Federal Revenue Service allows for voluntary disclosure of tax issues with waiver of fines and interest

Taxpayers will be given the opportunity to settle their tax debts with special discounts and conditions

Through Law No. 14,740/2023, published on November 30, the Federal Revenue Service has established provisions on the new scheme for the voluntary disclosure of tax issues. This program provides taxpayers with an opportunity to settle their tax liabilities without incurring fines or interest.

Find out below the key highlights of the new act:

Implementation

The measure covers taxes under the jurisdiction of the Federal Revenue Service, including tax liabilities resulting from notices of violation or deficiency, and administrative orders that reject or only partially approve the offsetting of credits.

Payments through voluntary disclosure are applicable to:

• Federal tax liabilities not assessed up to November 30, 2023, (date of the law’s publication), even for debts that are currently undergoing tax audit.
• that may be incurred between November 30, 2023, and the end of the deadline for application.

Debts assessed under the Simplified Tax Scheme (Simples Nacional) are not subject to the voluntary disclosure program.

Benefits

Taxpayers who join the program will be given the opportunity to settle their debts with a 100% reduction in default interest by fulfilling the following conditions:

• At least a 50% cash payment of the debt; and
• Payment of the remaining amount in up to 48 consecutive monthly installments.

In this scenario, each monthly installment will include interest equivalent to the Selic rate, compounded monthly and calculated from the month following debt consolidation up to the month preceding the payment, with an additional 1% for the month in which the payment was made.

The law also provides for other benefits, such as the option to offset credits from tax losses and the CSLL negative calculation basis from a parent company or subsidiary, directly or indirectly, or from companies directly or indirectly controlled by the same legal entity. This possibility, however, is limited to 50% of the total amount of the debt under consideration.

Taxpayers may also use court-ordered payments of government debt (‘precatórios’) issued in their name or in the name of a third party to settle the portion that requires a cash payment.

Another important aspect is that the portion corresponding to the reduction in fines and interest resulting from voluntary disclosure will not be factored into the calculation of the IRPJ, CSLL, PIS/Pasep, and Cofins tax bases.

Applications

Taxpayers will be able to file an application to join the voluntary disclosure scheme within 90 days following the issue date of the Law’s regulation, which is yet to be passed.

Tax efficiency

Domingues e Pinho Contadores’ team of experts is always ready to provide guidance to companies on this and other tax opportunities. You can count on our support: dpc@dpc.com.br.