Federal Tax Debts Installment Program – The Adherence Term Is Reopened

With the conversion of provisional measure (MP) No. 627 into Law No. 12,973/2014, the adherence term of the federal installment payment programs is open again until July 31, 2014. The reopened programs are: (I)Federal Tax Recuperation Program (''Refis da Crise''), (II) program for installment debts related to the autarchies and public foundations, as well as the programs established by Law 12,865/2013, namely: (III) tax and CSL debits related to profits earned by related companied or subsidiaries abroad, (IV) PIS and COFINS payable by financial institutions and insurance firms; (V) debts of legal entities subject to litigation relating to the exclusion of the ICMS from the PIS/COFINS calculation basis;

The main benefits of each program, including the modifications to Law No. 12,973/2014, are described below:

(I) "Refis da Crise'' - Law No. 11.941/2009

Section No. 93 of Law No. 12,973 has reopened until 31 July, 2014 the deadline for adherence to the Federal Tax Recuperation Program, named ''Refis da Crise'', established by Law No. 11,491/2009.

Based on the same law, debts overdue until November 30, 2008, constituted or not, registered as collectible or not, within the scope of the Federal Revenue and the Office of Attorney-General of the National Treasury, may be paid using the following options:

In a lump sum: 100% reduction of late payment fine and ex-officio fine, 40% reduction of isolated fine, 45% reduction of default interest and 100% reduction of legal charges.

Within 30 months: 90% reduction of late payment fine and ex-officio fine, 35% reduction of isolated fine, 40% reduction of default interest and 100% reduction of legal charges.

Within 60 months: 80% reduction of late payment fine and ex-officio fine, 30% reduction of isolated fine, 35% reduction of default interest and 100% reduction of legal charges.

Within 120 months: 70% reduction of late payment fine and ex-officio fine, 25% reduction of isolated fine, 30% reduction of default interest and 100% reduction of legal charges

Within 180 months: 60% reduction of late payment fine and ex-officio fine, 20% reduction of isolated fine, 25% reduction of default interest and 100% of legal charges.

Besides that, Section 17, paragraph 7 of Law 12,865, included by Section 93 of Law 12.973, allows the conversion of amounts deposited into definitive payment, as long as there is an application of percentage reductions beforehand. Moreover, any remaining balance is going to be refunded to the taxpayer.

It should be noted that the amount related to the reduction provided in this program will not be computed in the calculation basis of income tax, contribution on profits (''CSLL''), Social Integration Program (''PIS'') or social insurance contributions...