On July 29, 2015, Ordinance PGFN/RFB No. 1.037/2015 was published to regulate the inclusion of debts in the Program to Reduce Tax Litigation ("PRORELIT") which was established by Provisional Measure No. 685/2015.
For the payment of debts with the utilization of credits derived from accumulated tax losses, a Requirement of Payment of Debts Submitted to Tax Litigation (called RQD) must be filed by September 30th, 2015 with the following documents:
- Payment documents evidencing the cash payment of at least 43% of the debts;
- Indication of the total amount of credits derived from accumulated taxes losses;
- In case of use of tax losses carried forward by the obligors or co-obligors, controlling, controlled or affiliated entities, copy of the Articles of Incorporation or Bylaws or any other document that confirms that the assigning entities have power to enter into the assignment;
- In case of waiver of tax lawsuits, the documents that evidence the filing of the request for termination of the cases with resolution on the merits pursuant to Section 269, V, of the Code of Civil Procedure, in the form of proof of filing the petition informing the waiver or a certificate issued by the Court informing the actual status of the lawsuits.
Previous accession to the Electronic Tax Domicile (DTE) is a requirement for the filing of an RQD.
Ordinance No. 1.037/2015 also establishes that the following rates will be used for the calculation of the credits derived from accumulated tax losses:
- 25% of the amount of the tax losses;
- 15% of the negative calculation basis of Social Contribution on Net profits (CSLL) in case of private insurance companies or savings institutions; and
- 9% of the negative calculation basis of CSLL in case of the other legal entities.
Finally, it is important to highlight that the use of these credits derived from accumulated tax losses for the settlement of tax debts will only be confirmed after the Federal Revenue Office ascertains their existence. If the amount indicated by the taxpayer is higher than the amount recognized by the Federal Revenue Office, a 30 day deadline will be provided, commencing from the notification of the refusal, for the taxpayer to make the cash payment of the remaining amount.
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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.