Tax transaction law brings together taxpayers and PGFN, but still has low adherence

Until October of last year, when the Provisional Measure of the Legal Taxpayer was issued, the only way for the taxpayer to obtain discounts on fines and interest on federal taxes was through special installment programs, known as Refis. As for the installment plan, there is an ordinary payment model up to 60 times, but without any discount by the Attorney General of the National Treasury.

MP 899/2019 was approved by Congress at the end of March and in April it was converted into 13.988 Law, known as the tax transaction law. It establishes permanent parameters for taxpayers to obtain discounts and installments to pay taxes that entered the Federal Active Debt category. The current stock of Federal Active Debt and FGTS is R $ 2,4 trillion, according to the most recent survey by the National Treasury Attorney General (PGFN). The value is within expectations, according to PGFN itself.

Discounts are up to 50% of the total amount, as long as it does not change the main amount, that is, the tax itself. The discharge period is up to 84 months. There are different rules for cooperative societies and Santas Casas de Misericórdia: with a reduction of up to 70% of the total amount and a term of up to 145 months. There is the possibility of total discount of fines, interest and legal charges, as long as the sum does not reach the established limits, of 50% and 70%, in relation to the amount.

“Law 13.988 brought an advantage for the taxpayer to negotiate his debts directly with the public entity, but the terms that are granted are short. So you will hardly have a businessman doing this, he will wait for a new Refis ”, says Luis Alexandre Oliveira Castelo, partner at Lopes & Castelo Advogados.

There are also complaints about the proposed discounts. "In my view, as the transaction discounts are not attractive, it is likely that we will have new bills for Refills, precisely to create greater benefits so that more people will join the program for the government to raise more money", evaluates Leonardo Andrade, partner in the tax area of ​​Andrade Maia Advogados.

Andrade also criticizes the fact that the law does not deal with precatories: "Another criticism I make is that the law does not allow the debtor taxpayer to use his precatory as a bargaining chip in the transaction with the government."

On the other hand, there is a consensus on the importance of the new law to establish a greater dialogue between taxpayers and the Attorney General of the National Treasury. “In 20 years of career, I can count on my fingers the times I managed to talk to a prosecutor. We were unable to find a communication channel with the Prosecutor's Office ”, recalls Tatiana Chiaradia, partner at Candido Martins Advogados.

“The Attorney General's Office, more than a decade ago, has set out to avoid unnecessary litigation that costs money. And he has dedicated himself to these tools that put tax authorities and taxpayers side by side in a round table, with no edges ”, says João Grognet, general coordinator of Credit Recovery Strategy of the Attorney General of the National Treasury. "I don't want the image that we are at a table where the discussion has an unsteady balance to remain."

One of the main novelties brought by the tax transaction law is that taxpayers are distinguished when negotiating payment. The debt to be negotiated is divided into four categories: A, B, C and D. “I can only give a discount for irrecoverable credit. The general rule is that recoverability is measured based on the debtor's ability to pay, ”explains João Grognet. "The payment capacity is estimated based on a mathematical equation based on the presumptive signs of economic, financial and patrimonial activity".

These rules regarding the calculation of payment capacity are present in articles 19 and 20 of the 9917 / 2020 concierge of the PGFN. Article 19 says: “the economic situation of debtors registered in the Union's active debt will be measured based on the verification of registration, patrimonial or economic-fiscal information provided by the debtor or by third parties to the Attorney General of the National Treasury or to the other organs of the Public administration".

For Edson Vismona, executive president of the Brazilian Institute of Ethics in Competition (ETCO), there is a need for high transparency in the definition of this classification. "A suggestion that may provide greater legal certainty is the creation of a channel so that possible mistakes in the framework can be reported", he says.

