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MP 766/2017 - Tax Regularization Program (Programa de Regularização Tributária - PRT)

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1/5/2017 5:25 PM Demarest News

MP 766/2017 - Tax Regularization Program (Programa de Regularização Tributária - PRT)

Provisional Measure No. 766/2017 was published in the Federal Gazette on January 5, 2017, instituting the Tax Regularization Program (Programa de Regularização Tributária - PRT), in accordance with the previous announcement made by the Ministry of Finance in December 2016.

The PRT allows individuals or legal entities to regularize any tax or non-tax indebtedness, registered as an executable tax debt or otherwise, expired on or before November 30, 2016. Adhesion to the PRT shall occur within a term of up to 120 days, as of the publication of the regulation by the Federal Revenue Service of Brazil (Receita Federal do Brasil - RFB) and by the Attorney-General Office of the Ministry of Finance (Procuradoria Geral da Fazenda Nacional - PGFN), which shall be enacted within 30 days as of January 5, 2017.

The PRT encompasses debts subject to previous installments, under administrative or court dispute, as well as to the entirety of liabilities in the name of any respondent under the condition of taxpayer or person in charge of taxes. Provisional Measure No. 766/2017 also allows indebtedness originating from future assessments to be regularized by means of the PRT, provided the term of 120 days for adhesion is complied with.

The taxpayer who opts-in to the PRT may settle their debts by means of one of the following modalities:

I. In case of debts registered or not as executable tax debt:

(a) Prompt payment in cash of 20% of the amount of the consolidated outstanding debt, and payment in installments of the remaining balance in up to 96 monthly and successive installments;

(b) Payment of the consolidated outstanding debt in up to 120 monthly and successive installments, based on the minimum percentage applicable to the consolidated amount.

The payment in installments of debts registered as executable tax debt, whose consolidated value is below BRL 15 million does not depend on collaterals. However, the installments of debts above this amount do depend on the submission of a surety bond or court-ordered guarantee.

II. In the case of debts not registered as executable tax debt:

(a) Prompt payment in cash of at least 20% of the amount of the consolidated outstanding debt and settlement of the remaining balance by means of the tax loss credits and negative basis of CSLL credits or other taxpayer credits related to taxes under the RFB's management;

(b) Payment in cash of at least 24% of the consolidated outstanding debt, in 24 monthly and successive installments, and settlement of the remaining balance by means of the tax loss credits and negative basis of CSLL credits or other taxpayer credits related to taxes under the RFB's management.

Upon settlement of the debts, the tax loss credits and negative basis of CSLL may be used if accrued until December 31, 2015 and declared until June 30, 2016. Such credits may be: (i) of the taxpayer or the person in charge of the taxes or jointly liable for the indebtedness; and (ii) of controlling or controlled companies, directly or indirectly, or companies that are directly or indirectly controlled by a company with headquarters in Brazil on December 31, 2015, provided such condition is maintained until the date of the settlement option. The credits of the taxpayer shall nevertheless be used in first place.

The amount of the credit pursuant to tax loss and negative basis of CSLL shall be set forth by the application of the rates defined in the Provisional Measure No. 766/2017. In the event of credit being denied, a 30-day term shall be granted for the payment of the relevant debts.

In case there is a remaining balance of the debts after the amortization with the mentioned credits, such balance may be paid in up to 60 additional installments.

Upon adhesion to the PRT, while the outstanding debt is not consolidated, the taxpayer shall calculate and promptly pay the amount in cash or the value of the installments, in case of payment in installments. The debt installments shall be consolidated on the date of the opt-in to the PRT, and shall be divided by the number of installments indicated, respecting the minimum amount of each monthly installment of BRL 200.00 for individuals and BRL 1,000.00 for legal entities.

The taxpayer who adhere to the PRT shall pay attention to the regular payment of the installments, since the default of 3 installments in a row or 6 installments in any position, or the non-payment of an installment if all other installments are settled, will imply the exclusion from the PRT and the immediate enforceability corresponding to the full amount of the confessed and unpaid indebtedness, as well as the automatic execution of any collaterals offered.

In addition, adherence to the PRT implies the irrevocable and irreversible confession of the debt, the duty to pay the installments regularly, and the fulfillment of FGTS obligations. Once the opt-in is confirmed, the inclusion of debts that are part of the PRT in any kind of payment in installments thereafter is forbidden.

Ultimately, in order to adhere to the PRT, the taxpayer shall waive in advance any court or administrative disputes involving the indebtedness, as well as waive any relevant claimed rights. In case of deposits bound to the debts to be paid in cash or in installments, these shall be automatically converted into a definitive payment or into income for the Federal Union.

We shall be at your disposal to clarify any doubt related to your adherence to the PRT.

Demarest Advogados


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