional Variant

Companies operating under Brazil's Simples Nacional simplified tax regime use a different code set called CSOSN (Codigo de Situacao da Operacao do Simples Nacional) instead of standard ICMS CST codes. CSOSN codes follow their own numbering scheme and reflect the unified tax treatment that applies to small and medium enterprises enrolled in Simples Nacional. AP teams may encounter either standard CST or CSOSN codes depending on the supplier's size and tax regime, so your validation process should account for both systems.

How the Three Code Systems Work Together

Consider a concrete example: a single line item on an incoming invoice shows CFOP 2101 (inter-state purchase of goods from the supplier's own production), NCM 8471.30.19 (portable computers), and ICMS CST 00 (fully taxable). Together, these codes tell you that you purchased a laptop from a supplier in a different state, that IPI is charged at the rate published for NCM 8471.30.19, and that ICMS applies at the applicable inter-state rate with no exemptions or substitutions. If any of these codes is wrong, the tax calculations on that line item will be wrong.

All of this data is encoded in the NF-e XML file, which brings up an important distinction: the XML and the printed document that AP teams physically receive are not the same thing, and only one of them carries legal weight.

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DANFE vs NF-e XML: What Counts as the Legal Invoice

If your organization operates in multiple countries, you likely treat the printed or PDF invoice as the authoritative financial document. Brazil works differently. The NF-e XML file is the legal invoice. The printed document you receive with a shipment is not.

This distinction catches many foreign AP teams off guard, and misunderstanding it creates real compliance risk.

The NF-e XML: Your Authoritative Document

The NF-e is born digital. When a Brazilian supplier issues an invoice, they generate a structured XML file, digitally sign it, and transmit it to the state tax authority (SEFAZ) for authorization. Once SEFAZ validates and returns an authorization protocol, that XML becomes the official fiscal document with full legal standing.

This XML contains every data point relevant to the transaction: buyer and seller tax IDs, line-item descriptions, quantities, unit prices, all five tax layers with their respective rates and amounts, CFOP codes, NCM classifications, and the unique 44-digit access key that serves as the invoice's fingerprint in Brazil's tax system.

For tax credit claims, audit defense, and regulatory compliance, the XML is what matters.

The DANFE: A Visual Reference, Not an Invoice

The DANFE (Documento Auxiliar da Nota Fiscal Eletronica) is a printed summary that accompanies goods during physical transport. It presents a human-readable subset of the NF-e data on paper, including the 44-digit access key and a QR code that links back to the authoritative XML on SEFAZ's servers.

What the DANFE is:

• A transport companion document that allows carriers and inspectors to verify a shipment against the electronic invoice
• A quick visual reference showing key transaction details
• A pointer to the real invoice via its printed access key and QR code

What the DANFE is not:

• The invoice itself
• A valid basis for booking tax credits
• A substitute for the XML in your archive
• Sufficient documentation for a tax audit

Think of the DANFE as a receipt stapled to a shipping box. It confirms an invoice exists and tells you where to find it, but it holds no independent legal weight.

What This Means for Your AP Workflow

When goods arrive at your facility or warehouse with a DANFE attached, your process should not stop at filing that piece of paper. You need the NF-e XML.

Obtaining the XML. Many Brazilian suppliers email the XML file directly to their customers, often at the time of invoice issuance. If your supplier does not send it automatically, you have two options:

1. Request the XML directly from the supplier as part of your standard purchasing terms.
2. Download it yourself from the SEFAZ portal using the 44-digit access key printed on the DANFE. Each state's SEFAZ website provides a public lookup tool where you enter the access key and retrieve the full XML.

Data entry. Your ERP or accounting system should ingest data from the XML file, not from manual transcription of the DANFE printout. The XML is machine-readable and structured, which eliminates transcription errors and ensures you capture all tax code fields that the DANFE may abbreviate or omit.

Matching process. A reliable practice is to match every DANFE received with its corresponding XML before approving payment. If you have a DANFE but no XML, flag that transaction as incomplete until the XML is secured.

The DACTE: Same Principle for Transport Invoices

The CT-e (electronic transport invoice) follows an identical model. Its printed companion document is the DACTE (Documento Auxiliar do Conhecimento de Transporte Eletronico). Like the DANFE, the DACTE is a visual summary for transport purposes only. The CT-e XML is the legally authoritative document, and the same rules about obtaining and archiving the XML apply.

Understanding which document holds legal authority directly determines what your organization must retain and for how long, which is the subject of the next section.

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Record Retention Obligations for Invoice Recipients

A common misconception among AP teams at foreign companies is that only the issuer of a Brazilian tax invoice bears responsibility for keeping records. In practice, Brazilian tax law imposes mandatory retention obligations on both the issuer and the recipient. If your organization receives NF-e invoices from Brazilian suppliers, you are legally required to retain those records and produce them on demand during a tax audit.

Retention Periods

The baseline retention period for Brazilian tax invoices is 5 years from the date of issuance, aligned with the general statute of limitations under the Codigo Tributario Nacional. However, as of May 2025, tax authorities have extended the effective retention window to 132 months (11 years) for certain tax credit and compliance verification purposes. Multinational companies that default to a standard 7-year global retention policy may find themselves exposed if Brazilian records are purged before that extended window closes.

For organizations managing invoice retention periods across different jurisdictions, Brazil sits at the stricter end of the spectrum, and the extended 132-month period makes it one of the longest mandatory windows among major economies.

