CFOP: Understand what it is, its importance, and how it works

The CFOP is the acronym for Fiscal Code of Operations and Renderings and is part of the daily life of many companies. Therefore, it is important to know what it represents and how it works.

Well, let's go! The CFOP defines the payment of taxes on goods received and transported from your company. It is a code formed by a four-digit sequence that identifies the nature of the circulation of products and the provision of services throughout Brazil, and even abroad.

Thus, through it, it is possible to classify goods and identify service providers responsible for their interstate and intrastate transportation. This is why the government verifies the circulation through the CFOP table. In other words, it says whether the fiscal operation will have to collect taxes or not.

Therefore, it is essential that all professionals who are responsible for the invoices of a company have knowledge about what the CFOP is and always have at hand the codes of the table most used by it.

Read on and learn more about CFOP!

What is CFOP?

The CFOP is a four-digit numeric key used to classify goods and identify the service providers responsible for transporting them in the inter-municipal and interstate spheres. It is through this code that the federal government inspects imports and exports and defines whether or not the fiscal operation should collect Income Tax.

For this reason, it must be duly registered in all the company's fiscal documents: invoices and fiscal books, magnetic files, and others that are required by law.

What is the CFOP table?

Basically it is a list of codes published by the government for use by taxpayers on their tax documents. There are many codes, and they are divided between incoming and outgoing, in six major groups, which are identified by the first digit.

CFOP input

Starting digit 1: input and/or purchases of services from the state, for when the sender and receiver are in the same state;

Starting digit 2: input and/or purchases of services from other states, for when there are differences of states between those who send and those who receive the products or services;

Starting digit 3: input and/or purchases of services from abroad, used when the company hires services or purchases products from other countries.

CFOP outbound

Starting digit 5: outputs or services rendered to the state - follows the same logic as digit 1, but the issuer of the bill is the one who sends the product or provides the service to someone within the same state;

Starting digit 6: exits or services rendered to other states - in a similar situation to digit 2, but again, the person who issues the document is providing services or sending products to someone in another state;

Initial digit 7: Exports or services rendered abroad when the company that issues the bill sends its product or service abroad.

Attention: When a company issues an invoice, it can contain several CFOP, as long as the operations are of the same nature.

Why is the CFOP important?

Even though the main function of the CFOP is to make the buying and selling process transparent to the IRS, it is also a great business management tool.

This is because, by identifying the goods by means of numerical codes and, obligatorily, registering them in its fiscal books, the company can have greater control of stock products and number of orders. In this way, losses by excess or shortage are avoided.

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