The SAP, Brazilian tax and business terms used on this site, each in one clear sentence: what it is, how it shows up in SAP projects and what is changing.
At a glance
137 terms
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The SAP products, objects and methods that come up in every project.
Advanced Business Application Programming
ABAP (Advanced Business Application Programming) is SAP's own programming language, used for most of the standard SAP ERP code and for custom reports, interfaces, enhancements and forms.
The acronym first stood for the German Allgemeiner Berichts-Aufbereitungs-Prozessor (general report preparation processor). Modern ABAP reads data with ABAP SQL and CDS views; ABAP Cloud is the restricted model for clean-core extensions.
Universal Journal
ACDOCA is the SAP S/4HANA table of the Universal Journal, the single line-item table for general ledger, controlling, asset accounting, Material Ledger and margin analysis postings.
One posting writes one set of lines with every currency and dimension, so finance and controlling always reconcile. Plan data lives in ACDOCP and consolidation data in ACDOCU.
The business partner (BP) is SAP's single master record for customers, suppliers and other partners, holding names, addresses, bank details and tax numbers such as the CNPJ in one place.
In SAP S/4HANA it is mandatory: transaction BP replaces XD01 and XK01, and Customer-Vendor Integration (CVI) keeps the customer and supplier records in step with it.
A company code is the SAP organizational unit for which a complete, self-contained set of accounts is kept, normally one legal entity with its own balance sheet and profit and loss statement.
SAP Created in transaction OX02 (table T001) and assigned to a chart of accounts, a fiscal year variant and a local currency; in Brazil, each branch (filial) with its own CNPJ is a business place within the company code.
A controlling area is the SAP organizational unit for management accounting (CO), which groups one or more company codes whose costs and revenues are planned, allocated and reported together.
SAP Maintained in transaction OKKP (table TKA01). Its company codes must share the operative chart of accounts and the fiscal year variant, and its currency type decides the currency CO works in.
A country version, now called a local version, is the part of SAP that adapts the standard system to one country's laws, taxes and business practice: tax procedures, legal reports, electronic documents and languages.
The Brazilian version, for example, adds the nota fiscal, the TAXBRA and RVABRA tax procedures, CFOP determination and the SPED files.
Enterprise Resource Planning
ERP (Enterprise Resource Planning) is business software that runs a company's core processes, such as finance, purchasing, sales, production and inventory, on one integrated system with one database.
A sale, a goods movement and the accounting entry happen in the same system, so every area works with the same numbers. ERP grew out of MRP and MRP II planning systems.
Joule is SAP's generative AI assistant, built into SAP's cloud applications, which answers business questions, finds and changes data within the user's authorizations and hands larger tasks to AI agents.
SAP announced it on 26 September 2023. The base version is included in SAP cloud subscriptions; premium AI features are billed in AI Units.
The Material Ledger is the SAP component that values inventory in up to three currencies or valuations and, with actual costing, calculates the actual cost of materials at the end of each period.
It is always active in SAP S/4HANA; actual costing (CO-PC-ACT) is optional. It is common in Brazil, where many companies need inventory in BRL and in a hard currency.
Material Requirements Planning
MRP (Material Requirements Planning) is the planning run that compares demand with stock and open orders and proposes what to buy or produce, in what quantity and by when.
MRP II (Manufacturing Resource Planning) added capacity and financial planning; ERP grew out of both.
SAP In SAP S/4HANA the planning run is MRP Live (transaction MD01N), which runs on the SAP HANA database.
RISE with SAP is SAP's subscription offer, launched in January 2021, that bundles SAP S/4HANA Cloud (usually Private Edition), the infrastructure, technical operations and transformation tools in one contract with SAP.
It is SAP's main route for moving SAP ECC customers to SAP S/4HANA before the end of ECC maintenance.
Systeme, Anwendungen und Produkte in der DatenverarbeitungSystems, Applications and Products in Data Processing
SAP (Systeme, Anwendungen und Produkte in der Datenverarbeitung) is the German software company whose ERP systems, today SAP S/4HANA, run the finance, logistics and HR processes of many of the world's largest companies.
Five former IBM employees founded it in 1972 as Systemanalyse Programmentwicklung (system analysis and program development); the current name dates from 1976. Its ERP releases were R/2, R/3, SAP ERP (ECC) and SAP S/4HANA.
SAP Activate is SAP's methodology for implementing SAP S/4HANA and its cloud products, with the phases Discover, Prepare, Explore, Realize, Deploy and Run, and agile sprints in the Realize phase.
It replaced ASAP (Accelerated SAP), the phase-by-phase methodology of the SAP R/3 and ECC years. The Explore phase compares SAP's best practices with the company's needs (fit-to-standard).
SAP Document and Reporting Compliance
SAP Document and Reporting Compliance (DRC) is SAP's solution for electronic documents and statutory reports, such as e-invoices, SAF-T files and VAT returns, created in the format each tax authority requires.
It brings together SAP Document Compliance and Advanced Compliance Reporting (ACR). For Brazil it is the successor of SAP GRC NF-e (SAP Electronic Invoicing for Brazil) for the nota fiscal and SPED files.
SAP ERP Central Component
SAP ECC (ERP Central Component) is the core of SAP ERP 6.0, the SAP Business Suite release that came before SAP S/4HANA and still runs many companies today.
Its finance data is spread over tables such as BKPF/BSEG, the controlling and subledger tables, which SAP S/4HANA merged into the Universal Journal (ACDOCA).
Changing: Mainstream maintenance ends at the end of 2027 and optional extended maintenance at the end of 2030; the SAP ERP, private edition, transition option extends support for eligible systems until 2033.
SAP Fiori is SAP's design system and the role-based web apps built with it, which run in the browser on desktop, tablet and phone and replace many classic SAP GUI transactions.
SAP Users start the apps from the SAP Fiori launchpad; the SAP Fiori apps reference library lists every app with its ID, the roles that use it and the transaction it replaces.
SAP HANA is SAP's in-memory, column-oriented database, the only database SAP S/4HANA runs on, which also provides built-in analytics and machine learning libraries.
The name started as an acronym of High-Performance Analytic Appliance; SAP now uses it as a product name. Because totals are calculated on the fly, S/4HANA no longer needs most of the ECC total and index tables.
An SAP module is a functional area of SAP ERP with its own processes, master data and configuration, such as FI (Financial Accounting), CO (Controlling), MM (Materials Management), SD (Sales and Distribution) and PP (Production Planning).
The modules are integrated: a goods receipt in MM posts to FI and CO at the same moment. SAP now speaks of lines of business, but the module names are still used in every project.
An SAP Note is SAP's official, numbered document for a known issue or legal change, with the symptom, the cause and the solution, often including code corrections implemented with transaction SNOTE.
Many consultants still say OSS Note, from OSS (Online Service System), SAP's former support network. Notes and Knowledge Base Articles (KBAs) are found on SAP for Me and the SAP Support Portal.
SAP Business Suite 4 SAP HANA
SAP S/4HANA (SAP Business Suite 4 SAP HANA) is SAP's current ERP, launched in 2015, which runs only on the SAP HANA database and keeps finance line items in one table, the Universal Journal (ACDOCA).
It is offered on premise, as SAP S/4HANA Cloud Private Edition and as SAP S/4HANA Cloud Public Edition. The business partner replaces separate customer and vendor masters, and the Material Ledger is always active.
Transaction code
A T-code (transaction code) is the short code that opens an SAP GUI transaction directly, such as FB50 to post a G/L account document or SE16H to analyse a table.
Type it in the command field: /n plus the code opens it in the same window, /o plus the code in a new one.
Brazilian registrations, taxes, electronic documents and reports, as they appear in SAP projects. Portuguese names come with their English translation.
Carteira de Identidade NacionalNational Identity Card
CIN (Carteira de Identidade Nacional) is Brazil's new national identity card, issued by the state identification institutes to one national standard and numbered with the holder's CPF.
Created by Decree 10.977/2022 and issued since 2023, it has a QR code, a machine-readable zone and a digital version in the gov.br app; the first copy is free.
It is valid for 5 years under age 12, 10 years from 12 to 59 and has no expiry from age 60.
Cadastro Nacional da Pessoa JurídicaNational Register of Legal Entities
CNPJ (Cadastro Nacional da Pessoa Jurídica) is the 14-character national registration number that the Receita Federal gives to each company, branch and other legal entity in Brazil.
The first 8 characters are the root shared by the head office and its branches, the next 4 identify the establishment and the last 2 are check digits.
In the new alphanumeric format, letters A to Z may appear only in the first 12 positions; the 2 check digits stay numeric.
Changing: Since 31 July 2026 new registrations can receive an alphanumeric CNPJ (IN RFB 2.229/2024). Existing numeric CNPJs stay valid and do not change, so systems and fiscal documents must accept both formats.
SAP The CNPJ of a customer or supplier is tax number 1 (field STCD1) in the business partner's tax data; the company's own tax numbers are kept per business place (table J_1BBRANCH).
Cadastro de Pessoas FísicasIndividual Taxpayer Registry
CPF (Cadastro de Pessoas Físicas) is the 11-digit taxpayer number that the Receita Federal gives to each individual, Brazilian or foreign, and the main number that identifies a person in Brazil.
