On May 17, 2024, the Office of the Attorney-General of the National Treasury ("PGFN") and the Brazilian Internal Revenue Service ("Brazilian IRS") jointly published the Public Notice of Settlement for Adhesion No. 6/2024 ("Public Notice").
The Public Notice provides for the tax settlement of debts related to discussions at the judicial and administrative levels regarding: the levy of withholding income tax (WHT); Contribution for Intervention in the Economic Domain ("CIDE"); Social Integration Program ("PIS"); and Social Contribution on Revenues ("COFINS") on remittances abroad resulting from the contractual split into charter of vessels or platforms and services agreements, pursuant to Law No. 9,481/1997, including related penalties and qualified penalties.
The referred tax settlement may only be reached if there is evidence of the enrollment of the debt in federal overdue tax liabilities, lawsuits, motions to stay execution, a complaint, or an administrative appeal pending final decision at the time of publication of the Public Notice. All processes related to the matter must be included.
In the event the dispute refers to more than one legal basis, the taxpayer can segregate these issues to include only the debts covered by the Public Notice in the tax settlement.
The application to the tax settlement started on May 17 and will end on July 31, 2024, at 7 p.m., and implies:
- irrevocable and irreversible confession to the debts included in the tax settlement;
- withdrawal of administrative defenses or appeals filed by the taxpayer regarding the included debts, and waiver of the legal grounds in which the administrative defense or appeal are based;
- withdrawal of judicial deposits related to the tax settlement by the federal government (if any); and
- compliance by the taxpayer regarding future or pending taxable events, in relation to the levy of WHT on the portion of the charter agreements that exceeds the percentages established in §§2, 9 and 11 of Article 1 of Law No. 9,481/1997.
The Public Notice provides that, after the automatic conversion of deposits, the discount (which may be between 35% to 65%, depending on the chosen modality) is applied to the total amount, and the IRPJ tax loss credit and negative CSLL calculation basis are used, with the remaining amount to be paid:
- With a minimum down payment of 30% and the remaining balance in 6 monthly installments: 65% discount;
- With a minimum down payment of 10% and the remaining balance in 24 monthly installments: 35% discount.
It is possible to use IRPJ tax loss credits and the negative CSLL calculation basis held by the taxpayer, controlling or controlled legal entity, directly or indirectly, or by companies controlled directly or indirectly by the same legal entity, as long as such legal relation has been consolidated by December 31, 2023, up to a limit of 10% of the remaining balance after the discounts have been applied.
Finally, the application for tax settlement of overdue tax liability is hosted at the REGULARIZE website, while the application for existing debts with the Brazilian IRS must be carried out electronically at the Virtual Service Center (e-CAC).
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