The Tax and Customs Law Department of Montgomery & Associados is analyzing the impact of the more than 1.000 (one thousand) articles contained in the new Decree.
Although the Federal Revenue Service argues that there was a mere consolidation of articles, preliminary studies point to changes in some provisions with which taxpayers were already familiar and, further, to the incorporation of provisions of Law No. 12.973/14, in relation to accounting methods and criteria for calculating tax, costs, operating expenses, charges, and other situations provided for in the then scattered legislation.
Among the positive changes observed: (i) the regulation is aligned with the provisions of the statute of limitations [1] established by the National Tax Code (“CTN”). As a result, the specific rule also provides for a variation in the initial term of the term for negligent defaults and those resulting from the taxpayer's willful misconduct, fraud, or simulation. The lack of such a provision in the previous Decree allowed the Treasury to calculate the term in a manner more beneficial to the State; therefore, this change should prevent the continuation of this trend unfavorable to taxpayers. There is also (ii) a clearer and more comprehensive provision regarding the “ex officio assessment” [2] (Article 900 et seq. of the current Decree), for example, with the inclusion of the possibility of assessment in the event that the taxpayer “VII – has submitted a declaration of offset considered undeclared and the debt has not been acknowledged.” Finally, another new development identified is (iii) the possibility for taxpayers to use court-ordered debts to pay Income Tax, which, previously, was only possible through judicial means.
[1] Thus understood as the State's right to establish the tax credit to be collected from the taxpayer.
[2] An official assessment is one in which the tax/administrative authority establishes the debt/imposes a penalty regardless of any action/declaration by the taxpayer. Taxes that may be subject to official assessment include: property tax (IPTU), vehicle tax (IPVA), fees, improvement contributions, corporate contributions, and contributions for public lighting services.
Given the recent change to the Income Tax Regulations and the impact this issue has on corporate activities, Montgomery & Associados is available to assist interested parties in interpreting the new legislation according to the specifics of each case presented.
