New Income Tax Regulation are published

The new RIR is the result of a revision of the former regulation and the consolidation of changes in the applicable rules to tax in recent years.


New Income Tax Regulation are published

The Official Gazette, of the Nov-23-2018, brought the publication of a new version of the Income Tax Regulation (RIR), through Decree 9,580. The entire previous regulation (effective since the publication of Decree 3,000/1999) was revoked and rules updated were been presented on taxation, inspection, collection, and administration of Income Taxes, both for individuals (IRPF) and for legal entities (IRPJ).

The new RIR, composed of 1050 articles, is the result of a revision of the former regulation and the consolidation of changes in the applicable rules to tax in recent years.

Most of the changes incorporated to the new regulation are in the taxation of legal entities, mainly by the rules introduced by the Law 12.973/2014, converging Brazilian accounting standards with international standards. The rules dealing with taxation of financial products and transfer pricing and undercapitalization, which were absorbed are also relevant.

In addition to the above points, it is worth mentioning:

  • Article 249 - which deals with the discounts of paid interest or credited to the related party;
  • Article 939 - that speaks of the possibility of court-order debt in IR payment, with no need of a judicial process;
  • Article 946 - which deals with the prediction of decay counts, making the RIR in accordance with the National Tax Code (CTN) and jurisprudence;
  • Article from 1,048 to 1,050 - which deal with the accountant's responsibility.

It is noteworthy that the Decree 9,580 consolidated the legislation on Income Tax and Taxes of Any Nature published up to Dec-31-2016 and entered into force at its publication, leaving out tax laws of the last two years. Therefore, it is possible the publication of a new amendment in the near future, for its incorporation. Especially when the discussion of a tax reform in the new government is envisaged.

The role of RIR is to bring the necessary references to the Federal Constitution application and other rules that regulate IRPJ and IRPF, and can not bring any innovation on the requirement of these taxes. According to the Brazilian Federal Revenue, its "publication makes the tax assessment process clearer and simpler, which translates into greater legal certainty for the taxpayer, who will have easier access to the information necessary to the correct compliance with the obligations related to that tax.".

However, since it is always possible for some unconstitutionality and/or divergence of interpretation to occur on its content, it is necessary to wait to know how the new RIR will apply in the concrete case.

The new RIR deserves close attention by the Taxpayers, individuals or legal entities, especially since it is effective as of its publication, causes immediate repercussions on the principal and accessory obligations. Consult here its contents.

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