The Federal Revenue publishes a standard on the conditions for deductibility of losses at receiving credits from legal entities

On Mar-23-2018, the Federal Revenue Brazil (RFB) published an interpretation involving the deductibility of losses at receiving credits from the legal entities activities.

03/04/2018

HIGHLIGHTS

The Federal Revenue publishes a standard on the conditions for deductibility of losses at receiving credits from legal entities


On Mar-23-2018, the Federal Revenue Brazil (RFB) published an interpretation involving the deductibility of losses at receiving credits from the legal entities activities.

The interpretation, in the RFB Interpretative Declaratory Act 2/2018 (see here), is that, for determination of Real Profit and the calculation basis for Social Contribution (CSLL) purposes, credits from the legal entities activities can only be deducted as expenses since the requirements for deduction of losses on credits receiving have been fulfilled, as provided for in Article 9, of Law 9430/1996, even though they are overdue for more than five years and have not settled by the debtor.

That is, the rule clarifies that all conditions set forth in the Law must be observed or losses for non credit receiving may not be deducted.

Important: In addition to the foregoing, the conclusions on the contrary in previously issued consultation solutions or divergence solutions are modified, regardless the consultants’ communication.

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