Brazil Tax News: Laws, Provisional Measures, Normative Instructions, And Bill Of Law Approved At End Of December 2023

• Published date: 10 January 2024
• Subject Matter: Tax, Income Tax, Tax Authorities
• Law Firm: Tauil & Chequer
• Author: Ms Carolina Bottino, Bianca Rothschild, Diana Castro, Rachel Delvecchio, Carolina Ferraro, Raphael Furtado, Maria Carolina Grecco Bazzanelli, Niandra Soares and Isabella De Magalh'es Castro Pacífico

Several new rules were approved on December 28, 2023, all extremely relevant to tax law. Our tax team summarizes some of the more relevant new rules below.

1) Provisional Measure nº 1202, of December 28, 2023: Revokes tax benefits, changes the social security payroll tax, and limits the offset of credits related to lawsuits

The Provisional Measure ("PM") revokes the tax benefit of the Social Security Contribution on Gross Revenue ("CPRB") and determines that from April 1, 2024, payroll will be gradually retaxed through the application of reduced tax rates on the Employer Social Security Contribution ("CPP") until 2027 by companies whose CNAEs (activity codes) are included in the PM's Annexes I and IIPM.

The rates (ranging between 10% and 18.75%) will be applied to the insured's contribution salary up to the value of one minimum wage, and companies that apply the reduced rates must sign a term agreeing to maintain a number of employees equal to or greater than the number verified on January 1 of each calendar year.

The PM also revoked the Events Sector Emergency Resumption Program ("Perse") and established a monthly limitation for the offset of credit resulting from a final and unappealable court decision that exceeds the value of R$ 10 million. The limit will be established by an act of the Minister of State for Finance and cannot be less than 1/60 of the total value of the credit, demonstrated and updated on the date of remittance of the first declaration, which must be presented within 5 years from the date of the final and unappealable decision or approval of the withdrawal of the judicial title's execution.

2) Law No. 14,787/2023: Extends the REPORTO's regime until 2028

On December 29, 2023, Law No. 14,787 was published extending until December 31, 2028, the duration of the tax regime applicable to the modernization and expansion of the port infrastructure ("REPORTO").

3) Law No. 14,788/2023: Extends tax benefits for the ZFM, the Western Amazon, and the ZFM IT law until 2073

On December 29, 2023, Law No. 14,788 was published extending until January 1, 2073, the effectiveness of the tax benefits granted within the Manaus Free-Trade Zone ("ZFM") and the Western Amazon and of Law No. 8,387/1991, which grants tax incentives for computer goods and research and development programs developed in the ZFM ("ZFM IT Law").

Those tax benefits are provided for in (i) Decree-Law No. 288/1967, which regulates the tax incentives in the ZFM; (ii) Decree-Law No. 356/1968, which extends the ZFM tax incentives to the Western Amazon areas; (iii) Decree-Law No. 1,435/1975, which amended the aforementioned Decree-Laws; and (iv) the ZFM IT Law.

These legislative changes aim to address the legal uncertainty regarding...