Brazil: Block K adds inventory, supply chain and production reports

Starting February 1, 2016, companies will have to submit monthly inventory and production reports. Those that have yet to start preparing for these new requirements are behind, as these mandates go beyond the need to produce new reports and require fundamental changes to the ways companies track their inventory and manufacturing.

Companies affected by these mandates include any industries where the composition of a product and the raw materials or components used within it are subject to specific industrial reports – whether that product is produced in house or by a third-party. Under Block K, companies have to provide detailed information regarding manufacturing, production and inventory control for each one of their business locations, following the specific rules for each region’s government administration – meaning that specific requirements may vary from facility to facility.

Using this information, Brazil’s tax authority will be able to track the full product cycle in companies – from material orders (through SPED) to production (through Block K) to sales (through Electronic Nota Fiscal). Inconsistencies will result in fines, penalties and even business shut downs as e-invoicing and other operational services may be suspended.