Debts of up to R $ 15 million can only be paid in installments. In this case, the taxpayer must accept all the conditions imposed in the notice that proposes the installment plan. The notices published so far can be viewed here. If the debt amount is greater than R $ 15 million, it is possible to carry out the individual transaction, with direct negotiation with PGFN. To know the debt situation of each taxpayer, it is necessary to access the Federal Revenue website, more specifically the Taxpayer Assistance Center, the e-CAC.

"The limit that they established, of R $ 15 million, is quite high so that taxpayers can make individual recovery requests, which are more interesting, with payment and discount bases being negotiated in a more personalized way", evaluates Fernanda Lains , partner of Bueno e Castro. “When we talk about R $ 15 million, it is a low value for taxpayers in the South, Southeast, who have a higher revenue generation. When we go to the North and Northeast regions, it is difficult to reach that limit ”.

There is one caveat that generates criticism: the fact that the taxpayer who opts for the adhesion transaction has to give up administrative or judicial litigation related to the negotiated tax. “The Law makes it difficult to maintain a judicial measure for discussing a procedural issue in cases where the merit thesis is the subject of a proposed transaction, says ETCO's Edson Vismona.

Once the individual transaction is established, negotiation is made between the taxpayer and the Attorney General's Office of the National Treasury. “An individual transaction requires numerous meetings and discussions around the text of a transaction term. It may involve local inspection at the debtor's establishment. It is not something to happen in wholesale, it is in retail ”, explains João Grognet, from PGFN. “The prosecutors are open, wanting to resolve. Years ago I did not see this availability at the Farm ”, points out Maurício Maioli, head partner in the tax area of ​​Feijó Lopes Advogados.

Until July, 204 thousand debts were transacted, from 55 thousand taxpayers, in the total amount of R $ 18,8 billion, according to the Attorney General of the National Treasury.

In June, the Ministry of Economy and PGFN published the 14.402 Ordinance, which establishes conditions for exceptional transactions because of the economic effects caused by the coronavirus. The membership period ends on December 29 and the transaction can be made on the portal Regularize.

Low adhesion with taxpayers waiting for new Refills

The first special installment program was created in 2000, with the establishment of the Tax Recovery Program (Refis). Since then, around 30 special installment programs have been designed, according to a survey by the Federal Revenue Service. There have been cases where taxpayers had access to a reduction of up to 100% in interest and fines.

Given this history, a large part of those who have tax debts with the Federal Government prefer to wait for a new installment program and, therefore, the demand for the tax transaction has been low. "Of my clients, few have joined because they are expecting to get bigger discounts with a new installment program", says Leonardo Andrade, partner in the tax area of ​​the Andrade Maia office. “Many clients came to us to do a simulation, but no one did it,” says Luis Alexandre Oliveira Castelo, partner at Lopes & Castelo Advogados.

“In the short term, after this transaction law, I don't see any possibility of Refills. There is no political climate for a new Refis, ”says Mauro Silva, president of the National Association of Tax Auditors of the Federal Revenue of Brazil (Unafisco). In May, Congressman Ricardo Guidi (PSD-SC) presented the 2735 / 2020 Bill, which proposes a new installment program due to the state of public calamity motivated by the pandemic.

The proposal provides for discounts of up to 90% for late fees and official fines, late fees and legal charges, but there is no prospect of advancing the text in Congress.

There are also those who consider the terms allowed by the law of the transaction to be too short. “In the transaction law, the maximum term that the Treasury can grant is 84 months, and if it is a Simples company, up to 100 months. The old refills had terms of 15 and even 20 years ”, highlights Maurício Maioli, from Feijó Lopes Advogados.

In addition, the law resolves a portion of corporate tax debts, specifically those with the PGFN. For the time being, debt negotiations with the IRS lack regulation.

“If I am a businessman, I keep thinking 'I have a debt with the Attorney's Office, the Federal Revenue and ICMS'. This law grants me the federal installment payment in the Attorney's Office of Finance, I will still be in default both for the debts I have with the Federal Revenue, as well as for the debts I have with the state ”, reports Castelo, from Lopes & Castelo. “What benefit would the entrepreneur have? None. Because what is needed to operate in the market is the certificate of tax compliance, CND, and with this transaction it is not possible to obtain it. There is no attraction that encourages adherence to the tax transaction today ”.

