The period for submitting the ECD 2022 (Digital Accounting Bookkeeping) to the Federal Revenue Service is already underway and the deadline is now set on June 30, after the extension.
With the deadline extension, taxpayers have more time to be prepared to comply with the obligation. Learn more below about the ECD and see if your company is required to submit it.
The ECD is a federal ancillary obligation that has replaced physical document delivery with digital or electronic files. The following accounting ledgers must be validated and authenticated through the bookkeeping process:
- Accounting journal and its accompanying documents, if any;
- General Ledger and its accompanying documents, if any;
- Daily trial balances, balance sheets and accounting entries for accompanying documents.
Submissions are mandatory depending on the tax treatment given to a legal entity. Thus, the following persons are required to submit the ECD 2022:
The ECD submission is optional for other legal entities.
Yes, legal entities may be subject to a fine amounting to:
- 0.5% of the company’s gross income for the year, if the entity fails to meet the criteria prescribed for ECD submission;
- 5% of the value of the corresponding transaction, limited to 1% of the company’s gross income for the year, if its information has been omitted or incorrectly provided; and
- 0.02% per day of delay, calculated over up to 1% of the company’s gross income for the year, if the entity does not meet the deadline for submission.
Data inserted into the ECD serve as a basis for the preparation of the Tax Accounting Bookkeeping (ECF). Thus, the submission of the ECD 2022 is a preliminary step towards the preparation of an ECF in compliance with the regulations.
In 2022, there is a new rule in place, allowing for the cross-checking of ECD data with the CFC database.
Thus, a message may be issued identifying accountants who have signed the ledgers as "unfit" according to their CFC records. The warnings will be advisory only and will not prevent the submission of the ECD.
Version 9.0.1 of the ECD software, released this April, introduced the following changes:
DPC assists its clients in preparing and submitting documents pertaining to accounting and tax obligations. In addition, our staff assists companies by providing reviews and reports on time for delivery, adding to their compliance with the laws in effect. You can count on our support: email@example.com
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