What You Must Retain

The critical requirement is that you retain the NF-e XML file, not merely the DANFE printout. The XML is the legally authoritative document. A DANFE alone, whether printed or saved as a PDF, does not satisfy the retention obligation. Tax authorities will request the XML during audits, and presenting only a DANFE is treated as a failure to produce the invoice.

Additional format requirements apply to your retained records:

• Documents must be maintained in Portuguese.
• All values must be denominated in BRL (Brazilian Reais).
• Records must be producible upon request by the Receita Federal (the federal tax authority) or the relevant state fiscal authority (SEFAZ).

Consequences of Non-Compliance

The penalties for failing to produce invoice records are severe. Tax authorities can impose fines of up to 100% of the invoice value when a recipient cannot present the required XML documentation during an audit. Beyond direct fines, any tax credits your organization claimed on invoices that cannot be produced may be disallowed entirely, creating retroactive tax liabilities plus interest and penalties.

For companies with significant procurement volumes from Brazilian suppliers, the cumulative financial exposure from lost or inaccessible XML files can be substantial.

Practical Guidance for AP Teams

Establish automated XML retrieval. Work with your Brazilian suppliers to receive NF-e XML files directly at the time of invoicing, or set up periodic retrieval from the SEFAZ portal using your company's CNPJ credentials. Manual, ad-hoc collection creates gaps that only surface during audits, years after the fact.

Store XML files alongside other invoice formats. Your document management system needs to support indexing and storing XML files, not just PDFs and images. When dealing with high volumes of international supplier invoices, tools for extracting data from international invoices can help standardize the processing of documents received in different formats across jurisdictions.

Verify file integrity over time. XML files must remain accessible and uncorrupted across the full retention period. Implement periodic integrity checks, particularly if files are migrated between storage systems. A corrupted or unreadable XML is functionally equivalent to a missing one during an audit.

Account for document type variations. Different Brazilian fiscal document types, including NF-e, NFS-e (service invoices), and CT-e (transport documents), may carry slightly different retention rules depending on the issuing state or municipality. Do not assume a single retention policy covers all Brazilian invoice types uniformly.

Brazilian invoice retention obligations are notably strict by global standards, and the extended 132-month window leaves little margin for error. A systematic approach to retrieving, storing, and verifying incoming Brazilian invoice data is the most reliable way to prevent compliance gaps from compounding over time.

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Verification Checklist for Incoming Brazilian Invoices

This checklist consolidates the key verification points covered throughout this guide into a practical reference for processing incoming Brazilian invoices. Use it as a quick-reference tool each time your AP team receives a new NF-e from a Brazilian supplier.

Document Authenticity

• Confirm the invoice is an authorized NF-e XML file, not solely a printed or PDF DANFE.
• Locate the 44-digit access key (chave de acesso) on the document and validate it through the issuing state's SEFAZ portal.
• Verify that the NF-e carries a valid ICP-Brasil digital signature, confirming the document has not been altered since issuance.
• Check the authorization protocol number returned by SEFAZ, confirming the tax authority accepted the invoice.

Party Identification

• Confirm the issuer's CNPJ matches the vendor record in your ERP or accounts payable system.
• Verify the recipient CNPJ matches your company's Brazilian registration or the correct subsidiary entity.
• Cross-check the state registration (Inscricao Estadual) of both parties against your master data.

Operation and Product Classification

• Review the CFOP code on each line item to confirm it matches the nature of the transaction: domestic purchase, import, return, or inter-branch transfer.
• Verify that NCM codes correspond to the actual goods received, not a generic or mismatched classification.
• Examine the CST codes (or CSOSN for Simples Nacional suppliers) to confirm the correct tax treatment is applied to each item.

Tax Calculation Verification

• For each line item, verify that ICMS is calculated at the correct rate. Confirm whether inter-state or intra-state rates apply based on the origin and destination states.
• Check that IPI amounts reflect the correct rate for the product's NCM classification.
• Verify PIS and COFINS calculations against the applicable regime (cumulative or non-cumulative) and product-specific rates.
• For service invoices (NFS-e), confirm the ISS rate matches the rate published by the municipality where the service was provided.
• Validate that the total tax amounts are arithmetically consistent with line-item rates and quantities.

Retention Compliance

• Store the NF-e XML file in your document management system. The DANFE alone does not satisfy retention requirements.
• Tag and index stored files by access key, supplier CNPJ, and date for retrieval during audits.
• Maintain records for the full retention period (minimum five years under federal rules, with state-level extensions possible).
• Confirm that stored records remain accessible and readable for audit requests from SEFAZ, Receita Federal, or municipal tax authorities.

Cross-Border and Multi-Jurisdiction Considerations

Brazilian invoices present particular challenges for multi-jurisdiction AP teams because the XML format, Portuguese-language fields, and five-layer tax structure differ fundamentally from the VAT invoice formats used across Europe and Asia-Pacific. If your organization receives invoices from suppliers in Brazil alongside vendors in other regions, processing invoices in multiple languages and currencies requires clear jurisdiction-specific procedures to avoid misclassifying Brazilian tax codes or missing retention obligations that do not apply in other countries.

Looking Ahead: Brazil's 2026 Tax Reform

Brazil's tax reform, enacted under Constitutional Amendment 132/2023, will introduce two new tax types: IBS (Imposto sobre Bens e Servicos) and CBS (Contribuicao sobre Bens e Servicos). These taxes will begin appearing on invoices during the transition period that runs through 2033, gradually replacing ICMS, ISS, PIS, and COFINS. AP teams should monitor legislative updates from the Receita Federal and state tax authorities, update internal verification checklists as new fields appear on NF-e documents, and adjust ERP tax configurations to accommodate the dual-system period.