Legislation No. 14,375: New Tax Settlement Guidelines – Tax Authorities

07 July 2022

Tauil & Chequer

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Published in the Official Gazette (“DOU”) on June 22,

2022, Law No. 14,375/2022 emanates from the enactment of

Provisional Measure No. 1,090/2021, which, among other changes,

amended Law No. 13,988/2020 to improve debts settlement

mechanisms.

Notably, Law No. 14,375/2022:

Applies to tax credits charged by the Brazilian Internal

Revenue Service (“Brazilian IRS”), regardless of whether

they are being discussed in court or not.
Enables the settlement of tax credits in tax administrative

litigation, which may be proposed by the Brazilian IRS,

individually or by adhesion, or at the initiative of the debtor.

(This had been restricted to credits charged by the Federal

Attorney General’s Office included as enrolled into federal

overdue tax liability.)
Allows the settlement to grant discounts on penalties, interest

and legal charges related to credits that are classified as

irrecoverable or difficult to recover and according to criteria

established by the competent authority.
Enables the use of Net Operating Losses (NOLs), in the

calculation of IRPJ and CSLL, up to a limit of 70% of the remaining

balance after any discounts.
Enables the use of certificates of government judgment debt or

credit rights with a final and unappealable judicial decision for

amortization of the principal amount, penalty and interest of the

tax debt.

Law No. 14,735/2022 also prohibits settlements that (i) apply a

reduction of more than 65% of the total value of the credits to be

settled (before it was 50%); (ii) grant a term for settlement of

credits exceeding 120 months (previously, it was 84 months); and

(iii) involve credits not registered as federal overdue tax

liabilities, except credits charged by the Federal Attorney

General’s Office or under discussion in tax administrative

litigation.

Finally, the new law establishes that discounts granted in the

event of a transaction will not be computed in the calculation

basis of: (i) IRPJ; (ii) CSLL; (iii) PIS and COFINS.

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Founded in 2001, Tauil & Chequer Advogados is a full

service law firm with approximately 90 lawyers and offices in Rio

de Janeiro, São Paulo and Vitória. T&C represents

local and international businesses on their domestic and

cross-border activities and offers clients the full range of legal

services including: corporate and M&A; debt and equity capital

markets; banking and finance; employment and benefits;

environmental; intellectual property; litigation and dispute

resolution; restructuring, bankruptcy and insolvency; tax; and real

estate. The firm has a particularly strong and longstanding

presence in the energy, oil and gas and infrastructure industries

as well as with pension and investment funds. In December 2009,

T&C entered into an agreement to operate in association with

Mayer Brown LLP and become “Tauil & Chequer Advogados in

association with Mayer Brown LLP.”

This article provides information and comments on legal

issues and developments of interest. The foregoing is not a

comprehensive treatment of the subject matter covered and is not

intended to provide legal advice. Readers should seek specific

legal advice before taking any action with respect to the matters

discussed herein.