Registration is free, has no minimum age and is open to people living in Brazil or abroad.
Law 14.534/2023 made the CPF the single and sufficient number to identify a citizen in public databases, and it is also the number of the new identity card (CIN).
SAP The CPF is tax number 2 (field STCD2) of a business partner flagged as a natural person, entered as 11 digits without separators.
Inscrição EstadualState Registration
IE (Inscrição Estadual) is the state tax registration number that the SEFAZ of each state gives to ICMS taxpayers, such as traders, manufacturers and carriers, for each of their establishments.
Registration is required for those who sell goods or provide interstate or intermunicipal transport or communication services; the format and length differ from state to state.
The IE of the issuer, and of the recipient when it has one, is shown on the NF-e.
SAP The IE of a customer or supplier is tax number 3 (field STCD3); the company's own IE is kept per business place, with extra IEs per state when ICMS tax substitution applies.
Inscrição MunicipalMunicipal Registration
IM (Inscrição Municipal) is the registration number that a city government gives to companies and self-employed professionals in its tax register, mainly for the municipal service tax ISS.
Companies and self-employed professionals register with the city where they are established and must report changes, including closure.
In the city of São Paulo the register is called CCM (Cadastro de Contribuintes Mobiliários).
SAP The IM of a customer or supplier is tax number 4 (field STCD4); the company's own IM is kept per business place.
Registro GeralGeneral Registration
RG (Registro Geral) is the traditional Brazilian identity card and its number, issued by the identification institute of each state, so one person could hold different RG numbers in different states.
The card is the Carteira de Identidade regulated by Law 7.116/1983; unlike the CPF, the RG number is not a tax number.
Changing: Being replaced by the CIN, which uses the CPF as the single number. Old RG cards stay valid until 28 February 2032, and the CIN becomes mandatory on 1 March 2032 (Decree 10.977/2022).
Superintendência da Zona Franca de ManausSuperintendency of the Manaus Free Zone
SUFRAMA (Superintendência da Zona Franca de Manaus) is the federal autarchy that manages the Manaus Free Zone, the Free Trade Areas and the other tax incentive areas of the Amazon region.
The Manaus Free Zone (Zona Franca de Manaus, ZFM) is an industrial and trade area created by Decree-Law 288/1967 with incentives on import duty, IPI and ICMS, extended until 31 December 2073 by Constitutional Amendment 83/2014.
A company needs a SUFRAMA registration (inscrição) to use these incentives.
Banco Central do BrasilCentral Bank of Brazil
BCB (Banco Central do Brasil) is Brazil's central bank, a federal autarchy not linked to any ministry, whose main objective is to keep prices stable.
Autonomous since Complementary Law 179/2021, it regulates and supervises the financial system and sets the Selic rate through its Monetary Policy Committee (Copom).
It also runs the Pix instant payment system and publishes the PTAX exchange rate.
Comissão Nacional de ClassificaçãoNational Classification Commission
CONCLA (Comissão Nacional de Classificação) is the federal commission, chaired by IBGE, that sets the standards for and approves Brazil's official statistical classifications, such as the CNAE.
Its members come from IBGE and ten ministries, including Finance, under the Ministry of Planning and Budget (Portaria GM/MPO 218/2025).
The current CNAE-Subclasses 2.3, used in public registers such as the CNPJ, has been in force since 1 January 2019.
Conselho Nacional de Política FazendáriaNational Council for Fiscal Policy
CONFAZ (Conselho Nacional de Política Fazendária) is the council of the finance secretaries of all Brazilian states and the Federal District, chaired by the federal Minister of Finance, that coordinates ICMS policy.
Its ICMS agreements (Convênios ICMS) grant or revoke ICMS exemptions and other tax benefits.
Together with the Receita Federal it also approves the Ajustes SINIEF, which define national fiscal documents such as the NF-e and the CT-e.
Federação Brasileira de BancosBrazilian Federation of Banks
FEBRABAN (Federação Brasileira de Bancos) is the non-profit association, founded in 1967, that represents the main banks operating in Brazil.
It publishes the standard file layouts used between companies and banks, such as the CNAB files for payments and boleto collection.
It also runs a banking self-regulation program.
Instituto Brasileiro de Geografia e EstatísticaBrazilian Institute of Geography and Statistics
IBGE (Instituto Brasileiro de Geografia e Estatística) is Brazil's national institute for statistics and geography, a federal foundation linked to the Ministry of Planning and Budget.
It runs the census and official statistics and sets the codes of states and municipalities used in fiscal documents, such as the 7-digit municipality code on the NF-e.
It also manages the CNAE classification of economic activities, under the standards set by CONCLA.
Secretaria Especial da Receita Federal do BrasilSpecial Secretariat of the Federal Revenue of Brazil
Receita Federal (Secretaria Especial da Receita Federal do Brasil, RFB) is the federal tax and customs authority of Brazil, part of the Ministry of Finance (Ministério da Fazenda).
It administers federal taxes such as IRPJ, CSLL, PIS, COFINS, IPI and the new CBS, and controls customs and foreign trade.
It also runs the CPF and CNPJ registers and the SPED digital bookkeeping system.
Secretaria da FazendaState Finance Department
SEFAZ (Secretaria da Fazenda) is the finance and tax department of each Brazilian state and of the Federal District, which collects ICMS and authorizes the electronic fiscal documents issued there.
It keeps the register of state taxpayers (Inscrição Estadual) and must authorize each NF-e and NFC-e before the document is valid.
The official name varies by state, for example SEF in Minas Gerais and Santa Catarina.
Unidade FederativaFederative Unit
UF (Unidade Federativa) is each of the 27 federative units of Brazil, the 26 states and the Federal District, identified by a two-letter abbreviation such as SP or RJ.
IBGE gives each UF a two-digit code, such as 35 for São Paulo and 33 for Rio de Janeiro, which opens the NF-e access key.
ICMS rates and rules depend on the UF of origin and destination of each operation.
SAP The UF is the region of the address (for example SP for country BR), and the ICMS rates are kept per ship-from and ship-to region in transaction J1BTAX.
Contribuição para o Financiamento da Seguridade SocialContribution for the Financing of Social Security
COFINS (Contribuição para o Financiamento da Seguridade Social) is the Brazilian federal contribution on companies' gross revenue and on imports that funds social security, charged together with PIS under largely the same rules.
The rate is 7.6% in the non-cumulative regime (generally Lucro Real companies) and 3% in the cumulative regime (generally Lucro Presumido).
It is reported in the EFD-Contribuições.
Changing: Extinguished from 1 January 2027 and replaced by the federal CBS, which is only tested at 0.9% in 2026 (EC 132/2023, LC 214/2025).
SAP COFINS is calculated by TAXBRA (purchasing) and RVABRA (sales) with rates maintained in J1BTAX; the amounts are stored per nota fiscal item in J_1BNFSTX.
Contribuição Social sobre o Lucro LíquidoSocial Contribution on Net Profit
CSLL (Contribuição Social sobre o Lucro Líquido) is the Brazilian federal social contribution on company profit, calculated under the same regime as IRPJ and charged at 9% for most companies.
Under Lucro Presumido the base is 12% of gross revenue, or 32% for most services, increased by 10% on revenue above R$5 million a year from April 2026 (LC 224/2025).
Banks, insurers and other financial institutions pay higher rates.
Diferencial de Alíquota do ICMSICMS Rate Differential
DIFAL (Diferencial de Alíquota do ICMS) is the ICMS due to the destination state on interstate supplies to final consumers, equal to the gap between that state's internal rate and the interstate rate.
When the consumer is an ICMS taxpayer buying for use, consumption or fixed assets, the buyer pays it; when the consumer is not a taxpayer, the seller pays it.
EC 87/2015 extended it to sales to non-taxpayers, and LC 190/2022 regulated it nationally.
Changing: Disappears with ICMS under the tax reform (EC 132/2023, LC 214/2025): ICMS rates are cut step by step from 2029 to 2032 and ICMS is extinguished in 2033.
SAP SAP calculates DIFAL as additional ICMS conditions in TAXBRA, for purchases of consumption material and fixed assets, and in RVABRA, for sales to final consumers in other states.
Imposto sobre Operações relativas à Circulação de Mercadorias e sobre Prestações de Serviços de Transporte Interestadual e Intermunicipal e de ComunicaçãoTax on the Circulation of Goods and on Interstate and Intermunicipal Transport and Communication Services
ICMS (Imposto sobre Circulação de Mercadorias e Serviços) is the Brazilian state value-added tax on the circulation of goods, imports, and interstate and intermunicipal transport and communication services, charged non-cumulatively with credit for tax paid earlier.
Each state and the Federal District sets its own internal rates; interstate rates are 7% or 12%, and 4% for imported goods.
It is governed by Lei Complementar 87/1996 (Lei Kandir) and reported in the EFD ICMS/IPI.
Changing: Being replaced by the IBS under EC 132/2023 and LC 214/2025: ICMS rates are reduced by 10% in 2029, 20% in 2030, 30% in 2031 and 40% in 2032, and ICMS is extinguished in 2033.
