Time to review eSocial, the new Brazilian labor and social security tax ancillary obligations

Starting July 2018, companies that in 2016 had revenues of more than BRL 78,000,000.00 are enforced to assess and declare to the Brazilian IRS all of its data regarding labor, employee witholding income tax and social security taxations by way of the new system named as “eSocial”.

Such system completely overhaul the way the Brazilian companies and the Brazilian IRS handle such data. From now on, companies will be constantly monitored through data cross-checking. Any inaccuracies in the systems may trigger labor and tax authorities to promptly identify non-compliance practices, start remote inspections and issue notices of infraction for labor and tax debts collection and for imposing heavy fines.

In fact, companies now must internalize the intelligence and management of that knowledge, which more often than not was outsourced to companies specialized on labor, social security and payroll process. Therefore, a thorough revision of labor and payroll taxation are highly recommended for companies that have compliance as a rule. It is either a good opportunity to assess social security tax credits or to avoid any innacuracies that may trigger the Brazilian IRS to audit the company.

Pedro Ackel and Alessandra D’Elia

Pedro Ackel is the Coordinator of the Human Capital section at WFaria Advogados, which comprises Advisory and Litigation in Payroll Tax Law. He received his degree and post-graduate degree in Tax Law from Pontifical Catholic University of São Paulo and is a Legal Director of the Brazilian Association of BPO Companies.

Alessandra D’Elia is full lawyer at WFaria Advogados, specialist in Labor Law. Alessandra holds a law degree from the Pontifical Catholic University of Sao Paulo (PUC-SP) and a post-graduate degree in Material and Procedural Labor Law from the same institution.

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Graduado pela Pontifícia Universidade Católica de São Paulo (“PUC-SP”), Corradi possui MBA em Gestão Tributária pela FIPECAFI e Pós-Graduação em Direito Tributário pelo Instituto Brasileiro de Estudos Tributários – IBET.

E-mail: vcorradi@wfaria.com.br

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Graduado pela Pontifícia Universidade Católica de São Paulo (“PUC-SP”) e LLM em Direito Tributário pelo INSPER, Rubens é fundador do Grupo de Estudos da Reforma Tributária (“GERT”) e especialista em Contencioso e Consultivo Tributário.

E-mail: rsouza@wfaria.com.br

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Mestre em Direito Norte-Americano (LL.M.) com ênfase em International Business
Transactions pela University of Missouri-Kansas City (UMKC) School of Law, Hítalo também é Mestre em Fashion Law pela Universidade Presbiteriana Mackenzie e especialista em sistemas jurídicos contemporâneos pela Universidad Complutense de Madrid – UCM.

E-mail: hsilva@wfaria.com.br