On December 29, 2023, the RFB Normative Ruling No. 2,168 was published, regulating the Self-Regulation Incentive Program for taxes in Brazil, initially outlined in Law No. 14,740/2023.
The program’s goal, as the name suggests, is to promote tax compliance and prevent disputes by facilitating the payment of tax debts (the deadline for joining the program is April 1, 2024).
The regulation specifies that the program includes taxes not assessed until November 30, 2023, even if a tax audit procedure has already been initiated.
Additionally, tax liability assessed between November 30, 2023, and April 1, 2024, can also be regularized, provided there is a confession of the debt through the submission or correction of corresponding statements (ancillary obligations). It is worth noting that this benefit does not apply to debts under the Simplified Tax Regime (“Simples Nacional”).
The benefits extend to taxpayers choosing to confess and pay the entire amount, or to pay it in installments, for taxes administered by the RFB (Brazil’s IRS), including tax credits resulting from tax infraction notices, assessment notifications, and decisive rulings that do not approve (fully or partially) tax offset requests.
In this way, taxpayers meeting the above conditions can join the program, enjoying various benefits such as a reduction of up to 100% in fines and interest, installment plans of up to 48 payments, use of tax loss credits, negative net income tax base, and court orders/registered warrants (IOU issued by the judiciary branch) owned or acquired from third parties.
In practice, given that the general rule for payments in Brazil requires monthly disbursement, the mentioned program brings significant benefits to businesses, as it allows the use of credits (typically not allowed indiscriminately) and also offers the option to parcel out monthly tax obligations.
Hence, companies in Brazil should thoroughly assess their situation and explore the opportunities presented by this important government program.