The Brazilian tax administration publishes new regulations on the settlement of taxes | Insights and Events

On August 12, 2022, IRS Ordinance No. 208/2022 (IRS Ordinance) was published in the Brazilian Official Gazette, regulating the settlement of tax credits administered by the Brazilian Tax Administration (IRS).

Taxpayers will be able to settle tax credits in the context of tax administrative litigation as follows: (I) settlement by adhering to the IRS proposal; (ii) an individual settlement proposed by RFB; (iii) an individual settlement proposed by the taxpayer.

The IRS Ordinance considers that the tax administrative litigation is initiated during the filing of requests and appeals in tax matters, as indicated in the decrees n. authorizes settlement when there is an ongoing dispute. defence, appeal, petition or administrative complaint.

The IRS Ordinance contains provisions similar to PGFN Ordinance No. 6,757/2022, which also governs Law No. 13,988/2020 as amended by Law No. 14,375/2022.

Although Section 33 of the IRS Order makes it clear that the use of tax loss credits and a negative payroll tax balance on profits is at the sole discretion of the IRS, the IRS does not does not impose as many limitations on the use of these credits as the PGFN did. . The IRS allows the use of these credits in any method of settlement and does not limit their use to uncollectible or difficult to collect debts or any other special situation.

In addition, the IRS Order:
(I) Permits the use of taxpayer credits awarded against the federal government—acknowledged in the final trial award or in their own or third-party federal writs of payment—for the purpose of amortizing or liquidating the processed debit balance;
(ii) Has general provisions concerning the individual settlement of taxpayers who have debts that are the subject of a tax administrative dispute in an amount greater than BRL 10 million;
(iii) Provides the possibility of an individual simplified settlement for a debt subject to a tax administrative dispute and an amount between 1 million and 10 million BRL.

The provisions of the IRS Order will take effect on September 1, 2022, except for the Individual Simplified Settlement Guidelines, which will take effect later on January 1, 2023.

For more information regarding this legal update, please contact our tax team.