On the other hand, there are lawyers who understand that the law will require a change in taxpayer thinking. "The law must evolve together with good taxpayers, who will mature with these new rules of the game that the Union is bringing to the negotiation", evaluates Tatiana Chiaradia, partner at Candido Martins Advogados. "There will have to be a change in culture, mainly by taxpayers who are badly paying," says Fernanda Lains, partner at Bueno e Castro.

“People were very used to that old Refis model. And the transaction is not that, it involves another type of dialogue with the Attorney General. Together with the taxpayer, a judicial reorganization plan will be considered, but considering tax credits ”, he says. "It is a dialogue on new bases, it is a new culture".

Transaction in litigation

Another novelty of Law 13.988 / 2019 is in article 16, which says that the Ministry of Economy may propose to taxable persons transaction of customs or tax disputes arising from relevant and widespread legal controversy.

“We are waiting for the regulation of the transaction that involves dispute litigation. This is going to be the big news. Here it will involve companies that are discussing theses ”, explains Leonardo Varella Gianetti, lawyer for Rolim, Viotti and Leite Campos.

The rules for discount and negotiation will be the same, with discount limits and classification of each debt. In this case, PGFN will classify as irrecoverable or difficult to recover credits in which there is a greater chance that the taxpayer will have the thesis accepted by the judges.

“What we are predicting is that if the taxpayer has a lawsuit in progress and will be judged by the STF on appeal with general repercussion, why will he give it up? It will be a game theory decision and case by case ”, says Maurício Maioli, from Feijó Lopes Advogados. Gianetti makes a reservation: “The problem is knowing the time of the process and whether you will win. An objective criterion that we have is the jurisprudence. It takes a long time and it is very fearful to say that the thesis is a winner ”.

Penal fines from outside

The tax transaction law does not allow discounts on penal fines. ETCO's executive chairman, Edson Vismona, believes that the law should have made it clearer what would be "penalties of a criminal nature".

“The expression 'of a penal nature' raises doubts about the limits of the fence imposed by the device”, says Vismona. "It would be convenient to clarify that only the fines imposed in the context of criminal proceedings, according to Law No. 8.137, cannot be the object of a transaction, with no restriction in relation to the qualified fines imposed by tax authorities".

Tax attorney Leonardo Andrade is also critical of this point of the law. “This type of measure ignores the practice that there are many tax plans that had the improper application of the fine. In practice, the fines were applied to any case ”, he argues. "I have several clients who had a qualified fine applied in cases where there was no crime and they will not have any benefit because it was understood in the law that there can be no discount for qualified fines", he says. "The transaction had a much smaller scope than it should have."

Article published on 21/08/2020 on the Jota Portal, in the Jota Discute session, which has the support of ETCO.


Pandemic Explorers

We were hit hard. The health tragedy has demanded that public administrators, parliamentarians and companies have total concentration in combating the new virus and in the search for alternatives that besides saving lives - essential - can maintain the minimum conditions so that our country does not go bankrupt.

In addressing the consequences of the pandemic, several initiatives are being taken to reduce the effects on both public health and the economy.

At the National Congress, one of the proposals was presented to the Federal Chamber through Bill 1397/2020 which aims to institute emergency measures aimed at preventing the crisis and promoting, on a transitional basis, changes to the provisions of the law that deals with judicial, extrajudicial and bankruptcy recovery of the entrepreneur and the company.

Within its scope, among other measures, in accordance with article 11 of the text presented, the obligations provided for in the judicial or extrajudicial reorganization plans already approved, regardless of the resolution of the general meeting of creditors, will not be required from the debtor for a period of 120 ( one hundred and twenty). Article 12 of the said project allows the presentation of a new judicial or extrajudicial recovery plan, whether or not the original plan was ratified in court.