SAP ICMS is calculated by the condition-based procedures TAXBRA (purchasing) and RVABRA (sales) from the ICMS rates maintained in J1BTAX, and stored per nota fiscal item in J_1BNFSTX.
ICMS por Substituição TributáriaICMS Tax Substitution
ICMS-ST (ICMS por Substituição Tributária) is the Brazilian regime in which one taxpayer in the supply chain, usually the manufacturer or importer, withholds and pays in advance the ICMS due on the later sales to the final consumer.
The ST base is a fixed or suggested final price, a weighted average consumer price (PMPF) or the operation value increased by an MVA.
In interstate sales the regime applies only where the states concerned have signed an agreement (convênio or protocolo); the general rules are in Convênio ICMS 142/2018.
Changing: Disappears with ICMS under the tax reform (EC 132/2023, LC 214/2025): ICMS rates are cut step by step from 2029 to 2032 and ICMS is extinguished in 2033.
SAP SAP calculates ICMS-ST (SubTrib) in TAXBRA and RVABRA from the SubTrib rates and margins maintained in J1BTAX, and stores the amounts per nota fiscal item in J_1BNFSTX.
Imposto de ImportaçãoImport Tax
II (Imposto de Importação) is the Brazilian federal import duty on foreign goods entering the country, charged on the customs value at the rate set for each NCM code in the Mercosur Common External Tariff (TEC).
The importer pays it at customs clearance, and it is part of the base of the IPI and the ICMS on imports.
Travellers' baggage above the duty-free allowance pays a flat 50%.
Instituto Nacional do Seguro SocialNational Social Security Institute
INSS (Instituto Nacional do Seguro Social) is Brazil's federal social security institute, and the name commonly used for the payroll social security contributions that employers pay and withhold from employees to fund pensions and benefits.
Employers generally pay 20% on payroll plus RAT (1% to 3%) and third-party contributions, and the Receita Federal collects them.
Employees pay 7.5% to 14%, progressively, up to the 2026 ceiling of R$8,475.55.
Imposto sobre Operações de Crédito, Câmbio e Seguro, ou relativas a Títulos ou Valores MobiliáriosTax on Credit, Exchange and Insurance Transactions or on Securities
IOF (Imposto sobre Operações de Crédito, Câmbio e Seguro, ou relativas a Títulos ou Valores Mobiliários) is the Brazilian federal tax on credit, foreign exchange, insurance and securities transactions.
Banks, foreign exchange institutions, insurers and brokers collect it from the customer and pay it to the Receita Federal.
As a regulatory tax, its rates can be changed by presidential decree within the limits set by law.
Imposto sobre Produtos IndustrializadosTax on Industrialized Products
IPI (Imposto sobre Produtos Industrializados) is the Brazilian federal excise tax on manufactured products, charged when goods leave an industrial or equivalent establishment and on customs clearance of imports, at rates set per NCM in the TIPI.
IPI is non-cumulative: the tax paid on inputs is credited against the tax due on outputs.
It is reported in the EFD ICMS/IPI.
Changing: From 1 January 2027 IPI rates are reduced to zero, except for products that are also manufactured in the Manaus Free Zone, under EC 132/2023 and LC 214/2025.
SAP IPI rates are maintained per NCM in J1BTAX and calculated by TAXBRA (purchasing) and RVABRA (sales); the amounts are stored per nota fiscal item in J_1BNFSTX.
Imposto sobre a Propriedade Predial e Territorial UrbanaTax on Urban Land and Building Property
IPTU (Imposto sobre a Propriedade Predial e Territorial Urbana) is the Brazilian municipal annual tax on the ownership of urban land and buildings, calculated on the property's assessed value (valor venal).
It is owed by the owner, the holder of the useful title or the possessor; each municipality sets its own rates, values and exemptions.
Rural land pays the federal ITR instead.
Imposto sobre a Propriedade de Veículos AutomotoresTax on Ownership of Motor Vehicles
IPVA (Imposto sobre a Propriedade de Veículos Automotores) is the Brazilian state annual tax on the ownership of motor vehicles, calculated on the vehicle's market value at rates set by each state.
The taxable event is usually ownership on 1 January, or the purchase or customs clearance date for a new vehicle.
Half of the revenue goes to the municipality where the vehicle is registered.
Imposto sobre a Renda das Pessoas JurídicasCorporate Income Tax
IRPJ (Imposto sobre a Renda das Pessoas Jurídicas) is the Brazilian federal corporate income tax, charged at 15% on taxable profit plus a 10% surtax on profit above R$20,000 a month.
The profit is determined under Lucro Real, Lucro Presumido or Lucro Arbitrado, in quarterly or annual periods.
It is reported in the ECF, together with the CSLL.
Imposto sobre a Renda Retido na FonteWithholding Income Tax
IRRF (Imposto sobre a Renda Retido na Fonte) is Brazilian income tax withheld at source, in which the paying party calculates, deducts and pays the tax on salaries, professional services, rent, royalties and payments abroad.
Since January 2026 (Lei 15.270/2025), profits and dividends above R$50,000 a month paid by one company to the same individual are subject to 10% IRRF.
SAP In SAP, IRRF on supplier payments is handled by extended withholding tax, with withholding tax types and codes assigned to the business partner and the company code.
Imposto Sobre Serviços de Qualquer NaturezaTax on Services of Any Nature
ISS (Imposto Sobre Serviços de Qualquer Natureza) is the Brazilian municipal indirect tax on the services listed in Lei Complementar 116/2003, charged on the service price at rates between 2% and 5%.
It is generally due to the municipality where the provider is established, with exceptions listed in the law, and the customer may have to withhold it.
Services are invoiced on the NFS-e.
Changing: Being replaced by the IBS under EC 132/2023 and LC 214/2025: ISS rates are reduced by 10% in 2029, 20% in 2030, 30% in 2031 and 40% in 2032, and ISS is extinguished in 2033.
SAP ISS is calculated by TAXBRA (purchasing) and RVABRA (sales) with the ISS rates maintained in J1BTAX.
Programa de Integração Social / Programa de Formação do Patrimônio do Servidor PúblicoSocial Integration Program / Public Servant Asset Formation Program
PIS (Programa de Integração Social) is the Brazilian federal contribution on companies' gross revenue, charged together with COFINS, that funds the salary bonus (abono salarial) and unemployment insurance.
The rate is 1.65% in the non-cumulative regime (generally Lucro Real companies) and 0.65% in the cumulative regime (generally Lucro Presumido); a PIS-Import also applies.
It is reported in the EFD-Contribuições.
Changing: Extinguished from 1 January 2027 and replaced by the federal CBS, which is only tested at 0.9% in 2026 (EC 132/2023, LC 214/2025).
SAP PIS is calculated by TAXBRA (purchasing) and RVABRA (sales) with rates maintained in J1BTAX; the amounts are stored per nota fiscal item in J_1BNFSTX.
Lucro PresumidoPresumed Profit
Lucro Presumido (Presumed Profit) is the Brazilian tax regime in which IRPJ and CSLL are calculated on a fixed percentage of gross revenue set by law for each activity, instead of the actual profit.
Companies with total revenue up to R$78 million in the previous year may opt; for IRPJ the percentages are mainly 8% for sales and industry and 32% for services.
LC 224/2025 increases these percentages by 10% on the part of annual revenue above R$5 million, from January 2026 for IRPJ and April 2026 for CSLL.
Lucro RealActual Profit
Lucro Real (Actual Profit) is the Brazilian tax regime in which IRPJ and CSLL are calculated on the company's accounting profit adjusted by the additions, exclusions and offsets that tax law requires or allows.
It is mandatory for companies with total revenue above R$78 million in the previous year and for banks and other activities listed in Lei 9.718/1998.
Companies under Lucro Real generally pay PIS and COFINS in the non-cumulative regime (9.25% with credits).
Microempreendedor IndividualIndividual Microentrepreneur
MEI (Microempreendedor Individual) is the Brazilian legal category for individual small entrepreneurs with revenue up to R$81,000 a year, who pay fixed monthly amounts of INSS, ICMS and/or ISS through the Simples Nacional.
The MEI has a CNPJ, may hire at most one employee and in 2026 pays R$81.05 a month for INSS plus R$1 of ICMS and/or R$5 of ISS.
Above the revenue limit the business must leave the MEI and become a microenterprise (ME).
Regime Especial Unificado de Arrecadação de Tributos e Contribuições devidos pelas Microempresas e Empresas de Pequeno PorteSpecial Unified Regime for the Collection of Taxes and Contributions due by Micro and Small Enterprises
Simples Nacional is the Brazilian simplified tax regime for micro and small companies with gross revenue up to R$4.8 million a year, which combines federal, state and municipal taxes in one monthly payment (DAS).
Rates come from progressive tables in the annexes of LC 123/2006, by activity and by gross revenue of the last 12 months.
From 2027 a Simples company may choose to pay IBS and CBS under the regular regime instead of in the DAS, which gives its business customers full credits.
Regime tributárioTax regime
Tax regime (regime tributário) is the method a Brazilian company adopts for the calendar year to calculate its taxes: Lucro Real, Lucro Presumido or Simples Nacional, with Lucro Arbitrado used in exceptional cases.
