Brazil’s new Tax Regularization Settlement Program
Provisional Measure 783/2017 published in May 31st, 2017 introduced the Tax Regularization Settlement Special Program (called “PERT”) …
Provisional Measure 783/2017 published in May 31st, 2017 introduced the Tax Regularization Settlement Special Program (called “PERT”) with the purpose of giving Brazilian taxpayers an opportunity to settle federal tax debts.
The “PERT” provide the partial amnesty of penalties (including fine and interest) and consists on the possibility of settling federal tax debts according to special conditions.
Only for debts under administrative discussions, PERT allows the settlement of the debts with the use of tax credits, including tax losses carried forward.
The taxpayer may choose to pay the debt in up to 120 installments without reductions. However, in order to take advantage of the amnesty of penalties or to use the tax credits, the taxpayer must pay an initial installment corresponding to 20% of the consolidated debt value. For debits under BRL 15 million, the initial installment is 7.5% of the amount.
The taxpayer who chooses to pay off the outstanding balance after the initial installment will take advantage of a 90% discount on interest, 50% on fines and 25% on legal and attorney fees. If the Company choose to pay the outstanding balance in installments it can be done in up to 145 installments with a reduction of 80% in interest and 50% in the case of fines.
There is also an option to install the payment of the remaining amount in up to 175 months, with each installment being calculated based on 1% of the gross revenue earned in the last month before the payment, not lower than 1/175 of the consolidated debt, in this case with a discount of 50% interest and 25% in the fine.
The deadline to join the program is August 31st, 2017, and it may be included debts held until April 30th, 2017.
Binding to the PERT implies the impossibility of inclusion of same debts in any other form of future installment payment, except for the hypothesis of conventional installment payment described in art. 14-A of Law 10.522 of 2002, as well as obligating the withdrawal of any administrative and judicial appeals.