What is eSocial and what is it for?

The system now incorporates information from your withholding tax return

THE Digital accounting system for tax, social security and labor obligationsbetter known as eSocialis a platform developed by the Brazilian government with the aim of simplifying and unifying the provision of worker-related information by employers.

Created by a 2014 decree during the former president’s administration Dilma Rousseffaims to standardize the transmission, validation, storage and distribution of this data, as well as create a kind of archive for storing information. It started working in 2015 with just one module and fully since 2018. As of 2021, a simplified version has been created. See who’s participating below.

• Employers, including domestic workers, companies and those equivalent in law;
• Special insurers, including in relation to workers who provide services to them;
• Legal entities governed by public law of all types of government (Union, States and Municipalities);
• Other legal entities and natural persons who pay or credit income with withholding of Income Tax Withheld at Source (IRRF)even in just one month of the calendar year.

What information is sent to eSocial?

There are at least 15 pieces of information transmitted by the platform. These include: employment relationships, pay slips, social security contributions, notice, notifications of accidents at work and information on the Guarantee Fund.

A standard of Federal revenue indicates that, this year, the Declaration of income tax withheld at source (Dirf) will be extinct. As a result, information previously submitted via the statement must now be submitted via the eSocial platform.

Fight against tax evasion

In addition to the computerization of information, eSocial has other objectives, such as the fight against tax evasion and the prevention of the activities of the so-called black economy. This name is given to activities related to the production of goods and services not reported to the federal government, which give rise to the circumvention of labor laws, tax evasion and evasion of social contributions.

Data Shadow Economy Index (IES) tabulated by Brazilian Institute of Competition Ethics (ETCO) and the FGV/IBRE indicate that the shadow economy has reached 17.8% of Gross Domestic Product (GDP).

Source: Terra

Rose

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