Voluntary disclosure promotes tax compliance

Program launched by the Federal Revenue Service allows taxpayers to settle federal tax liabilities, with full waiver of fines and interest

By Cristiano Gonçalves

The Federal Revenue Service of Brazil has recently launched a self-disclosure program for federal tax liabilities. The measure presents a favorable opportunity for taxpayers to settle their tax debts with the agency under special conditions.

Set out by Law No. 14,740/2023 and regulated by RFB Normative Ruling No. 2,168/2023, the effort benefits individuals and companies with the possibility of disclosing their tax debts and making full or installment payments pertaining to previously unpaid liabilities in exchange for a complete waiver of fines and interest.

The rules even allow taxes to be paid after an audit procedure has taken place. Below is an overview of the details regarding the program. Check it out:

Elligibility for the self-disclosure program

It should be noted that debts under the Simplified Tax Scheme (Simples Nacional) are not covered by the program. However, companies under this scheme that have undisclosed debts pertaining to other regimes are eligible to apply.

Deadline for application

The period for joining the program is from January 2 to April 1, 2024. Applicants must submit a request by filing a digital process on the Virtual Service Center Portal (e-CAC).

Benefits granted

The program allows for the settlement of debts with the waiver of late payment and ex-officio fines, along with a 100% reduction in interest. However, applicants are required to make a down payment of at least 50% of the consolidated debt. The remaining amount can be paid in up to 48 successive monthly installments.

Keep in mind that, during the analysis of the application, the enforceability of the corresponding tax liabilities will be suspended. This allows the taxpayer to request a certificate of suspended debt as proof of their good standing with the tax authorities.

In addition, if the Federal Revenue Service approves an installment plan, not only will the collection of the debts be suspended, but also the repercussions of the debtor's registration in the Federal Government's Registry of Unsettled Credits (CADIN) will be temporarily halted.

Another point worth mentioning is that, for legal entities, half of the cash debt may be settled using credits from IRPJ tax loss carryforwards and CSLL negative taxable base.

The rule also provides for the use of credits from court-issued registered warrants for the payment of government debts, although this possibility is still pending regulation by the Federal Attorney General's Office.

Tax-strategic approach

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