In January 2003, article 10, Law no. 10,666/2003 had enacted the Prevention Accident Factor – "FAP" (a multiplication factor of SAT) to permit the evaluation of the risk degree of each legal entity and to establish a specific SAT tax rate for each company (New SAT Rate = SAT x FAP).
In view of that, on February, 2007, the Decree no. 6,042/2007 regulated the possibility to specifically evaluate the risk degree of each legal entity by means of the application of the so called Accident Prevention Factor – "FAP" (a multiplication factor that varies from 0.5 to 2 points).
The FAP for each company shall be determined according to the number of labor accidents and illnesses that have generated payment of benefits by the Social Security. The FAP calculation is mainly based on the frequency, level of importance and cost of the labor illnesses and labor accidents of each company.
Thus, until the end of 2007, the social security authorities would have to determine the FAP of each company, based, mainly, on the frequency, level of importance, and cost of the labor illnesses and labor accidents of each company.
In this context, the companies that present low incidence of labor accidents (consequently, low FAP) may reduce their SAT tax rate (being it 1%, 2% or 3%) down to 50% (fifty per cent), according to the security measures adopted by the company. On the other hand, the legal entities that present high incidence of labor accidents (consequently, high FAP), may suffer the increase of their SAT tax rate, up to 100% (one hundred per cent).
Because of the great amount of information and inconsistencies on the FAP system, the Social Security Agency (INSS) postponed the presentation of the specific FAP applicable to each legal entity.
After many changes in the legislation, on September 10th, 2009 the Decree no. 6,957/2009 was enacted, stating that the FAP application will be effective as from January 2010.
On September 25th, 2009, Joint Ordinance MPS/MF no. 254/2009 was also enacted to set forth rules regarding the application of the FAP and especially to present the list of average rates of frequency, level of importance and cost of the labor illnesses and labor accident related to all events regarding several economic groups in years 2007 and 2008.
Accordingly, on September 30th, 2009 the Social Security website finally provided the specific FAP for each legal entity.
From this date, each legal entity is required to verify its specific FAP trough the following link: www2.dataprev.gov.br/pls/fap/pkg_cfc_acesso.pr_acessa_empresa - by means of the information of the company's taxpayer's registration number before the Federal Revenue (CNPJ) and of the pin code provided.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
