What is Block K: Everything you need to know about this tax obligation

Block K is one of the most important parts of the Tax Bookkeeping ICMS and IPI electronic filing, known as EFD ICMS/IPI or SPED Fiscal.

Through this system, industrial companies and certain equivalent establishments report detailed data to the tax authorities regarding inventory, raw material consumption, production, manufacturing performed by third parties, internal transfers, and losses incurred during the production process.

By 2026, this requirement will apply to various industrial sectors. However, the type of information required may vary depending on the economic activity, revenue, state legislation, and whether the company falls under the simplified or full reporting framework.

Therefore, complying with Block K means more than just submitting a file. It is necessary to ensure that the tax, accounting, production, and inventory data are consistent with one another.

What is Block K?

Block K is the section of the EFD ICMS/IPI form dedicated to Production and Inventory Control.

In a digital environment, it replaces information traditionally recorded in the Production and Inventory Control Log, Form 3. The elimination of this physical log, however, is contingent upon the complete submission of the information, as established by the SINIEF Amendment 25/2016.

In practice, Block K allows the tax administration to monitor:

• quantity of goods in stock;

• raw materials used in manufacturing;

• finished goods and work in progress;

• production orders;

• internal transfers;

• manufacturing performed by third parties;

• inventory adjustments;

• disassembly, reprocessing, and other production-related operations;

• normal losses that occur during production.

This information helps the tax authorities compare the company's reported purchases, production, consumption of inputs, inventory, and sales.

What is Block K used for?

The main objective is to increase control over industrial operations and reduce tax discrepancies related to production and inventory.

With this information, the tax authorities can identify situations such as:

• consumption of raw materials inconsistent with the reported production;

• negative or nonexistent inventory;

 

• sales volume exceeding the quantity produced or purchased;

• material losses exceeding the recorded standard;

• differences between inventory, tax documents, and production activity;

• outsourcing of manufacturing without the corresponding documentation;

• duplicate entries or incompatible units of measure.

This makes Block K a responsibility that involves not only the tax department but also the production, inventory, purchasing, cost, technology, and accounting departments.

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Who is required to submit Form K?

Whether this is mandatory must be determined in accordance with the laws of the state where the business is located. The Federal Revenue Service itself clarifies that compliance with the EFD ICMS/IPI system depends on state regulations.

In general, Block K can achieve:

• industrial facilities;

• companies treated as industrial enterprises;

• certain wholesalers;

• establishments classified under CNAE codes that are subject to the statutory timeline;

• companies subject to special regulations;

• participants in certain customs procedures, such as Recof Sped.

Revenue, primary and secondary business activities, the type of operation, and any specific rules established by each state’s Department of Finance must also be taken into account.

Therefore, it is not safe to determine the obligation based solely on the company’s primary CNAE code. The analysis must take into account the activities actually carried out by the establishment.

Schedule for the Complete Bookkeeping of Block K

The national timeline was implemented gradually. The sectors covered by full record-keeping include:

The schedule was updated by the SINIEF Amendment 25/2022, which also began to allow, in certain situations, for compliance with the obligation through simplified bookkeeping.

In 2026, therefore, the groups scheduled through 2025 are already on track. Even so, it is essential to consult state regulations before determining which records must be submitted.

What activities are listed on the schedule?

The divisions and groups mentioned cover activities such as:

• food manufacturing;

• beverage manufacturing;

• manufacturing of tobacco products;

• textile manufacturing;

• manufacturing of clothing and accessories;

• manufacturing of wood, paper, and pulp products;

• printing and reproduction of recordings;

• production of coke and petroleum products;

• manufacturing of chemicals and pharmaceuticals;

• rubber and plastic manufacturing;

• manufacturing of nonmetallic mineral products;

• metallurgy and the manufacture of metal products;

• manufacturing of computer and electronic equipment;

• manufacturing of machinery, equipment, and vehicles;

• furniture manufacturing;

• maintenance, repair, and installation of machinery and equipment.

The correct classification depends on the CNAE code and the operations carried out by each establishment.

Simplified and Complete Form K: What's the Difference?

Since 2023, certain taxpayers have been able to fulfill their obligations through simplified bookkeeping. However, “simplified” does not mean a lack of oversight.

Simplified Bookkeeping

The simplified layout reduces the number of records sent periodically to the tax authorities. It typically focuses on information related to book inventory and certain transactions.

Even when using this method, the company must maintain the necessary data internally to ensure complete bookkeeping.

The law allows for this information to be requested during inspections or under special regulations.

Rodrigo Ribeiro 

Complete bookkeeping

In its comprehensive accounting records, the company provides more detailed information on its production structure and operations, including:

• items produced;

• inputs consumed;

• production orders;

• work in progress;

• in-house manufacturing;

• manufacturing by third parties;

• production losses;

• corrections and internal transfers.