The regime drives how IRPJ and CSLL are calculated, whether PIS and COFINS are cumulative or non-cumulative and, in Simples Nacional, a single monthly payment of most taxes.
MEI is a special category within Simples Nacional for individual microentrepreneurs.
Contribuição Social sobre Bens e ServiçosSocial Contribution on Goods and Services
CBS (Contribuição Social sobre Bens e Serviços) is the federal value-added contribution created by Brazil's tax reform, charged non-cumulatively on goods and services with full credit, which replaces PIS and COFINS from 2027.
Together with the IBS it forms Brazil's dual VAT under EC 132/2023 and LC 214/2025; it is not charged on exports and is charged on imports.
In 2026 it is tested at 0.9% on fiscal documents, with payment waived for taxpayers that meet the ancillary obligations.
Changing: Phasing in: test year 2026 at 0.9%; charged in full from 1 January 2027, when PIS and COFINS are extinguished (EC 132/2023, LC 214/2025).
Comitê Gestor do Imposto sobre Bens e ServiçosIBS Management Committee
CGIBS (Comitê Gestor do Imposto sobre Bens e Serviços) is the public entity through which Brazilian states, the Federal District and municipalities jointly regulate, collect and distribute the IBS and judge its administrative disputes.
It was instituted by Lei Complementar 227 of 13 January 2026, is based in the Federal District and has technical, administrative and financial independence.
Its Conselho Superior has 27 members for the states and the Federal District and 27 for the municipalities.
Imposto sobre Bens e ServiçosTax on Goods and Services
IBS (Imposto sobre Bens e Serviços) is the value-added tax shared by Brazilian states and municipalities under the tax reform, charged at destination with full credit, which replaces ICMS and ISS by 2033.
The states and municipalities administer it jointly through the Comitê Gestor do IBS (CGIBS).
It is tested at 0.1% in 2026, rises as ICMS and ISS are cut from 2029 to 2032, and is fully in force in 2033.
Changing: Phasing in under EC 132/2023 and LC 214/2025: test rate of 0.1% in 2026, gradual increase from 2029 to 2032 as ICMS and ISS are reduced, full model in 2033.
Imposto SeletivoSelective Tax
IS (Imposto Seletivo) is the federal excise tax created by Brazil's tax reform on goods and services harmful to health or the environment, such as tobacco, alcoholic and sugary drinks, vehicles and mineral extraction.
It also covers vessels, aircraft, prediction contests and fantasy sports.
It starts in 2027; at the end of October 2026 its rates had not yet been published and must be set by ordinary law.
Changing: Created by EC 132/2023 and LC 214/2025 and charged from 2027; its rates were still pending in October 2026.
Split payment is the collection method of Brazil's tax reform in which the payment provider separates the CBS and IBS from the amount paid for a good or service and sends it to the tax authorities at settlement.
It is provided for in LC 214/2025; the first tests cover Pix, boleto, TED and TEF, run by the Receita Federal and the CGIBS with payment service providers.
Changing: Integration tests with payment providers started on 15 October 2026; use is planned to start gradually in 2027, initially optional and for business-to-business payments.
Código de Classificação Tributária do IBS e da CBSIBS and CBS Tax Classification Code
cClassTrib (Código de Classificação Tributária do IBS e da CBS) is the six-digit code on each fiscal document item that links its IBS and CBS treatment, such as standard rate, reduction or exemption, to a provision of LC 214/2025.
Its first three digits repeat the CST of IBS and CBS, and the official table is published as Informe Técnico 2025.002 on the national NF-e portal.
NT 2025.002 added it to the NF-e and NFC-e layouts, and filling the IBS and CBS group is mandatory for regular-regime taxpayers since 3 August 2026.
Código Especificador da Substituição TributáriaTax Substitution Specifier Code
CEST (Código Especificador da Substituição Tributária) is the seven-digit code that identifies goods subject to ICMS tax substitution, listed by segment in the annexes of Convênio ICMS 142/2018.
Digits 1–2 give the segment, 3–5 the item and 6–7 the item's specification.
It must be shown on the fiscal document for these goods, together with the NCM, even when the operation itself is not under tax substitution.
Código Fiscal de Operações e PrestaçõesFiscal Code for Operations and Services
CFOP (Código Fiscal de Operações e Prestações) is the four-digit code that classifies each item of a Brazilian nota fiscal by type of operation, such as purchase, sale, transfer, return or remittance.
The first digit gives the direction and origin or destination: 1, 2 or 3 for inbound from the same state, another state or abroad, and 5, 6 or 7 for outbound.
The table is an annex to Convênio SINIEF s/nº of 15 December 1970 and is updated through Ajustes SINIEF.
SAP Each nota fiscal item stores its CFOP in field CFOP of table J_1BNFLIN, proposed by the CFOP determination in customizing.
Classificação Nacional de Atividades EconômicasNational Classification of Economic Activities
CNAE (Classificação Nacional de Atividades Econômicas) is Brazil's official classification of economic activities, managed by IBGE under CONCLA standards, that identifies each company's activities in its CNPJ and other public registries.
Companies are registered with seven-digit subclass codes, such as 62.04-0/00 for IT consulting, from CNAE-Subclasses version 2.3, in force since 2019.
The CNAE decides, among other things, whether a company can join Simples Nacional and which annex and rates apply.
Código de Situação TributáriaTax Situation Code
CST (Código de Situação Tributária) is the code on each Brazilian nota fiscal item that states how a tax applies to it, for example fully taxed, reduced base, exempt, suspended or under tax substitution.
There are separate CSTs for ICMS (an origin digit plus two digits), IPI, PIS and COFINS, and NT 2025.002 added a three-digit CST for IBS and CBS.
Companies in Simples Nacional use the CSOSN instead of the ICMS CST.
SAP In SAP the CSTs come from the ICMS, IPI, PIS and COFINS tax laws assigned to each nota fiscal item (table J_1BNFLIN).
Margem de Valor AgregadoValue-Added Margin
MVA (Margem de Valor Agregado) is the percentage added to the value of an operation to estimate the final consumer price used as the ICMS tax substitution (ICMS-ST) base, set per product by state law or agreement.
The base is the seller's price plus freight, insurance, taxes and other charges, increased by the MVA.
In interstate sales the MVA is adjusted: MVA ajustada = [(1 + original MVA) × (1 − interstate rate) / (1 − internal rate)] − 1.
SAP In SAP the MVA is maintained with the SubTrib (ICMS-ST) tax rates in J1BTAX, where it is called the surcharge.
Nomenclatura Brasileira de Serviços, Intangíveis e Outras Operações que Produzam Variações no PatrimônioBrazilian Nomenclature of Services, Intangibles and Other Operations that Produce Changes in Net Worth
NBS (Nomenclatura Brasileira de Serviços, Intangíveis e Outras Operações que Produzam Variações no Patrimônio) is Brazil's national classification of services and intangibles, used in taxation, foreign trade and public policy.
It was created by Decreto 7.708/2012 and is maintained by the MDIC and the Receita Federal, with explanatory notes called NEBS.
The tax reform uses it to identify services with reduced IBS and CBS rates, and a joint MDIC and Ministry of Finance committee created in January 2026 manages its updates.
Nomenclatura Comum do MercosulMercosur Common Nomenclature
NCM (Nomenclatura Comum do Mercosul) is the eight-digit goods classification shared by the Mercosur countries, whose first six digits follow the international Harmonized System (HS) and the last two are set by Mercosur.
In Brazil the NCM drives the import duty rates (TEC), the IPI rates (TIPI) and many ICMS, ICMS-ST and IBS/CBS rules, and it is required on every NF-e item.
SAP The NCM is maintained in the material master as the control code (field STEUC, table MARC, in the foreign trade / country-specific data) and copied to the nota fiscal item (J_1BNFLIN-NBM).
Carta de Correção EletrônicaElectronic Correction Letter
CC-e (Carta de Correção Eletrônica) is the electronic event that corrects certain errors in an NF-e after its authorization, signed by the issuer and registered by the SEFAZ.
It cannot change the values that set the tax (value, base, rate, quantity, price), a change of sender or recipient, or the issue or exit date.
Each new CC-e must repeat all earlier corrections, and paper correction letters are not accepted for NF-e since 1 July 2012.
Chave de AcessoAccess key
Chave de acesso is the 44-character key that uniquely identifies each NF-e and other Brazilian electronic fiscal documents, used to look them up online and printed on the DANFE.
It holds the IBGE state code, the year and month of issue, the issuer's CNPJ, the model, series and number, the issue type, a random code and a check digit.
Changing: Since July 2026 the 14 CNPJ positions of the key can hold letters for issuers with an alphanumeric CNPJ, and the check digit follows the same ASCII-based rule (Nota Técnica Conjunta 2025.001); the key stays 44 positions long.
SAP The parts of the access key and the authorization status of each NF-e are stored in table J_1BNFE_ACTIVE, shown in the NF-e monitor (J1BNFE).
Conhecimento de Transporte EletrônicoElectronic Bill of Lading
CT-e (Conhecimento de Transporte Eletrônico) is the electronic fiscal document, model 57, that a carrier issues for each cargo transport service by road, rail, water, air or pipeline in Brazil.
