In order to determine which is most appropriate, it is necessary to assess the company's tax profile, taxes, contributions, and volumes involved. Generally speaking, businesses with large operations and a significant amount of credits choose to refund the amounts.

When the refund is chosen, there is no impediment to lately request the Federal Revenue Service to allocate the credits to be recovered to offset debts.

After the administrative process is completed, the amounts offset, refunded, or reimbursed are updated with interest based on the Selic rate.

Do the tax credits expire?

The taxpayer loses the right to recover credit after five years, counting from the date on which the credit was actually recorded.

Cross-offseting of credits: a path to be explored

Cross-offsetting is a more recent opportunity, available to taxpayers already included in eSocial and, therefore, valid as of the period after the company joined this system. In other words, in this case, offsetting is only possible if the company was already included in the eSocial.

This modality allows federal tax credits subject to return, reimbursement and offset to be used to offset social security contributions.

The advantage is that this kind of procedure is faster in authorizing credits to be offset, when compared to the application process through the Federal Revenue. Another point is that companies taxed by the Actual Profit are also able, through this new way, to offset prepayments of IRPJ and CSLL.

Tax intelligence to support your business growth

Taking advantage of credit recovery opportunities requires the support of a tax team specialized in this task. Consultatively and strategically, the team at Domingues e Pinho Contadores offers specific or continuous assistance to your business, from the identification of opportunities to the necessary administrative procedures.