Originally published in the December 2, 2009 edition of World Tax Daily (Copyrights Tax Analysts)
A new law that establishes the requirements for nonprofit organizations to be exempt from social security taxes in Brazil was published in the official gazette on November 30.
Law No. 12,101/2009 applies to nonprofit entities that provide services in the areas of public health, education, and social assistance. It regulates the procedures and requirements for the certification and cancellation of certification of those entities for eligibility for the social security tax exemptions.
The law covers the gap left by Provisional Measure 446 of November 11, 2008, which regulated the same issues, although with stricter rules in some cases, and which was rejected by Congress in February 2009.
The law covers areas, such as:
- the type of eligible entities and minimum requirements for eligibility;
- the granting and revocation of tax exemptions;
- the administrative appeal procedure in case of denial or cancellation of a certification or its renewal;
- communication of fraud to the Federal Attorney General; and
- procedures for the application, renewal, and recognition of tax exemptions.
David Roberto R. Soares da Silva