Created by Ajuste SINIEF 09/2007, it replaced the paper bills of lading (models 8, 9, 10 and 11, among others) and travels as a printed DACTE.
It records the ICMS on interstate and intermunicipal freight.
Documento Auxiliar da Nota Fiscal EletrônicaAuxiliary Document of the Electronic Invoice
DANFE (Documento Auxiliar da Nota Fiscal Eletrônica) is the simplified printed representation of an NF-e that travels with the goods; it is not the NF-e itself and does not replace it.
It shows the access key and its barcode, so tax inspectors and the buyer can check the NF-e online.
Each NF-e has a single DANFE, which must accompany the goods in transit.
Manifesto Eletrônico de Documentos FiscaisElectronic Manifest of Fiscal Documents
MDF-e (Manifesto Eletrônico de Documentos Fiscais) is the electronic document, model 58, that links all the NF-e or CT-e carried in one vehicle to that transport.
Carriers that issue CT-e and companies moving goods in their own or hired vehicles must issue it (Ajuste SINIEF 21/2010); a printed DAMDFE travels with the cargo.
It must be closed (encerramento) at the end of the trip, and no new MDF-e is authorized for the same vehicle and route while one is open.
Nota Fiscal EletrônicaElectronic Invoice
NF-e (Nota Fiscal Eletrônica) is the electronic nota fiscal, model 55: a digitally signed XML file that exists only in electronic form and records sales and other movements of goods in Brazil.
It is valid only after the issuer signs it with an ICP-Brasil certificate and the SEFAZ grants the authorization of use; the printed DANFE travels with the goods.
It replaced the paper nota fiscal models 1 and 1-A under Ajuste SINIEF 07/2005.
Changing: Since 2026 the layout carries IBS, CBS and IS groups (NT 2025.002-RTC) that regular-regime taxpayers must fill; the automatic rejection planned for 3 August 2026 was postponed (Ato Técnico Conjunto RFB/CGIBS 01/2026). Since July 2026 the issuer's CNPJ can also be alphanumeric.
SAP The nota fiscal (J_1BNFDOC, J_1BNFLIN) is converted to XML and sent to the SEFAZ by SAP Document and Reporting Compliance, successor of SAP GRC NF-e; the status is followed in the NF-e monitor (J1BNFE).
Nota Fiscal de Consumidor EletrônicaElectronic Consumer Invoice
NFC-e (Nota Fiscal de Consumidor Eletrônica) is the electronic nota fiscal, model 65, for retail sales of goods to final consumers, in the shop or with home delivery.
It replaces the paper consumer invoice (model 2) and the cupom fiscal printed by ECF machines; the buyer gets a simplified DANFE NFC-e with a QR code to check it online.
In São Paulo it also replaced the SAT CF-e, which is no longer valid for sales from 1 January 2026.
Nota Fiscal de Serviço EletrônicaElectronic Service Invoice
NFS-e (Nota Fiscal de Serviço Eletrônica) is the electronic nota fiscal for services, issued under the municipal ISS rules and now shared in a single national standard (Padrão Nacional).
A municipality can use the public Emissor Nacional or keep its own system adapted to the national layout; MEI micro-entrepreneurs must use the Emissor Nacional.
All notes go to the national data environment (ADN), the central repository of NFS-e.
Changing: Since 1 January 2026 all municipalities must share their NFS-e with the ADN in the national layout (LC 214/2025, art. 62). Under Ato Conjunto RFB/CGIBS 4/2026, IBS and CBS must be shown from 1 October 2026 for most ISS services and from 1 December 2026 for the other cases, with no rejection until 31 December 2026.
Nota FiscalFiscal invoice
Nota fiscal is the Brazilian fiscal document that records a movement of goods or a service, such as a sale, transfer or return, together with the taxes on it.
Today almost all are electronic: NF-e for goods, NFC-e for retail sales to consumers and NFS-e for services, while freight uses the CT-e.
An inbound nota fiscal is issued by the supplier and booked by the buyer; an outbound one is issued by the company itself.
SAP The nota fiscal is a document with header table J_1BNFDOC and items J_1BNFLIN, created from billing, goods movements or invoice verification and displayed with J1B3N.
Controle de Crédito de ICMS do Ativo PermanenteICMS Credit Control for Fixed Assets
CIAP (Controle de Crédito de ICMS do Ativo Permanente) is the control a company keeps of the ICMS paid on fixed assets, which it recovers as a credit in 48 monthly installments weighted by its share of taxed outputs.
The 1/48 rule comes from Lei Complementar 87/1996 (article 20, §5); if the asset is sold within four years, the credit for the remaining months is lost.
The control is reported in block G of the EFD ICMS/IPI.
Declaração de Débitos e Créditos Tributários Federais Previdenciários e de Outras Entidades e FundosDeclaration of Federal Tax and Social Security Debits and Credits and of Other Entities and Funds
DCTFWeb (Declaração de Débitos e Créditos Tributários Federais Previdenciários e de Outras Entidades e Fundos) is the Receita Federal's monthly return of federal tax debts and credits, from which the company issues the DARF to pay them.
It is built from eSocial and EFD-Reinf data, plus the MIT module (Módulo de Inclusão de Tributos) for other federal taxes, and is due by the last business day of the following month.
From January 2025 it absorbed the old DCTF, so taxes such as IRPJ, CSLL, PIS, COFINS and IPI are now declared in it through the MIT.
Declaração do Imposto sobre a Renda Retido na FonteWithholding Income Tax Return
DIRF (Declaração do Imposto sobre a Renda Retido na Fonte) was the annual return in which Brazilian payers reported to the Receita Federal the income they paid and the income tax and contributions they withheld.
The same withholding data now goes to eSocial for employment income and to EFD-Reinf for other payments.
Obsolete: Replaced by eSocial and EFD-Reinf for facts from 1 January 2025; the last DIRF (DIRF 2025, for calendar year 2024) was due on 28 February 2025.
Escrituração Contábil DigitalDigital Accounting Bookkeeping
ECD (Escrituração Contábil Digital) is the annual SPED file in which a Brazilian company sends its full accounting books, including journal entries, trial balances, balance sheet and income statement, to the Receita Federal.
It replaces the paper journal and ledger (Livro Diário and Livro Razão) and is due by the last business day of June of the following year.
Its main blocks are 0 (opening and identification), I (postings and balances), J (financial statements) and 9 (closing).
SAP SAP S/4HANA generates the ECD file from the general ledger with the ECD report of SAP Document and Reporting Compliance, or with the Tax Declaration Framework (TDF).
Escrituração Contábil FiscalTax Accounting Bookkeeping
ECF (Escrituração Contábil Fiscal) is the annual SPED file in which a Brazilian company reports to the Receita Federal how it calculated its corporate income tax (IRPJ) and social contribution on net profit (CSLL).
It replaced the DIPJ return from calendar year 2014 and is due by the last business day of July of the following year.
It includes the e-Lalur and e-Lacs, the registers that adjust accounting profit to taxable profit, and reuses the balances of the ECD.
SAP The Tax Declaration Framework (TDF) in SAP generates the ECF file.
Escrituração Fiscal Digital ICMS IPIDigital Tax Bookkeeping for ICMS and IPI
EFD ICMS/IPI (Escrituração Fiscal Digital ICMS IPI) is the monthly SPED file in which ICMS and IPI taxpayers report their tax documents, inventory and tax assessments to the state tax authority and the Receita Federal.
It replaced the paper books of inbound and outbound documents, inventory and tax assessment, and includes the CIAP control (block G) and, for many manufacturers, the production and inventory control (block K).
Changing: IBS, CBS and IS are not recorded in the EFD ICMS/IPI. Under the tax reform, IPI rates fall to zero from 2027 except for products made in the Manaus Free Zone, and ICMS is phased down from 2029 and extinguished in 2033.
SAP SAP generates the file with the EFD ICMS IPI report of SAP Document and Reporting Compliance or with the Tax Declaration Framework (TDF).
Escrituração Fiscal Digital das Contribuições incidentes sobre a ReceitaDigital Tax Bookkeeping of Contributions on Revenue
EFD-Contribuições (Escrituração Fiscal Digital das Contribuições incidentes sobre a Receita) is the monthly SPED file in which Brazilian companies report the revenues, credits and calculation of PIS/Pasep and COFINS to the Receita Federal.
It is a separate file from the EFD ICMS/IPI, with its own layout and program, and covers both the cumulative and the non-cumulative PIS/COFINS regimes.
Changing: PIS and COFINS are extinguished and replaced by the CBS from January 2027. Under Receita Federal Nota Técnica 011/2026 the file will not be used for new PIS/COFINS facts from then, but stays available for at least five years for corrections and for credit balances built up to 31 December 2026.
SAP The Tax Declaration Framework (TDF) in SAP generates the EFD-Contribuições file.
Escrituração Fiscal Digital de Retenções e Outras Informações FiscaisDigital Tax Bookkeeping of Withholdings and Other Tax Information
EFD-Reinf (Escrituração Fiscal Digital de Retenções e Outras Informações Fiscais) is the SPED module where companies report the income tax and social contributions withheld on payments other than wages, plus contributions such as the CPRB.
It complements eSocial, and together they feed the DCTFWeb, which calculates the federal debts and releases the DARF for payment.
