The Provisional Executive Order (MP) No. 1202/2023 was published this Friday (29) and brought important tax changes. The rule has the same enforcement as a law and must be voted by Congress within 120 days, under penalty of effectiveness loss.
The first controversial point concerns the limitation of offsets of tax credits recognized in court. In these cases, the taxpayer files a lawsuit and obtains the right to offset tax unduly paid, creating a credit before the Tax Authorities.
According to the text of the MP, there will be a monthly limit for the offsetting of such tax credit, which will be defined in an act by the Ministry of Finance. The MP also establishes that this limit:
- Will be graded depending on the total amount of credit;
- Cannot be less than 1/60 (one sixtieth) of the total amount;
- Will not apply to tax credit worth less than BRL 10,000,000.00 (ten million reais).
It is possible to challenge the legal limitation in Court.
Another point of interest of the MP concerns the gradual extinction of tax benefits established by the “Perse”, which is a program created by the Federal Government to concede tax benefits to the events sector; which includes restaurants, hotels, bars and other establishments of the same kind.
The program provided for the reduction to zero of four federal taxes: IRPJ (Tax on Income), CSLL (Social Contribution on the Net Profit), and the Contributions to PIS and Cofins.
The previous law established that the benefit would last for five years as of 2021, but the text of the MP determines that the collection of taxes must be gradually resumed, so that CSLL, PIS and Cofins will be due again from April 2024, and the IRPJ should be reestablished from January 2025.
The revocation of benefits, however, can also be questioned before the Judiciary.
Finally, the MP also deals with the encumbrance of the payroll for certain sectors of the economy, as an alternative to the CPRB, which was also revoked by the same MP, as of April 1, 2024. This is a controversial topic, which may face resistance by the Congress.
KLA’s tax team is available to assess the company’s situation and the appropriate measures to protect its interests.
This informative was written by Henrique Lopes, Ariel Cunha and Matheus Barreto.
For additional information, contact our Tax team:
Henrique Lopes
Victor Polizelli
Álvaro Lucasechi
José Flávio Pacheco
Juliana Nunes
Luís Flávio Neto
Felipe Omori
