Judicial Recovery is a relevant mechanism for companies facing financial difficulties, as it allows the continuity of activities and the preservation of jobs while the business company renegotiates its debts with creditors. However, for this process to be effective, the company must pay attention to the importance of regularizing its tax liabilities.  

Tax debts can jeopardize financial restructuring, especially because, in the Brazilian legal system, tax debts have priority for collection, are not subject to judicial recovery and can make the normal course of operations unfeasible. 

Law 14,112, enacted in 2020, amended provisions of the Bankruptcy and Judicial Reorganization Law (Law No. 11,101/2005) and introduced innovations for the treatment of tax debts in this context. Among the changes, the possibility of entering into specific agreements for the installment payment of tax debts stands out, with longer terms and differentiated conditions, in accordance with the legislation. This seeks to reconcile the interest of the Government in receiving the amounts owed with that of companies in maintaining their activities and overcoming the crisis. 

With the new law, there was also a change in case law, which reinforces the need to present tax compliance certificates (article 57 of Law 11.101/05) in order to grant judicial recovery after approval of the plan. Tax compliance can be obtained by adhering to tax installment plans, without requiring full payment of the debt. Thus, while on the one hand it has facilitated the regularization of tax liabilities, on the other hand, its presence has proven increasingly necessary for the consolidation of judicial recovery, to prevent overdue debts from preventing the final approval of the plan. 

Thus, negotiating debts under appropriate conditions can alleviate cash flow during restructuring, ensuring resources for maintaining operations. In this sense, the tax installment strategy ceases to be a mere palliative instrument and begins to play an important role in the success of the recovery process. 

Judicial recovery brings benefits such as the maintenance of activities, the preservation of jobs and an environment conducive to negotiation with creditors. In addition to the possibilities of installment payments provided for by law, these measures strengthen the financial reorganization capacity of companies. As a result, it is expected that the capacity for investment and growth will be resumed, allowing the business to regain competitiveness in the market. 

We conclude that the regularization of tax liabilities is increasingly necessary for the success of judicial recovery, especially after the approval of the plan, in view of the new case law guidance that reinforces compliance with article 57 of Law 11.101. Law 14.112/20 contributed to expanding the possibilities of installment payments and negotiation of tax debts, ensuring greater economic viability for companies in crisis. By seeking such agreements and balancing cash flow, the debtor preserves its operations, generates confidence among creditors and paves the way for a sustainable recovery.