Since 1 January 2025 it carries the withholding data that used to go in the DIRF.
Sistema de Escrituração Digital das Obrigações Fiscais, Previdenciárias e TrabalhistasDigital Bookkeeping System for Tax, Social Security and Labor Obligations
eSocial (Sistema de Escrituração Digital das Obrigações Fiscais, Previdenciárias e Trabalhistas) is the Brazilian government system in which employers report, as electronic events, their workers' hiring, payroll, leave, dismissal and the related tax and social security data.
It was created by Decreto 8.373/2014 to replace separate returns to the labor, social security and tax authorities.
With EFD-Reinf it feeds the DCTFWeb, and since 1 January 2025 it also carries the income tax withheld on employment income that used to go in the DIRF.
SAP In SAP, the eSocial events come from the Brazilian HR and payroll localization (Payroll Brazil, PY-BR).
Ficha de Conteúdo de ImportaçãoImport Content Form
FCI (Ficha de Conteúdo de Importação) is the electronic form in which a Brazilian manufacturer declares the import content of a product made with imported inputs, which decides whether the 4% interstate ICMS rate applies.
Under Senate Resolution 13/2012 the 4% rate applies to imported goods resold as they are and to manufactured goods with import content above 40%; the procedure is set by Convênio ICMS 38/2013.
Each FCI returns a 36-character control number that must be shown on the NF-e item (field nFCI).
Guia de Informação e Apuração do ICMSICMS Information and Assessment Return
GIA (Guia de Informação e Apuração do ICMS) is the monthly state return in which ICMS taxpayers summarize their ICMS debits, credits and balance due, best known from São Paulo, where it ran alongside the EFD ICMS/IPI.
Some states keep their own GIA; Rio Grande do Sul, for example, can now generate it automatically from the EFD.
GIA-ST is the related return for the ICMS-ST that a registered substitute owes to another state.
Changing: São Paulo no longer requires the GIA for operations from 1 January 2026 (Portaria SRE 2/2025), only the EFD ICMS/IPI; GIAs for earlier periods must still be filed or corrected. São Paulo also dropped the GIA-ST for out-of-state substitutes from July 2025, and other states are doing the same.
Pedido Eletrônico de Restituição, Ressarcimento ou Reembolso e Declaração de CompensaçãoElectronic Request for Refund, Reimbursement or Repayment and Offset Declaration
PER/DCOMP (Pedido Eletrônico de Restituição, Ressarcimento ou Reembolso e Declaração de Compensação) is the Receita Federal's electronic form for claiming back federal taxes paid in excess or tax credits, or offsetting them against other federal tax debts.
It is filed online in e-CAC (PER/DCOMP Web) or with the PGD PER/DCOMP program, for example to recover IPI, PIS and COFINS credits.
An offset settles the debt when it is declared, subject to review: the Receita Federal has five years to reject it.
Sistema Público de Escrituração DigitalPublic System of Digital Bookkeeping
SPED (Sistema Público de Escrituração Digital) is the Brazilian government's digital bookkeeping system, created in 2007, through which companies send their accounting, tax and payroll books and returns to the authorities as signed electronic files.
Its modules include the ECD, ECF, EFD ICMS/IPI, EFD-Contribuições, EFD-Reinf and eSocial, along with electronic invoices such as the NF-e.
The ECD, ECF and EFD files are validated and signed with an ICP-Brasil digital certificate in the Receita Federal's PVA validator program before they are sent.
SAP In SAP S/4HANA the SPED files are generated by SAP Document and Reporting Compliance (statutory reporting for Brazil) or, in many existing systems, by the Tax Declaration Framework (TDF).
Boleto bancárioBank payment slip
Boleto (boleto bancário) is a Brazilian payment slip that a company registers with its bank to collect a set amount from a customer, who pays it by its bar code or typeable line in any bank or banking app.
Since October 2018 banks only accept boletos registered in FEBRABAN's Nova Plataforma de Cobrança, which also lets overdue boletos be paid at any bank.
Bank boletos carry a 44-digit bar code and a 47-digit typeable line (linha digitável), and many now also show a Pix QR code.
SAP In SAP, the payment program (F110) both pays supplier boletos, sending their bar codes to the bank in CNAB files, and creates the remittance files that register customer boletos with the bank.
Centro Nacional de Automação BancáriaNational Center for Banking Automation
CNAB (Centro Nacional de Automação Bancária) is the family of FEBRABAN standard bank file layouts, CNAB 240 and CNAB 400, that Brazilian banks and companies use to exchange payment, collection and statement files.
CNAB 240 has 240-character records grouped in batches and covers payments (including Pix and tax slips), boleto collection and bank statements; CNAB 400 is an older layout still used by many banks for collection.
The company sends a remittance file (remessa) and the bank answers with a return file (retorno).
SAP In SAP, the payment program (F110) creates CNAB remittance files through payment medium formats built in the DMEE tree editor (Payment Medium Workbench).
Drex is the Banco Central do Brasil's project for a digital financial infrastructure for the Brazilian real, first tested as a blockchain-based digital real for tokenized assets and payments.
Its pilot ran from 2023 to the first half of 2025 on a distributed ledger network (Hyperledger Besu), testing the settlement of tokenized federal bonds and other assets between institutions.
Changing: The Central Bank switched off the DLT pilot platform in November 2025, saying the technology was not viable. The next phase drops blockchain and focuses on reconciling liens (gravames) on assets used as credit collateral; as of October 2026 no public launch date has been set.
Duplicata mercantilTrade bill
Duplicata (duplicata mercantil) is a Brazilian credit instrument that a seller issues against its buyer for a sale of goods or services on credit, based on the invoice, and can collect, discount or pledge with a bank.
It is governed by Lei 5.474/1968; the buyer (sacado) accepts it, and the bank only collects it, discounts it or takes it as collateral.
The electronic duplicata escritural of Lei 13.775/2018 is recorded with registrars authorized by the Central Bank, such as B3 and CERC.
Changing: The duplicata escritural went live on 30 June 2026. Financial institutions will only negotiate duplicatas escriturais, phased in by issuer size: expected from about June 2027 for large companies, December 2027 for medium and June 2028 for small ones.
Pix is the instant payment system of the Banco Central do Brasil, launched on 16 November 2020, that moves money between accounts in seconds, at any time and on any day, using a key, QR code or account details.
A Pix key can be a CPF or CNPJ, a mobile number, an email address or a random key; the Central Bank settles the transfers in its Instant Payments System (SPI).
Pix Automático, for recurring payments authorized once, started on 16 June 2025, and Pix handled nearly 80 billion transactions in 2025.
SAP In SAP, supplier payments by Pix can run through the payment program (F110) in CNAB 240 files, whose FEBRABAN layout has a Pix segment (J-52).
PTAX is the reference exchange rate between the US dollar and the Brazilian real that the Banco Central do Brasil calculates and publishes every business day, as a buying and a selling rate.
It is the average of four quote windows with the Central Bank's foreign exchange dealers between 10:00 and 13:10, and is widely used in contracts, accounting and tax conversions.
The name comes from PTAX800, the Sisbacen transaction that published the rates until 2014.
SAP In SAP, the PTAX buying and selling rates are usually loaded daily into the exchange rate table TCURR (transaction OB08), each under its own exchange rate type.
Sistema Especial de Liquidação e de CustódiaSpecial System for Settlement and Custody
Selic (Sistema Especial de Liquidação e de Custódia) is the Central Bank's custody and settlement system for federal government bonds, and also the name of Brazil's basic interest rate, the Selic rate, whose target the Copom sets.
The Selic rate is the average rate of overnight loans backed by federal bonds settled in the system, and the Copom reviews its target eight times a year.
Late-payment interest on federal taxes is the Selic rate accumulated from the month after the due date, plus 1% for the month of payment.
Latin America
LATAM is the common business abbreviation for Latin America, the Spanish- and Portuguese-speaking countries of the Americas from Mexico to Argentina, used by companies as a sales and reporting region.
Electronic invoicing cleared or reported to the tax authority is mandatory in most LATAM countries, such as the NF-e in Brazil and the CFDI in Mexico.
SAP SAP Document and Reporting Compliance covers the electronic invoicing of the main LATAM countries, such as the NF-e in Brazil and the CFDI in Mexico.
Mercado Común del SurSouthern Common Market
Mercosur (Mercado Común del Sur, Mercosul in Portuguese) is the South American trade bloc created by the Treaty of Asunción in 1991, with a common external tariff based on the NCM goods nomenclature.
Argentina, Brazil, Paraguay and Uruguay are full members, Bolivia is a member in the accession process and Venezuela is suspended.
Its interim trade agreement with the European Union has applied provisionally since 1 May 2026.
VAT, e-invoicing and payment terms of SAP rollouts in the European Union.
The EC Sales List, called the recapitulative statement in the VAT Directive, is the periodic return in which a supplier lists its tax-free sales of goods and reverse-charge services to VAT-registered customers in other EU countries.
It gives each customer's VAT ID and the total value, so the customer's country can match it with the acquisition declared there.
It is due monthly, or quarterly where intra-EU sales of goods stay at or below €50,000 a quarter; in the UK only Northern Ireland businesses still file it, for goods.
