Originally published in the April 8 edition of World Tax Daily (Copyrights Tax Analysts)
Brazil’s Chamber of Deputies on March 24 approved Provisional Measure 449 with several changes, including a new tax payment schedule that allows both individual and corporate taxpayers to pay unpaid tax debts over 15 years. The new payment schedule would include tax debts owed by November 30, 2008.
Provisional Measure 449 created tax waivers and installment payment schedules for small tax debts. The measure had been under fierce lobby from the private sector since its December 4, 2008, introduction to include a new, general tax payment schedule for unpaid federal tax debts.
Unpaid tax debts would be consolidated and subject to interest equal to the highest between the long-term interest rate (currently at 6.25 percent per year) or 60 percent of the SELIC interest rate (currently 11.25 percent per year). SELIC is currently the interest rate applicable to any unpaid tax debts.
Regarding accrued penalties and interest before consolidation, the new payment schedule provides for generous discounts of 20 percent to 100 percent, depending on specific conditions. According to the wording of the new payment schedule, no installment may be less than BRL 50 for individuals or BRL 100 for corporate taxpayers.
Provisional Measure 449 is under Senate review and debate and should be approved within the next few weeks. If converted into law, the new payment schedule would be the fourth schedule since 2000 and the third under President Luiz Inácio Lula da Silva’s administration.
David Roberto R. Soares da Silva