Differences between Recibo, Nota Fiscal and Cupom Fiscal
Recibo and Nota Fiscal or Cupom Fiscal are terms commonly used to describe documents issued for transactions involving sales or services in Brazil. This article will give a short outline about the difference between these documents and the validity of these papers.
Nota Fiscal or Cupom Fiscal and Recibo
Nota Fiscal, which is commonly translated as invoice is an official document that proves the existence of a commercial transaction, for either buying and selling of goods or provision of services. This document is issued by a company to another company or an individual, and has several purposes, such as to report the transaction to the tax authorities, the transit of goods, register donations and lending. Some companies in the retail segment, in particular those that are selling to end customers, often issue a Cupom Fiscal. A Cupom Fiscal is very similar to a Nota Fiscal in terms of tax reporting, but it doesn’t contain the information from the buyer.
As for the Recibo, which can be translated as bill of sale or receipt, it is a document issued by a company to prove the payment of a service or a purchase. Different from the Nota Fiscal, Recibos have some legal validity, but are not considered to be an official document.
As you can see, the basic difference between these two papers is that once you issue a Nota Fiscal, the government will collect taxes from the services rendered and goods purchased, and with the Recibo it will not happen.
That is the reason why the Recibo has a temporary applicability. Legally, the issuer must convert the Recibo into a Nota Fiscal afterwards. This conversion can be done online, in this case it will be a NF-e, or on proper paper issued by a specific printer. The issuance of Notas Fiscais are mandatory whenever there is a taxable event, which in most cases, is the sales of goods or provision of services. The only people allowed to issue Recibos are some professionals providing services such as dentists, doctors, lawyers, psychologists, teachers etc.
These professionals must be registered with the Municipal Secretariat of Finance, pay their taxes annually and have their transactions registered in a cash book. The issuance of receipts is only allowed for professionals that are not structured in a legal entity. Once those professionals establish companies, they are required to issue Notas Fiscais for their services.
As for other economic activities, all of them are required to issue Notas Fiscais, even for companies that are exempt or immune from taxation. Legal entities are not allowed to provide Recibos instead of Notas Fiscais.
Issuing the documents
A Cupom Fiscal is only valid if issued by an automatic proper printer, named ECF. These printers are registered with the State Finance Secretariat and are connected to a computer programme that keeps all the data related to the financial transactions of the company. This device comes locked from the manufacturer and it can only be altered in the place where it was purchased.
It is mandatory for all companies engaged in sales activity, retail or in provision of services to use the ECF equipment. Cupons Fiscais issued by this machine have all the characteristics and information required by law. If for some reason the ECF stops working - due to a power failure, a sudden malfunction or robbery, for example, the company can provide a Nota Fiscal in paper form by hand. However, legally, the hand-written Nota Fiscal option can only be used when there is an emergency situation preventing the ECF use.
Different from the Cupom Fiscal that requires specific equipment to be produced, the electronic Nota Fiscal, or NF-e is often issued online through a specific website provided by the local municipality. Stored electronically, the NF-e has the same value as the printed Nota Fiscal, and is an initiative that assists the government with making the process easier and keeping track of all transactions in real time.
Among other benefits, the electronic Nota Fiscal reduces printing costs, encourages e-commerce practices and the usage of new technologies and reduces the storage costs, as the documents can be stored in digital files.
As for the Recibo, as stated above, it can only be used by some professionals providing services. This means that no one can sell goods and give Recibos instead of Notas Fiscais. That is because Recibos are very easy to falsify, and also as said previously, facilitates tax evasion.
Notas Fiscais and Recibos: How does it work in practice?
Everything you have read until this point is how everything should work legally. We know that tax evasion is one of the main problems the government have to deal with. This is due to the increasing number of governmental initiatives aiming to avoid crimes against the tax system. However, even with the government efforts, there are enough companies and individuals selling goods and services in Brazil without issuing Notas Fiscais.
Companies that completely ignore the obligation of issuing Notas Fiscais are numerous. Small businesses are normally the ones who give handwritten receipts as proof of payment, instead of issuing Notas Fiscais. Every paper given as proof of payment that was not printed out on an original ECF machine could potentially be considered suspicious, especially the hand written ones.
That is because they can very be easily altered, as it pleases to the seller. As these loose papers have no value for tax purposes, Recibos are often not declared to the revenue service. When the business owner has to report earnings and losses, they will illegally manipulate amounts, taking the chance to be caught by the tax auditors.
Although the tax supervision processes are getting more sophisticated in Brazil, the country still has a long way to go when it comes to Notas Fiscais and proper tax reporting. It is important to say that not everyone that does not issue a Nota Fiscal are intending to commit a crime, some of them can be misinformed, or do not possess an ECF machine.