SAP In SAP S/4HANA it is generated country by country in SAP Document and Reporting Compliance (Run Statutory Reports app).
Europe, the Middle East and Africa
EMEA (Europe, the Middle East and Africa) is the business region that global companies and SAP programmes use to group their European, Middle Eastern and African operations for sales, support, shared services and rollouts.
Most global organisations split the world into the Americas, EMEA and Asia Pacific (APAC). An EMEA rollout template usually has to cover EU VAT, the UK after Brexit and the VAT systems of Gulf countries such as Saudi Arabia and the UAE.
The euro (EUR, €) is the single currency of 21 of the 27 EU member states, together called the euro area or eurozone, whose monetary policy is set by the European Central Bank in Frankfurt.
It started on 1 January 1999 for accounts and payments, with notes and coins from 1 January 2002.
Bulgaria became the 21st member on 1 January 2026; Czechia, Denmark, Hungary, Poland, Romania and Sweden keep their own currencies.
Intrastat is the EU system for collecting statistics on trade in goods between member states, in which businesses above a national threshold report their monthly arrivals and dispatches of goods.
It began in January 1993, when customs formalities between EU countries ended; each country sets its own thresholds, separately for arrivals and dispatches.
Since 2022 it follows the European Business Statistics Regulation (EU) 2019/2152, under which member states exchange data on intra-EU exports, including the customer's VAT ID.
Peppol is an international network and set of document standards for exchanging e-invoices, orders and other business documents, in which sender and receiver each connect through their own accredited service provider (the four-corner model).
It began in 2008 as an EU project, Pan-European Public Procurement OnLine, and is now run by OpenPeppol, a non-profit association under Belgian law.
Belgium has required B2B e-invoices over Peppol since January 2026.
SAP In SAP S/4HANA, Peppol e-invoices are created, sent and received as eDocuments of SAP Document and Reporting Compliance.
Reverse charge is the VAT rule under which the customer, not the supplier, accounts for the VAT on a purchase, declaring it as output tax and usually deducting it as input tax in the same return.
It applies to most B2B services bought from another country and to goods bought from another EU country (intra-Community acquisitions).
Some countries also use a domestic reverse charge in sectors with fraud risk, such as mobile phones, computer chips and construction services in the UK.
SAP In SAP S/4HANA, a purchase tax code for reverse-charge services or intra-EU acquisitions posts the output VAT and the input VAT together, so the two tax lines cancel out.
Standard Audit File for Tax
SAF-T (Standard Audit File for Tax) is the OECD's standard XML file of a company's accounting and tax data, such as ledger entries, customers, suppliers, invoices, payments, inventory and fixed assets, sent to tax authorities.
The OECD published it in 2005 and version 2.0 in 2010, and each country adapts it.
In the EU, Portugal, Poland (JPK), Lithuania and Romania (D406) require regular SAF-T files, while countries such as Austria and Luxembourg ask for one in a tax audit.
SAP In SAP S/4HANA, country SAF-T files such as Poland's JPK and Romania's D406 are generated in SAP Document and Reporting Compliance (DRC).
Single Euro Payments Area
SEPA (Single Euro Payments Area) is the area of 41 European countries in which euro credit transfers, instant payments and direct debits follow the same European Payments Council schemes, so cross-border euro payments work like domestic ones.
It covers the 27 EU countries, Iceland, Liechtenstein, Norway, Switzerland, the UK and other European countries such as Monaco, Andorra and Serbia.
Under the Instant Payments Regulation, euro-area banks must send instant euro payments and check the payee's name (Verification of Payee) since 9 October 2025.
SAP SAP S/4HANA stores SEPA direct debit mandates (transactions FSEPA_M1 to FSEPA_M4) and writes the ISO 20022 payment files with the Payment Medium Workbench formats SEPA_CT and SEPA_DD.
Value Added Tax
VAT (Value Added Tax) is the consumption tax charged at every stage of the supply chain, in which businesses deduct the VAT paid on their purchases and the final consumer bears the full tax.
In the EU it follows the VAT Directive (2006/112/EC): each member state sets its own rates, with a standard rate of at least 15%, today from 17% in Luxembourg to 27% in Hungary.
The UK kept its own VAT after Brexit, with a 20% standard rate.
SAP Each country has its own tax calculation procedure, such as TAXD for Germany or TAXGB for the UK, with a tax code for every rate and case, maintained in transaction FTXP.
VAT identification number
A VAT ID (VAT identification number) is the number a tax authority gives a business registered for VAT, starting with the country code, which suppliers check in VIES before selling without VAT to another EU country.
Each EU country uses its own format, so a business trading in several countries may need a number in each.
VIES (VAT Information Exchange System) is the European Commission's search tool that queries the national VAT databases and answers valid or invalid.
SAP The VAT registration number is kept in field STCEG of the customer, supplier and company code data and printed on intra-EU invoices and the EC Sales List.
VAT in the Digital Age
ViDA (VAT in the Digital Age) is the EU legislative package, adopted on 11 March 2025, that modernises VAT with digital reporting based on e-invoices, new rules for platforms and a single VAT registration across the EU.
It entered into force on 14 April 2025, and since then member states may introduce mandatory domestic e-invoicing under specific conditions.
It consists of Directive (EU) 2025/516, Regulation (EU) 2025/517 and Implementing Regulation (EU) 2025/518.
Changing: Rolled out in stages: deemed-supplier rules for short-term accommodation and passenger transport platforms and the single VAT registration from 1 July 2028, digital reporting of B2B sales between EU countries from 1 July 2030, and national real-time reporting systems aligned with the EU model by 1 January 2035.
UK tax, reporting and payment terms, plus the IR35 rules that matter to contractors.
Bankers' Automated Clearing Services
Bacs (originally Bankers' Automated Clearing Services) is the UK interbank system for Bacs Direct Credit and Direct Debit payments, processed in a three-day cycle and used for payroll, supplier payment runs and collections.
The payment file goes in on day 1, is processed on day 2, and the money moves on day 3.
Bacs is owned and operated by Pay.UK, which also runs Faster Payments.
SAP In SAP S/4HANA, the payment run (F110) writes the Bacs file through the Payment Medium Workbench.
Clearing House Automated Payment System
CHAPS (Clearing House Automated Payment System) is the UK's same-day sterling payment system for high-value and time-critical payments, each settled individually and irrevocably in the Bank of England's Real-Time Gross Settlement service.
The Bank of England has run it since November 2017; it has no minimum or maximum amount and is usually open from 6am to 6pm on working days.
Businesses use it for large or urgent payments, and solicitors for property purchases.
Construction Industry Scheme
CIS (Construction Industry Scheme) is the HMRC scheme under which UK construction contractors deduct tax from their payments to subcontractors and pay it to HMRC as advance payments towards the subcontractors' tax and National Insurance.
The deduction is 20% for registered subcontractors, 30% for unregistered ones and 0% with gross payment status, applied to the invoice less VAT and materials.
Contractors verify each subcontractor with HMRC and send a monthly return (CIS300) by the 19th of the month after each tax month.
SAP SAP S/4HANA handles CIS with extended withholding tax, deducting the tax when the subcontractor is paid, and produces the monthly return in SAP Document and Reporting Compliance.
Companies House is the UK's registrar of companies, an executive agency of the Department for Business and Trade that incorporates and dissolves companies and keeps the free public register of their accounts, officers and owners.
Under the Economic Crime and Corporate Transparency Act 2023, directors and people with significant control (PSCs) must verify their identity, a legal requirement since 18 November 2025.
New directors verify before they are appointed; existing directors confirm it with their next confirmation statement, within a 12-month transition that ends in November 2026.
Faster Payments is the UK's real-time payment system, run by Pay.UK, that moves sterling between bank accounts within seconds, at any time of day, for individual payments of up to £1 million.
£1 million is the scheme limit: banks and payment firms set their own lower limits, depending on the channel and the type of account.
Businesses use it for urgent and one-off supplier payments.
His Majesty's Revenue and Customs
HMRC (His Majesty's Revenue and Customs) is the UK government department that collects taxes and duties, including Income Tax, Corporation Tax, VAT, National Insurance and customs duty, and pays benefits such as Child Benefit.
It is a non-ministerial department created in 2005 to replace the Inland Revenue and HM Customs and Excise.
It also runs Making Tax Digital, PAYE and the Construction Industry Scheme, and enforces the National Minimum Wage.
Off-payroll working rules
IR35, the off-payroll working rules, is the UK tax legislation that makes a contractor working through their own limited company pay tax and National Insurance like an employee when the engagement is, in substance, employment.
Since 6 April 2021 medium and large private and voluntary sector clients, like public bodies since April 2017, decide the status and give a Status Determination Statement; the fee-payer then deducts tax and National Insurance.
With a small private client, the contractor's own company still decides.
Making Tax Digital
MTD (Making Tax Digital) is HMRC's programme that requires businesses and individuals to keep digital records and send their VAT returns and tax updates to HMRC directly from compatible software.
MTD for VAT began in April 2019 and has covered every VAT-registered business since April 2022.
MTD for Income Tax started on 6 April 2026 for sole traders and landlords with qualifying income over £50,000, who send quarterly updates; companies are not in scope.