Later on (article 15), PL1397 / 20 allows the suspension of administrative acts of revocation, revocation, impediment of registration, registration, code or number of taxpayer, regardless of its type, mode or fiscal quality, subject to any entity of the federation that is under judicial discussion, within the scope of judicial reorganization.

The Brazilian Institute of Ethics in Competition (ETCO) understands that in this moment of pandemic, legislative initiatives that aim to rebalance the economic conditions of individuals and legal entities are welcome and necessary.

However, so that not only exceptional conditions are dealt with, but also that the general and comprehensive framework of legal certainty and competitive ethics is maintained, it is desirable that adjustments be made to the text of that bill.

With regard to the aforementioned articles, it should be noted that it is not by chance that there are general meetings of creditors and recovery plans approved in court. These are instruments that establish priorities and bring legal certainty to judicial and extrajudicial recovery processes. Otherwise, if these provisions were ignored, there would be a risk that the entire process would fall into an unknown legal limbo, leading to the growth of an already exorbitant judicial litigation.

The suspension of sanctions, however, does not meet the need to preserve economic activity, but rather allows companies that have been seeking to circumvent applicable legislation and that, for this reason, have suffered administrative sanctions, to be benefited, enabling and facilitating structured tax evasion and recurrent of those already known debtors who organize their business model to never pay taxes using it as a competitive advantage to increase their profits, gain market share and harm competitors.

In this sense, we suggest that articles 11 and 12 obey the principle of legal certainty, and that article 15 be deleted, not only because it is totally foreign to the merit expressed in PL 1397/20, but also to avoid distortions, benefiting even more. companies that violated the principles of competition.

Yes, we must support companies in difficulty. Now, stimulating those who have already had undue acts of evasion recognized, as a business model, no! Even more now in this moment of the pandemic in which we have seen the growth of opportunists on duty always trying to take advantage and take advantage of the ill-fated “jeitinho” to somehow benefit from any initiative or breach of the law, distorting good purposes of the legislator.


* Edson Vismona - Lawyer, president of the Brazilian Institute of Ethics in Competition - ETCO, was Secretary of Justice and Defense of Citizenship of the State of São Paulo (2000/2002)

Why does the Senate need to approve PLS 284/17?

Brazil needs to end the notorious industry of heavy duty debtors. The opportunity to accomplish this feat is now in the hands of the country's 81 senators, more precisely in the vote on Senate Bill 284/2017, which authorizes the creation of tougher rules against this perverse figure that corrodes the business environment and the tax collection of the Brazilian State.

Stubborn debtor is the name given to a defrauding type who sets up his company with the purpose of not paying tax. He uses this illicit advantage to practice prices below cost and gain market quickly. In addition, its strategy consists of using tricks to prolong the legal proceedings as much as possible, while diverting profits to other activities, keeping its business registered in the name of "oranges". When the State ultimately wins the case, it fails to collect the debt and the criminals start the same scheme again.

Regular debtors operate mainly in high-tax segments. In the fuel sector, its debts already exceed R $ 60 billion; in the case of tobacco, they exceed R $ 32 billion; in the case of beverages, R $ 4 billion. In these three areas alone, there are more than R $ 96 billion, about 10% of the annual savings expected with the pension reform.

Its unfair competition makes it impossible for companies that collect their taxes correctly and exclude investments. It was identified as one of the causes of the decision of large multinational groups in the fuel distribution sector to leave Brazil.

And why has it been so difficult to end this plague in the country? Basically, because the Brazilian legal system does not differentiate the debtor from other types of debtors and the malicious ones end up taking advantage of protection mechanisms that exist to guarantee the legitimate rights of debtors in good faith.

It is important to note that the problem here is not simply the duty imposed. Every company is subject to go through difficult times and run out of cash to pay taxes or other debts. Sometimes, it may happen that you fail to collect taxes properly, for a period, in order to catch up on debts in the future. But that understanding cannot be applied to the incumbent debtor.

