Media: Migalhas Website - Section: News - June 19, 2009

By: Fábio Alexandre Lunardini*

The federal law no. 11.941, dated May 27, 2009 (click here) - a result of the conversion of MP 449/08 (click here) into law - has brought significant changes in the tax legislation and in the MP that gave rise to it; amongst which we point out:

1) Offsetting Federal Taxes

The ban - previously existing in MP 449/08 - was not confirmed in connection with the offsetting of already existing tax credits with the amounts of IRPJ and CSLL due on a monthly basis, either by estimate or with based on the in suspension/reduction of balance sheets. The same thing occurred with tax debts under R$ 500.00 and with the “carnê-leão” payable by natural persons on income received from other natural persons abroad.

2) Spread payment of debts managed by the Brazilian Internal Revenue and tax debts with the PGFN

The debts due until November 30, 2008 may be paid in installments, whether or not formalized, registered or not as executable tax debts or under execution, object of previous spread payments, not fully paid, even if cancelled due to lack of payment.

Natural Persons:  debts due by the legal entity may be paid upon being vested in its capacity as taxpayer in responsible for the debt (partner, managers, officers) or make the payment without the need of consent.

Legal Entity/Natural Person: debts may be paid in up to 180 months (the previous term was 60 months) managed by RFB, PGFN and social security charges and contributions applicable over payroll, and over the employee himself (employee’s withholdings), as well as the remaining balance of the REFIS, PAES and PAEX.

The taxpayer shall indicate the debts - that may be paid in installments - including the balance of the progress payment granted pursuant to MP 449, in the following manner:

 Yet, the REFIS, PAES and PAEX debts may be paid in installments in the following manner:

The amounts payable in the spread payment as fines, delinquent interests or ex-officio, and interests in arrears, may be paid with the use of tax losses and negative CSLL calculation basis, upon applying the brackets corresponding to such taxes.

The option for cash payment or payment in installments should be made until the last business day of the sixth month following the publication of law no. 11.941/09.

3) The adjustment in payable taxes, relative to the quarters of calendar year 2008′, for legal entities taxed based on quarter’s profits (real or presumed) was postponed to June 30^th 2009 (and no longer January 31^st 2009, as initially provided by MP 449/08);

4) The MP extinguished the event of being served process electronically upon the time the debtor checks-in the e-mail address assigned to him by the tax administration;

5) The MP dropped the idea of having judges of the Tax Appeals Administrative Council - CARF, decide on low complexity matters (a concept which is quite subjective) and on recurring matters (a trend confirmed in the wording given by the MP, in article 26-A of the Decree, which provided on the possibility of issuing reiterated and uniform stare decisis which was equally not confirmed in the conversion into law);

6) The 11% value for social security contributions, to be included in the service invoices involving labor, may be offset by any establishment of the granting company (and not just by the establishment providing the services), upon the payment of entitlements towards Social Security payable over its employees’ payroll;

7) Despite any refusal to offer or misappropriation of any document or information, or any deficient submission thereof, upon inspecting the social security contributions, the National Treasury continues being in charge of providing solid grounds for the levied taxes. The MP 449 had established that the burden of contrary proof relied upon the company or upon the welfare beneficiary;

8) Social security contributions due based on an award or settlement in a labor claim should be paid within the same credit period found in the award calculation or upon the ratified settlement. In the latter case, the payment shall be made in as many payments as set forth in the settlement, on the same dates that such are required and on a pro-rata basis to each of them. In the MP, such term would go until the 10^th day of the month following the award or settlement date, regardless of the term for the payment of the amounts;

9) The calculation basis in the event of settlement in labor claims is thus changed, said basis becoming the amount to be effectively paid to the prevailing party due to the settlement reached (and no longer the full amount owed in the award);

10) Ban on the extending of indirect compensation concept - which was intended by the government - to certain granted advantages, mainly, to individuals who provide services through legal entities that they have set up, aiming at lower tax impacts;

11) The MP authorized the offsetting of credits declared unconstitutional in a final and unappealable decision in favor of the taxpayer, or object of approved binding decision of the Supreme Federal Court (STF);

12) The MP reestablished the possibility of spreading the payment of debts challenged in court, with the withdrawing of eventually deposited amounts, that MP 449 intended to limit;

Moreover, the provisions included in the MP were vetoed, or introduced in the processing thereof in Congress, to wit:

- The forecast that the assessment adjustments to fair value of assets, or to current value of assets and liabilities, had no tax effects;

- The possibility of appeals to the Superior Chamber of Tax Appeals, in the case of non-unanimous decisions contrary to the law or the evidence of proof, or allowing voluntary appeals. The justification is that CSRF should have “as single focus the unification of interpretation of tax norms”, and it should only be in charge of deciding on the appeals in the event of tax decision with diverging interpretations within the CARF;

- The possibility of transferring PIS and non-cumulative COFINS credits, accrued quarterly, to controlling, controlled or associated legal entities; and

- The use of the on-line attachment against micro, small and mid-size companies only as a last resort, after the exhausting all other means for execution. It was further alleged the need for compliance with regards to article 5, LXXVIII of the Federal Constitution of 88 (right to process celerity).