Tax transaction by membership allows you to renegotiate tax debts

This application, however, had never been regulated by tax legislation, so that the tax transaction proved to be a true utopia for those taxpayers who had difficulties in maintaining a fiscal regularity situation and who, therefore, were waiting for new special installments. (like Refis) so that they could stay up to date with their tax obligations.

This scenario finally changed in October 2019, when Provisional Measure No. 899/2019, known as the Legal Taxpayer MP, was signed, which for the first time addressed the issue, allowing the application of this legal instrument as a less onerous alternative to the resolution of disputes between the tax authorities and taxpayers.

Given this scenario, the Attorney General's Office of the National Treasury (PGFN) recently made available the Notice of Transaction Agreement by Adhesion No. 01, through which taxpayers will be able to renegotiate their tax debts registered in active debt of the Union. The agreement is applicable, including , to debts in the judicial discussion phase, tax enforcement, or that have already been the subject of previous installments that have been terminated.

In other words, the recently published notice effectively marks the first possibility for taxpayers to transact with the tax authorities, as a way of extinguishing tax credits.

Special conditions for payment were granted to debtors with debts registered in active debt in the total amount of up to R$ 15 million reais, considering the nature of the debt — social security or non-social security — and the type of transaction, among the four provided for by the notice:

●      Type of old debts in collection: debts registered as active debt for more than 15 years and without a note of guarantee or suspension of enforceability;

●      Type of old debts suspended: debts registered as active debt suspended by court decision for more than 10 years;

●      Type of legal entity debtors written off/extinct/unsuitable: debts held by legal entity debtors whose registration status with the CNPJ is: written off due to unfitness; written off due to non-existence of fact; downloaded due to persistent omission; written off due to bankruptcy; written off due to the end of the judicial liquidation; written off at the end of the settlement; unfit due to unknown location; unfit due to non-existence of fact; unfit due to omission and non-location; unfit due to persistent omission; unfit for omission of declarations; suspended due to non-existence of fact;

●      Deceased individual debtor type: debts held by individual debtors with an indication of death in the CPF.

Thus, to adhere to one of the tax transaction types, taxpayers must pay a minimum deposit of 5% (or 10%, in the old suspended debts type) of the total value of the debts to be transacted, without any discount, This entry can be paid in five monthly installments.

The remaining balance may be subject to reductions of up to 50%, if payment is made in cash, with installments being possible in up to 84 months — the greater the number of installments, the lower the reduction percentage. Specifically regarding the debts of individuals and micro or small companies, reductions can be up to 70% for cash payments, with installments being possible in up to 100 months. The installment period is limited to 60 months in the case of social security debts.

Taxpayers interested in adhering to the transaction modalities stipulated by the notice must pay attention to the deadline for adhesion, which ends on February 28, 2020.

What can be seen, therefore, is that, although of great relevance for the development of relations between tax authorities and taxpayers, taxpayers need to be cautious when formalizing a transaction, especially in the case of an adhesion transaction type.

Nevertheless, the publication of the Adhesion Transaction Agreement notice no. 01 is an important milestone for the development of Tax Law, in the search for a fair and transparent relationship between taxpayers and the tax authorities, by regulating the tax transaction instrument.