Article 146-A of the Federal Constitution, approved by a constitutional amendment in 2003, authorized the State to create special taxation and inspection regimes for cases that cause competitive imbalances, making its adoption conditional on the approval of a specific complementary law by the Federal Senate. That is the purpose of PLS ​​284/2017, which has been in the House for two years, was approved by the Commissions on Economic Affairs and Transparency, Governance, Inspection and Control and Consumer Protection, and is ready to go to plenary.

The PLS makes an objective distinction between the three types of debtors: the eventual debtor, for whom nothing changes, the repeated debtor, who will also continue to have the current legal protections as long as he does not use the tax advantage to practice unfair competition, and the debtor stubborn, target of the law.

 “He is a criminal, and not a businessman, who organizes himself in order not to pay taxes and thereby obtain a competitive advantage, among others. To this end, it systematically violates the legal system, practicing numerous illicit acts, usually through the use of oranges, registration of addresses and false partners, invariably possessing insufficient assets to satisfy tax, labor obligations, etc. ”

The objective of PLS ​​284/2017 is to quickly stop the criminal action of incumbent debtors. The focus is on the defense of competitive ethics and legality, which are fundamental for business investment and economic development. “Once the contuma of the conduct is determined, it must be repressed, in a rigorous and exemplary manner, by means of legal sanctions that prevent the continuity of the agent's activities (interdiction of the establishment, revocation of registration in the taxpayer register), of preserving the Erárlo and the market, which has free competition as one of its fundamental principles, as an inseparable link of free initiative. ”

The project enumerates a series of measures that could be adopted specifically against regular debtors, such as the maintenance of uninterrupted inspection in the establishment; special control over tax collection, economic, equity and financial information; the compulsory installation of production, marketing and stock control equipment; among others.

The current text initially limits the scope of the law to the sectors of fuels, tobacco and beverages, which are the most affected by unfair competition from regular debtors, and has the support of the Brazilian Institute of Ethics in Competition (ETCO) and the main representative entities of these segments.

The topic is urgent. Brazil can no longer allow dishonest economic agents to continue destroying the business environment. Profit through illicit practice harms all Brazilians who depend on tax-financed public services. The solution lies with the Federal Senate.

Brazil loses R $ 193 billion to the illegal market

Survey by the National Forum Against Piracy and Illegality  shows that the loss advanced 32% in relation to the previous year


A survey carried out by the National Forum Against Piracy and Illegality (FNCP) shows that, in 2018, Brazil recorded losses of R $ 193 billion to the illegal market. This value is the sum of the losses recorded by 13 industrial sectors and the estimate of taxes that are no longer collected due to this crime.

The value is 32% higher than that registered by the FNCP in 2017 (R $ 146 billion) and almost double the number in 2014.

For Edson Vismona, president of ETCO and FNCP, this data shows that the country continues to lose the war to organized crime. “In 2018, the sum of official spending on health and education was R $ 208 billion, almost the same amount that Brazil lost due to the market driven by crime. Brazilian society can no longer continue to live with this reality ”says Vismona.

He recalls that today the trade in illegal goods is dominated by criminal gangs: “These groups use the profits from this activity to finance other crimes such as drug and arms trafficking. Consumers need to be aware that when they buy smuggled or counterfeit goods, they are handing over money to factions that increase violence for cities across the country. ”

The heavy and chaotic Brazilian tax burden has a direct impact on the final price of products and encourages the demand for lower prices, even if it represents an ethical inconsistency: on the one hand the consumer calls for the fight against crime and corruption, on the other it finances these actions that criticizes so much.

Cigarettes, the main sector affected by smuggling, demonstrate this reality. Last year, 54% of all packs sold in the country were illegal, an increase of six percentage points over the previous year. Of this total, 49% were smuggled from Paraguay and 5% were produced by companies that operate irregularly in the country. The main stimulus for this growth is the huge tax difference between the two countries. Brazil charges an average of 71% of cigarette taxes, reaching up to 90% in some states, while in Paraguay the rates are just 18%, the lowest in Latin America. As a result, in 2018 the difference in price charged between Brazilian and Paraguayan cigarettes reached 128%.

