On May 13, 2024, the Attorney General's Office of the National Treasury published PGDAU Public Notice No. 2/2024, which creates a new tax settlement method for credits enrolled into federal overdue tax liability, with or without suspended enforceability, whose value is equal to or less than BRL 45 million (45 million reais).
The adhesion period is already in place and will end on August 30, 2024. The adhesion is made exclusively through the REGULARIZE portal of the Brazilian Federal Revenue Service.
The discounts may reach up to 100% of interest, fines, and legal charges, and there is the possibility of paying in installments over up to 133 months, depending on the taxpayer's ability to pay and the credit's degree of recoverability.
For adhesion purposes, certain requirements must be observed, such as:
(i) prior ongoing installment payments must be cancelled;
(ii) the adhesion must cover all credits enrolled into federal overdue tax liability that are not guaranteed, paid in installments, or suspended by court decision. A partial adhesion is prohibited and the combination of one or more available modalities are permitted;
(iii) a request must be submitted to withdraw ongoing lawsuits;
(iv) jointly liable parties must be indicated if the adherent is part of an economic group.
The negotiations can also involve the use of federal writs of payment to amortize or settle the negotiated debit balance. However, there is no provision for the use of credits arising from tax losses or negative CSLL calculation bases.
Below we highlight the benefits provided for each of the new types of transactions instituted: (i) adhesion of credits enrolled into federal overdue tax liability; (ii) small value litigation related to credits enrolled into federal overdue tax liability; and (iii) registrations guaranteed by insurance or letter of guarantee.
(i) Transaction by adhesion of credits enrolled into federal overdue tax liability
Applicable to Federal Government tax liabilities that can be negotiated under the following terms:
- Discount: up to 100% of the value of interest, fines, and the legal charges, subject to a limit of up to 65% of the total value of each registration subject to negotiation, in accordance with the taxpayer's ability to pay.
- Down payment: 6% of the consolidated value of the debt, paid in up to 6 successive monthly installments.
- Remaining: Up to 114 monthly and successive installments.
In case of taxpayers whose debts are considered difficult to recover or irrecoverable by the Attorney General's Office of the National Treasury, after the down payment has been paid under the terms above, the remaining balance may be divided into up to 108 monthly installments.
In the case of social security debts, the maximum number of installments is 60 months.
Special conditions may apply in the case of transactions involving individuals, micro-enterprises, small businesses, Holy Houses of Mercy, cooperative societies and other civil society organizations referred to in Law No. 13.019/2014, or educational institutions.
(ii) Transaction of small value litigation
Applicable to Federal Government tax liabilities with a consolidated value of up to 60 times the current minimum wage and which have been registered for more than 1 year and whose taxpayer is a natural person, individual micro-entrepreneur, micro-enterprise, or small business.
Down payment: 5% of the consolidated value of the registrations traded, without discount, paid in up to 5 successive monthly installments.
Discount: between 30% and 50% on the remaining balance, which is payable in a minimum of 7 monthly installments and a maximum of 55 monthly installments, depending on the applicable discount.
(iii) Transaction of registrations guaranteed by guarantee insurance or letter of guarantee
Applicable to taxpayers who have an unfavorable final decision and whose liabilities are guaranteed by insurance or a letter of guarantee before the loss occurs or the guarantee is enforced.
Payment, without discounts, will be by way of a down payment of 30%, 40% or 50% and in installments of 6, 8 or 12 months, respectively.
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This article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.