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On 12 January 2023, the Brazilian Government announced new tax recovery measures that may potentially significantly impact taxpayers.
The following is a summary of the key measures:
| Before | After | ||
| ICMS included in the PIS/COFINS credits basis (on inputs purchases) |
Allowed on the amounts of purchases | Not allowed (new rules will be in force on 1 May 2023) | |
| Voluntary disclosure (payment of debts without penalties) | Not allowed if an audit was initiated | Allowed even in the case of ongoing audits to the extent the audit was initiated by 13 January 2023. Debts must be paid by 30 April 2023 | |
| Federal Administrative Procedure | Casting vote | Law 13,988/2020 ruled that tied discussions should be resolved in favor of taxpayers | Tied discussions will be resolved by the casting vote, in charge of a representative of Tax Authorities |
Appeal to the administrative Court (composed by representatives of both tax authorities and taxpayers) |
Except for a few cases, discussions could be addressed to the administrative Court analysis (as opposed of being analyzed solely by tax authorities) | Only discussions involving amounts higher than 1,000 minimum salaries (approx. R$1,300 million) will be analyzed by the administrative Court | |
| Tax settlement | Settlement of tax debts is a new process in Brazil and the legislation is being improved over the years, specially post COVID-19 pandemic. The settlement of tax debts is possible to the extent certain conditions are met. | Different levels of discounts were granted to foster the settlement, to the extent certain requirements are met. Adherence to the settlement must be made by 31 March 2023 | |
For additional information with respect to this Alert, please contact the following:
EY Assessoria Empresarial Ltda, São Paulo
Waine Peron
Sarah Barbassa
Bruna Felizardo
Virginia Pillekamp
Ernst & Young LLP (United States), Latin American Business Center, New York
Lucas Moreno
Pablo Wejcman
Aline Milla
Victor Asfora
Enrique Perez Grovas
Ernst & Young Tax Co., Latin American Business Center, Japan & Asia Pacific
Raul Moreno, Tokyo
- Luis Coronado, Singapore
For a full listing of contacts and email addresses, please click on the Tax News Update: Global Edition (GTNU) version of this Alert.