Record K010 identifies, in the digital file, the type of layout used by the taxpayer.

The layout valid for 2026 is set forth in the EFD ICMS/IPI technical documentation published by SPED. The updated list of forms, technical notes, and files can be found on the EFD ICMS/IPI Manuals.

Rodrigo Ribeiro 

Key Records from Block K

The records submitted depend on the company's classification and the type of bookkeeping required.

The use of each record must follow the Practical Guide to the EFD ICMS/IPI, updated in 2026.

What information needs to be organized?

Before generating the file, the company needs to organize data that is typically scattered across different systems and departments.

The key information includes:

Product Registration

Products, raw materials, packaging, byproducts, and intermediate materials must have standardized codes and consistent descriptions.

Product Specifications

The bill of materials, also known as the materials list or product structure, must specify which materials are used and in what quantities.

Production Orders

Orders must show what was produced, when production took place, what materials were used, and what quantities resulted from the process.

Inventory

Physical inventory counts must be reconciled with the system, the accounting records, tax documents, and the information reported in the K200 Register.

Production losses

Breakage, evaporation, waste, scrap, and other losses must be technically justifiable and consistent with the production process.

Third-Party Manufacturing

Shipments, returns, consumed inputs, and resulting products must be linked to the corresponding tax documents.

What are the main errors in Block K?

Among the most common problems are:

• negative inventory;

• duplicate codes for the same product;

• incorrect unit of measurement;

• outdated technical specifications;

• consumption of inputs that is incompatible with production;

• production without a properly recorded order;

• losses without technical justification;

• differences between physical inventory and system inventory;

• internal transfers without record;

• outsourcing of manufacturing without tax reconciliation;

• discrepancies between records 0200, 0210, K200, K230, and K235;

• corrections made without supporting documentation.

These errors may result in the file being rejected, the need for corrections, tax inquiries, and assessments in accordance with each state’s laws.

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Does Block K reveal the company's trade secret?

This is a common concern, especially since complete bookkeeping records may contain information about raw materials and product composition.

The data submitted through SPED is protected by tax confidentiality. In addition, the adoption of the simplified format was intended to reduce the frequency with which detailed information is disclosed.

However, the option to use the simplified model does not eliminate the obligation to maintain complete accounting records internally. The tax authorities may request this information during audits.

Therefore, the company must implement appropriate access controls, security policies, and procedures to protect its business information.

What happens if the company doesn't deliver correctly?

The absence of Block K, the omission of information, or the submission of incorrect data may result in consequences such as:

• tax notices;

• the need to amend the ICMS/IPI EFD;

• fines provided for under state law;

• inquiries regarding inventory and tax credits;

• inventory or production arbitration;

• oversight of industrial operations;

• difficulties with special and customs procedures;

• increased risk of being fined.

There is no single national fine that applies to all situations. Penalties, deadlines for correction, and procedures vary depending on the state and the nature of the violation.

How can you prepare your company for Block K?

The adjustment must begin before the SPED Fiscal filing.

1. Confirm the classification

Check the CNAE code, revenue, business activity, state laws, and any special regulations applicable to the establishment.

2. Identify the required layout

Confirm whether the company is required to file the simplified or complete Block K.

3. Review the records

Standardize codes, descriptions, units of measure, classifications, and item types.

4. Update the technical data sheets

The quantities of inputs and loss rates should reflect the actual production process.

5. Integrate the departments

Production, inventory, purchasing, tax, accounting, costs, and technology must all operate using the same information base.

6. Perform periodic reconciliations

Compare physical inventory, the management system, invoices, production orders, and accounting data.

7. Validate before transmission

Run tests and cross-checks before generating the final EFD ICMS/IPI file.

How can CLM Controller help?

Preparing Block K requires knowledge of tax, accounting, and operational matters. An error in the source data can carry over into multiple periods and lead to discrepancies that are difficult to correct.

CLM Controller helps industrial companies with:

• Analysis of compliance requirements based on the type of activity and state laws;

• review of product and input records;

• review of technical data sheets;

• reconciliation of production, inventory, invoices, and accounting;

• validation of SPED Fiscal records;

• identification of inconsistencies before transmission;

• guidance on the simplified or full layout;

• review of internal processes and integration across departments;

• assistance with updating and correcting information.

With proper controls, the company reduces tax risks and also improves its management of inventory, costs, and production.

Conclusion

By 2026, Block K will already be part of the tax routine for various industrial sectors. The challenge lies not only in complying with the requirement, but also in ensuring that all information accurately reflects the company’s operations.

Outdated records, incorrect technical specifications, and inventory discrepancies can be easily identified through electronic data cross-checking.

If your company needs to verify compliance requirements, review records, or set up the necessary controls for Block K, contact the experts at CLM Controller.

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