National Treasury of Brazil furthers its social and environmental commitment in tax settlement agreements

The Attorney General's Office of the National Treasury of Brazil (PGFN) has issued Ordinance No. 1,241/2023, making important changes to the rules governing settlement agreements for the collection of tax liabilities owed to the Federal Government and to the Severance Indemnity Fund for Employees (FGTS). The regulation upholds sustainable development and emphasizes the adoption of ESG principles (environmental, social and corporate governance), in line with the country’s commitment to UN’s 2030 Agenda.

Tax settlement agreements allow taxpayers to restore their tax situation with the National Treasury to good standing under special conditions by means of reciprocal concessions. This effort is aimed at stimulating economic activity in Brazil and ensuring employment security.

In the past, agreements of this nature did not take ESG aspects into account. However, as of the issuance of the new ordinance, all tax settlement agreements must consider sustainable development goals wherever possible, and individuals who enter into those arrangements are required to demonstrate the presence of such goals.