NFS-e Service Invoices

This article describes how to set up and work with Brazilian NFS-e Service Invoices.

This functionality uses Electronic Reporting.

Prerequisites for generating NFS-e XML in Dynamics 365 Finance

Before you can generate an NFS-e (Nota Fiscal de Serviço Eletrônica - both for São Paulo and Federal) XML in Microsoft Dynamics 365 Finance, complete the key setup steps outlined in this article. Each of the following sections covers a specific prerequisite, with navigation paths and field names to help you configure the system correctly. These steps apply to both end users and IT admins responsible for the Brazilian service invoice process.

First, enable the Brazil reformed tax feature by following the steps in Set up Brazil reformed tax.

Identify the environment (testing vs. production)

To ensure the system knows whether to issue NFS-e in test mode or live mode, follow these steps:

1. Go to Organization administration > Organizations > Fiscal establishments > Fiscal establishments.
2. On the Fiscal establishment form, find the field Environment under the NFS-e FastTab.
3. Set NFS-e Environment to Testing (homologation) for test scenarios, or Production for real invoices.

Provide NBS and operation indicator codes

Provide the classification codes needed for NFS-e.

• NBS Codes: Nomenclatura Brasileira de Serviços codes classify the type of service provided (similar to a service item code). Ensure all required NBS codes are available in the system.
• Operation Indicator Codes: These codes indicate the nature of the service operation (for example, within city, outside city, or abroad). Make sure the valid operation indicator values are present.

Navigation to code tables: Open the forms to maintain these codes:

• NBS Codes: Inventory management > Setup > Fiscal information > NBS codes. Here you can Add or verify entries (each with a code and description).
• Operation Indicator Codes: Inventory management > Setup > Fiscal information > Operation indicator codes. Ensure the list of operation indicators and descriptions is up to date.

By populating these lookup tables, you can select the correct NBS and operation indicator values on transactions. Once you set up the code tables, use those codes in the following areas of Dynamics 365 Finance:

• Released Products: Go to Product information management > Products > Released products. Open each service product and on its details (under the Fiscal information FastTab), set the NBS Code field to the appropriate service code. (The field is visible for products of type "Service.") If available, also set the default Operation Indicator for the product.
• Sales Orders: For service sales, go to Accounts receivable > Orders > All sales orders and open the order. On each service line, on the Line details > Fiscal information tab, verify that NBS Code is completed (it should default from the product). Also select the Operation Indicator Code if it didn't default or if it needs to be changed for this order (for example, choose the code for "service out of municipality" if applicable).
• Free Text Invoices (FTI): Go to Accounts receivable > Invoices > All free text invoices. When creating a service invoice here, enter the NBS Code and Operation Indicator Code on the invoice line (these fields appear under the Fiscal information invoice line tab). Since FTIs aren't linked to a product's defaults, you must input these codes manually on each service line.
• Fiscal Documents: After posting a service invoice (from a sales order or FTI), go to Accounts receivable > Fiscal documents > All fiscal documents, and find the generated fiscal document record. On the fiscal document form, confirm that NBS Code and Operation Indicator Code fields are populated (in the grid of Fiscal document lines). These values flow from the transaction; ensure they're correct because the NFS-e XML uses them.

Setting the NBS and operation indicator codes in all these places guarantees the NFS-e XML includes the correct service classification and operation context. Missing or incorrect codes could lead to NFS-e generation errors.

Select a reason for not providing NIF

Explain why a Foreigner ID isn't present, if applicable. If the customer or service recipient doesn't have a Brazilian tax identification number (a scenario with foreign customers), specify a reason:

• Field: Reason for not providing NIF (NIF = Taxpayer Identification Number).
• Where to find it: On the Customers or Sales invoice header form, locate the Reason for not providing Foreign ID field (on a Fiscal information FastTab). This field is enabled when the customer's Foreign ID is blank.
• Action: Select the appropriate reason code from the dropdown (for example, "Foreign customer - No Foreigner ID").

By providing this information, the NFS-e XML includes a code explaining the absence of the tax ID. If you leave this field empty while the customer has no Foreigner ID, the NFS-e likely is rejected for missing required information.

Set domestic or non-domestic service location

Indicate if the service was provided outside Brazil, which affects tax applicability.

• Group of Fields: LOCATION OF SERVICE PROVISION.
• Location: You can find this option on the service invoice screen or the fiscal document. For example, on a sales order header, check the Fiscal information FastTab for a checkbox Foreign (by default = No), a field indicates if the service is provided abroad.
• Action:
  • If the service was performed outside Brazil, select this field (Yes/Checked). If the service was performed within Brazil (domestic), don't select it (No). The default is typically domestic, so only change it for export of services.
  • Domestic: specify the state where the service was performed.
  • Foreign: select the country/region where the service was provisioned.

This setting tells the system and the NFS-e XML whether ISS (municipal service tax) is applicable. A nondomestic (export) service might be exempt from ISS, so correctly flagging it ensures compliance.

Approximate tax percentage values (Federal NFS-e format)

Provide the required tax burden distribution percentages for the national (federal) NFS-e layout.

When you use the Federal standard NFS-e format, enter three percentage values that roughly break down the taxes for the service:

• Approximate % of federal taxes – estimated portion of total tax that's federal.
• Approximate % of state taxes – estimated portion of total tax that is state.
• Approximate % of municipal taxes – estimated portion of total tax that's municipal.

Where to enter: These fields appear on the Released product details form under the Fiscal information FastTab in the NFS-E TAX BURDEN group - for cities using the national layout. Action: Enter values in each field so that they don't exceed 100%. For example, if only municipal ISS applies, you might input 0%, 0%, and 100%. If federal PIS/COFINS taxes apply, you might split it (for example, X% federal, 0% state, Z% municipal). Make sure all three fields are filled (use 0% where a level doesn't apply). This information is included in the Federal NFS-e XML to meet the reporting requirements of the federal layout.

By completing the preceding configurations, your Dynamics 365 Finance environment meets the prerequisites for NFS-e generation. When the environment is correctly set, code tables are populated, fields are filled on products and documents, and required indicators are provided, you can proceed to generate NFS-e XML files that comply with the Brazilian electronic service invoice standards.

Find the Electronic Reporting configuration files

Find the e-invoicing configuration files for NFS-e (learn more in Set up Brazil reformed tax).

Download the following configuration files for NFS-e:

• Fiscal documents
• Fiscal documents mapping
• NFS-e Federal format
• NFS-e São Paulo format

Import the configuration files for e-invoicing

After you download the files, import the configuration files into the system.

To import e-invoicing configuration files, follow these steps:

1. Go to Workspaces > Electronic reporting.
2. Select the Reporting configurations tile.
3. On Configurations, select Exchange.
4. Select Load from XML file.
5. Select Browse to choose a file.
6. Upload all configuration files, and then go to step 7.

1. Go to Organization administration > Setup > Brazilian parameters.
2. Select the Electronic reporting tab.
3. Select NfeServices in the Type field, and select Fiscal documents mapping in the Model Mapping field.
4. Go to Organization administration > Organizations > Fiscal establishments > Fiscal document types.
5. Select NFS-e Federal or NFS-e São Paulo format in the Export format mapping field.

Generate NFS-e service electronic invoices

After you complete all the required configuration steps, you can generate electronic invoices for posted invoices by going to Accounts receivable > Periodic tasks > NFS-e export.

Additional resources

• Set up Brazil reformed tax
• Work with NFS-e service invoices for projects