Originally published in the July 28 edition of World Tax Daily (Copyrights Tax Analysts)
Brazil’s official gazette of July 23 published Joint Ordinance (Portaria Conjunta) 06/2009, establishing the procedures for individual and corporate taxpayers to apply for one of the most advantageous tax payment schedules in Brazil’s history.
Almost two months after Law 11,941/2009 created the unprecedented special tax payment schedule, the Federal Revenue Department (FRD) and the Federal Revenue Attorney General’s Office (Procuradoria Geral da Fazenda Nacional, or PGFN) have finally issued the regulations to make the payment schedule effective. Taxpayers may apply for the payment schedule from August 17 until November 30.
The payment schedule is divided into categories depending on the number of installments desired by the taxpayer. Different discounts apply for each category.
Each monthly installment cannot be smaller than BRL 2,000 for undue federal excise tax (IPI) debts, BRL 100 for other tax debts due by corporate taxpayers, and BRL 50 for individual tax debts. Interest calculated according to the SELIC interest rate (currently at 8.75 percent per year) will be added monthly over each installment, which will be due the last business day of each month. The first installment, however, must be paid in the month the taxpayer applies for the payment schedule.
Payment schedule applications or applications
for lump sum payments can only be filed online at the FRD or PGFN Web site, as appropriate, between August 17 and 8 p.m. November 30, 2009.
The application of the payment schedule is divided into two stages: application and consolidation. After the taxpayer has applied online for the payment schedule (stage 1), the FRD and the PGFN will issue a joint act establishing a deadline for applicant taxpayers to present the information necessary to consolidate all tax debts applied under the schedule (stage 2).
Until that consolidation is complete, the taxpayer must continue to pay the minimum monthly installment from the date of application. At the authorities’ request, the taxpayer must provide information on the eligible tax debts that will be included in the payment schedule, the number of desired installments, and the amounts of tax loss carryforwards that will be used to pay interest and penalties. Taxpayers that fail to provide the information requested for tax debt consolidation will be expelled from participating in the payment schedule.
Taxpayers’ applications will be effective only if they pay the first minimum installment (BRL 2,000, BRL 100, or BRL 50, as appropriate). The regulations also provide for the following:
- amortization of future installments under the payment schedule;
- causes for exclusion from the payment schedule and available appeals;
- payment of penalties and interest under the payment schedule with the use of income tax and social contribution on net income (CSL) tax loss carryforwards; and
- payment of a corporate taxpayer’s payment schedule, partially or totally, by its individual owners.
David Roberto R. Soares da Silva