Changing: MTD for Income Tax is being extended to qualifying income over £30,000 from 6 April 2027 and over £20,000 from 6 April 2028.
SAP In SAP S/4HANA, the UK VAT return is generated in SAP Document and Reporting Compliance and submitted to HMRC's MTD API.
Pay As You Earn
PAYE (Pay As You Earn) is HMRC's system for collecting Income Tax and National Insurance from employees' pay, in which the employer deducts the amounts through payroll and pays them over to HMRC.
Under Real Time Information (RTI), the employer sends a Full Payment Submission (FPS) on or before each payday.
An Employer Payment Summary (EPS), due by the 19th of the following tax month, claims reductions such as statutory pay.
UK Generally Accepted Accounting Practice
UK GAAP (UK Generally Accepted Accounting Practice) is the set of accounting standards issued by the Financial Reporting Council for UK and Irish entities that do not report under IFRS, with FRS 102 as the main standard.
The FRS 102 periodic review amendments apply to accounting periods beginning on or after 1 January 2026: lessees bring most leases onto the balance sheet, and revenue follows a five-step model like IFRS 15.
Micro-entities can use FRS 105, and subsidiaries of IFRS groups FRS 101, the reduced disclosure framework.
A UK VAT number is the 9-digit VAT registration number that HMRC gives a VAT-registered business, written with the prefix GB, or XI for Northern Ireland businesses trading goods with the EU under the Windsor Framework.
The XI number is the same number with XI in place of GB, and it must be used on all documents with EU customers and suppliers.
Anyone can check a number with HMRC's free Check a UK VAT number service.
US tax, reporting and payment terms, plus the forms and contract types of US engagements.
Automated Clearing House
ACH (Automated Clearing House) is the US electronic network for batch credit and debit transfers between bank accounts, governed by Nacha and used for payroll, supplier payments, bill payments and direct debits.
The Federal Reserve and The Clearing House operate it; in 2025 it carried 35.2 billion payments worth $93 trillion.
Same Day ACH payments are limited to $1 million each, a limit that rises to $10 million on 17 September 2027.
SAP In SAP S/4HANA, the payment run (F110) writes the ACH file in Nacha format through the Payment Medium Workbench, with SEC codes such as CCD, CCD+ or CTX for payments to companies.
Corp-to-Corp
C2C (Corp-to-Corp) is a US contracting model in which a client or staffing agency pays a contractor's own corporation or LLC against invoices, instead of hiring the person as a W-2 employee or paying them on a 1099.
The contractor's company handles its own taxes, insurance and benefits; the model is common in IT and SAP consulting through staffing agencies.
The IRS common-law test, which looks at behavioral control, financial control and the type of relationship, still decides whether the worker is in fact an employee.
Electronic Export Information
EEI (Electronic Export Information) is the export data a US exporter or its agent files in the Automated Export System (AES) for most shipments over $2,500 per Schedule B number and for those needing an export license.
The US Principal Party in Interest (USPPI) or its authorized agent files it through ACE under the Foreign Trade Regulations (15 CFR Part 30), and AES returns an Internal Transaction Number (ITN) as proof of filing.
AES replaced the Automated Export Reporting Program (AERP) at the end of 1999, and mandatory AES filing from July 2008 ended the paper Shipper's Export Declaration (SED).
Employer Identification Number
An EIN (Employer Identification Number) is the nine-digit US federal tax ID, written XX-XXXXXXX, that the IRS assigns to businesses, partnerships, corporations, trusts, tax-exempt organizations and other entities.
Businesses with employees, and entities that file certain tax returns, need one; it is free and can be requested online at IRS.gov or with Form SS-4.
Individuals use their Social Security Number (SSN) instead, and either number is given to payers on Form W-9.
SAP In the SAP business partner, the EIN or the Social Security Number is stored as a US tax number and used for 1099 reporting.
Form 1099 is the family of US information returns that payers file with the IRS and send to payees, such as Form 1099-NEC for payments to independent contractors and Form 1099-MISC for rents, royalties and other income.
For payments made in 2026, the 1099-NEC and 1099-MISC threshold is $2,000 (it was $600), indexed for inflation from 2027; the 1099-NEC is due by 31 January.
Payment platforms file Form 1099-K only when a payee's payments exceed $20,000 and 200 transactions.
SAP In SAP S/4HANA, 1099 amounts come from the withholding tax data on supplier invoices and payments (usually extended withholding tax) and are reported with the generic withholding tax reporting program RFIDYYWT or the DRC report US_WHT_1099MISC.
Wage and Tax Statement
Form W-2 (Wage and Tax Statement) is the annual form a US employer gives each employee and files with the Social Security Administration, showing the year's wages and the income, Social Security and Medicare taxes withheld.
The forms for 2026 wages are due by 1 February 2027, because 31 January falls on a Sunday, and Form W-3 transmits them.
From 2026, new box 12 codes TP and TT report cash tips and qualified overtime pay.
Request for Taxpayer Identification Number and Certification
Form W-9 (Request for Taxpayer Identification Number and Certification) is the IRS form a US person gives a payer with its correct name and taxpayer ID, an SSN or EIN, for information returns such as Form 1099.
The payer keeps it and does not send it to the IRS; the current revision is dated March 2024, and foreign persons give a Form W-8 instead.
If the payee gives no taxpayer ID or a wrong one, the payer must apply 24% backup withholding.
SAP The taxpayer ID from the W-9 goes into the supplier's business partner tax numbers, as an EIN or a Social Security Number.
Internal Revenue Service
The IRS (Internal Revenue Service) is the US federal tax authority, a bureau of the Department of the Treasury, that collects federal income and employment taxes and receives tax returns and information returns such as Form 1099.
It does not run sales tax, which belongs to the states and local governments.
From the 2027 filing season (tax year 2026), IRIS is the only IRS system for filing information returns, as the old FIRE system closes.
Nexus is the connection between a business and a US state, such as a physical presence or enough sales into the state, that obliges the business to register for, collect and remit that state's sales tax.
Since South Dakota v. Wayfair (21 June 2018), states may tax remote sellers through economic nexus; South Dakota's law used more than $100,000 of sales or 200 transactions a year.
Each state sets its own thresholds.
Positive Pay is a US bank service against check fraud in which a company sends its bank the list of checks it has issued, and the bank pays only the presented checks that match the list.
Exceptions, such as a check that is not on the list or carries a different amount, are paid only if the company approves them.
SAP In SAP S/4HANA, the check extract for the bank comes from transaction FCHX (program RFCHKE00) or, in SAP S/4HANA Cloud, the Create Positive Pay Files app.
Sales and use tax is the US state and local tax on sales of goods and some services, collected by the seller as sales tax or, when the seller charges none, paid directly by the buyer as use tax.
There is no federal sales tax or VAT: 45 states and the District of Columbia levy a sales tax, and 38 states allow local sales taxes on top.
Alaska, Delaware, Montana, New Hampshire and Oregon have no statewide sales tax.
SAP In SAP S/4HANA, sales and use tax is calculated by jurisdiction code, with tax procedure TAXUSJ from rates kept in SAP or TAXUSX through an external tax engine such as Vertex; use tax codes self-assess the tax on purchases.
Sarbanes-Oxley Act
SOX (Sarbanes-Oxley Act of 2002) is the US federal law that sets financial reporting and internal control duties for companies listed in the US, including CEO and CFO certifications and an annual internal control report.
Section 302 requires the CEO and CFO to certify each quarterly and annual report; Section 404 requires management's assessment of internal control over financial reporting and, for larger companies, an auditor's attestation.
The Act also created the PCAOB to oversee the auditors of public companies.
A tax jurisdiction code is the code that identifies the taxing authorities of a location, such as the state, county and city, so that SAP or an external tax engine applies the right US sales and use tax rates.
SAP builds it from up to four parts (state, county, city and a local component), with the length of each part set for the tax procedure.
External tax engines such as Vertex supply their own codes, which SAP keeps in the same field.
SAP Field TXJCD is kept on the plant, customer, supplier, cost center and other account assignments; procedure TAXUSJ calculates from rates in SAP, and TAXUSX calls the external tax engine through RFC.
US Generally Accepted Accounting Principles
US GAAP (US Generally Accepted Accounting Principles) is the accounting framework for US companies, set by the Financial Accounting Standards Board (FASB) and organised by topic in its Accounting Standards Codification (ASC).
The Codification has been the single source of authoritative non-governmental US GAAP since 2009, in about 90 topics such as ASC 606 (revenue) and ASC 842 (leases).
US companies registered with the SEC report under it.
United States-Mexico-Canada Agreement
USMCA (United States-Mexico-Canada Agreement) is the free trade agreement between the three countries, in force since 1 July 2020, that replaced NAFTA and sets the rules, including rules of origin, for duty-free trade between them.
It is called CUSMA in Canada and T-MEC in Mexico.
Goods are duty-free only if they meet its rules of origin, such as the regional value content required for cars.
Changing: At the first joint review on 1 July 2026 the United States did not agree to renew the agreement in its current form; USMCA stays in force, is now reviewed every year and expires on 1 July 2036 unless the three countries confirm an extension.
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