The sectors analyzed by the FNCP are: clothing; cigarettes; glasses; Cable TV; personal hygiene, perfumery and cosmetics; fuels; audiovisual (films); pesticides; imported perfumes; sports equipment; toys; medicines and software.

Losses to the country - The amount of losses recorded in 2018 could be turned into benefits for the population and for the development of the Brazilian economy. With R $ 193 billion it would be possible to invest in the construction of: 1.520 hospitals, 30 thousand Emergency Care Units (UPAs), 96 thousand day care centers, 2 million popular houses, 7,7 thousand kilometers of duplicated highways, 6.655 CEU standard schools, 413 airport terminals and 128 port terminals.

Edson Vismona points out that, despite the negative numbers, the country is in a positive moment for the reduction of the illegal market. “The recently elected presidents in Brazil and Paraguay have already made public statements that they will face smuggling and organized crime on the borders, and that they want to work together to solve the problem. We believe that this is the right path, which will bring gains for all of South America. On the other hand, in cities, such as São Paulo, a center for the distribution of fake products throughout Brazil, actions to combat illegal trade intensify ”, He says.

New Piracy Counselors set agenda for the year

The National Council for Combating Piracy and Intellectual Property Offenses (CNCP) met on Wednesday (27) to resume the work of the collegiate. 


The National Council for Combating Piracy and Intellectual Property Offenses (CNCP) met on Wednesday (27) to resume the work of the collegiate. Secretary Luciano Timm, who is in charge of the National Consumer Secretariat of the Ministry of Justice and Public Security (Senacon), sworn in the new advisory and collaborating members of the Council for the 2019/2021 management, including government agencies and the private sector. , who directly suffer the impacts of piracy, smuggling and embezzlement.

On the occasion, a brief presentation was made of the work already carried out by the Special Commissions in progress, the issues involving technical contributions and suggestions from several members of the Council. There were still the approval of the Creation of the Special Cigarette Commission, which will have the rapporteurship divided among the Members: National Forum against Piracy and Illegality, represented by Edson Vismona, who is president of the Brazilian Institute of Ethical Competition - ETCO, and Newton Vieira, from Brand Protection Group. The Special Commissions in progress are: E-Commerce, Online Advertising and Payment Methods and Hardware.

The meeting allowed the exchange and exhibition of successful experiences, as well as the forwarding of concrete and strategic actions to combat piracy in the country and the discussion on the sale of products originating from crime on digital platforms. Edson Vismona presented the panorama of piracy in Brazil and the efforts aligned with the Ministry of Foreign Affairs for actions within the scope of Mercosur and OECD.

CNCP's entry into the Collaborators Panel of the Secretariat of Integrated Operations of the Ministry of Justice and Public Security - SEOPI was announced, with the objective of assisting the approach with Public Security agents in the formatting of operations to combat piracy and crimes correlates. The Collaborative Panel also joins the Special Advisory on Legislative Affairs of the Ministry of Justice and Public Security - AEAL, aiming to assist in the follow-up of legislative proposals related to the themes of combating piracy and crimes against intellectual property.

In addition to the debates, the Council endorsed the dates for the 2019 regular meetings and some points for changing its bylaws. Another topic addressed was the calendar of the National Piracy Combat Award, scheduled for the second half of this year.

About the Council

CNCP is a collegiate and advisory body, part of the basic structure of the Ministry of Justice and Public Security. Its purpose is to prepare guidelines for the formulation and proposition of the National Plan to Combat Piracy, and the tax evasion resulting from it, in addition to crimes against intellectual property. It is composed of representatives from different public bodies and sectors of civil society.

Source: Ministry of Justice