RFB - Rules for Special and Differential Economic and Tax Monitoring in 2020

On Dec-20-2019, the Federal Revenue Secretariat of Brazil (RFB) published the RFB Ordinances 2,135 and 2,136, established the criteria for indication of legal entities and individuals to be submitted to the differential and special economic tax monitoring in 2020.

The RFB, when making its analysis, uses all taxpayer information that is available, and in some cases requests additional clarification.

I - Legal Entities

Differentiated monitoring

The legal entity must be indicated for the differentiated monitoring to be carried out during the year 2020:

a) whose annual gross revenue reported in the Accounting-Tax Bookkeeping (ECF), of 2018, has exceeded BRL 250,000,000.00;

b) whose debts reported in the Federal Tax Credits and Credit Statements (DCTF), for the 2018, has exceeded BRL 30,000,000.00;

c) whose salary mass reported in the Payment Slips for Service Length and Social Security Guarantee Fund Information (GFIP), for the months of January to June of 2018, has exceeded BRL 35,000.000.00;

d) whose debts reported in the GFIP, for the months of January to June of 2018, has exceeded BRL 15,000,000.00; or

e) from total or partial spin-off, merger and merger, occurring up to two years prior to the monitoring object, whose success of which has been established in Article 7 of RFB Ordinance 641/2015.

Special monitoring

Special monitoring to be carried out in 2020 will affect legal entities whose:

a) annual gross revenue reported in the Accounting-Tax Bookkeeping (ECF) of 2018, has exceeded BRL 1,000,000,000.00;

b) whose debts reported in the Declarations of Federal Tax Credits and Credits Statements (DCTF), for 2018, has exceeded BRL 70,000,000.00;

c) salary mass informed in the Payment Slips for Service Length and Social Security Guarantee Fund Information (GFIP) for the months of January to June 2018, has exceeded BRL 50,000,000.00; or

d) debts reported in the GFIP, for the months of January to June 2018, have exceeded BRL 35,000,000.00.

Important: After the differentiated or special monitoring period, and in the absence of a new disciplining rule, the mentioned legal entity will remain in the same situation in the following years.

II - Individuals

Differentiated monitoring

Individuals should be appointed for differentiated monitoring for the year 2020:

a) whose income reported in the Annual Income Tax Return Adjustment Statement (DIRPF), related to the calendar year 2018, exceeds BRL 20,000,000.00;

b) whose assets and rights informed in the DIRPF, relative to 2018, has exceeded BRL 40,000,000.00; or

c) whose variable income transactions informed in Income Tax Withholding Tax Statements (DIRF), of 2018, has exceeded BRL 20,000,000.00.

Special monitoring

The special monitoring to be carried out in the calendar year 2020 for individuals is planned:

a) whose income reported in the DIRPF of 2018, has exceeded BRL 100,000,000.00;

b) whose assets and rights informed in the DIRPF of 2018, has exceeded BRL 200,000,000.00; or

c) whose variable income transactions reported in DIRF of 2018, has exceeded BRL 100,000,000.00.

Important: The taxpayer who is indicated for the accompaniments above will remain in this condition for the following years until a new normative act establishes new criteria for nomination.

Other parameters

Other criteria of fiscal interest may be used to indicate individuals for Special and Differential Economic and Tax Monitoring during the year 2020, pursuant to art. 8 of Ordinance RFB No. 641/2015, namely:

a) Total reported income;

b) Assets and rights;

c) Variable income transactions;

d) One -person investment funds; and

e) Participation in legal entities subject to differentiated monitoring.