By Mariana Martins and Marcelo Blecher
It was published last Thursday, October 17th, in the Official Gazette of the Union, the Provisional Measure (“MP”) 899/19. Dubbed by the government as the “Legal Taxpayer Provisional Measure”, the rule aims to encourage the resolution of conflicts between the Tax Administration and taxpayers, with regard to federal tax debts, in addition to regulating, after 53 years, the tax transaction institute, provided for in art. 156, item III and in art. 171 of the National Tax Code (“CTN”).
This new development can be seen as a change in the Tax Authority's stance and as an indication of the changes that the Government intends to make in the coming years, seeking greater efficiency in tax collection, through the implementation of other alternative means for resolving disputes in tax matters, such as tax arbitration, the subject of Bill No. 4,257/2019, authored by Senator Antonio Anastasia.
According to the full text of MP 899/19, the transaction institute must serve the public interest and observe the principles of equality, tax capacity, transparency, morality, reasonable duration of processes and tax efficiency, and, initially, will be classified into two modalities.
THE first modality, called transaction in the collection of debts registered in the active debt of the National Treasury, is intended for those taxpayers who have irrecoverable or difficult to recover debts, classified as “C” or “D” by the National Treasury Attorney's Office.
In this modality, which seeks to satisfy tax obligations with little prospect of recovery through the traditional route of tax enforcement, the MP provides for discounts of up to 50% (fifty percent) on the accessory installments of the debt (interest, fines and charges), which can increase to up to 70% (seventy percent) in cases involving individuals, micro or small companies and the possibility of payment in 84 (eighty-four) or even 100 (one hundred) monthly installments.
In cases involving debts registered as active debt of the National Treasury, the taxpayer must also waive the right to discuss the debt subject to the transaction in court, implying the irrevocable and irreversible admission of the debt. In addition, the taxpayer may not sell or encumber assets or rights without duly notifying the tax authorities.
THE second modality, called transaction in administrative or judicial tax litigation, aims to reduce costs and achieve procedural savings, and will be aimed at tax theses under discussion in administrative and judicial courts, previously selected by the Minister of Economy, based on an opinion from the PGFN. In this modality, taxpayers interested in the transaction must formalize their adhesion through a notice and specific procedure, to be regulated by by means of an ordinance from the Ministry of Economy, which may provide for discounts and a payment period of up to 84 (eighty-four) months.
In this case, however, the transaction will not authorize the refund of amounts already paid or compensated, nor will it contradict a final court decision.
Regardless of the type, the transaction may be terminated if its conditions and commitments assumed by the taxpayer are not met or if acts tending to empty the assets are found, even if prior to the formalization of the transaction, in the event of bankruptcy or dissolution of the legal entity. In the event of termination, the taxpayer may file an administrative challenge within 30 (thirty) days, and may also have the possibility of regularizing the defect.
The tax team at Mazzucco & Mello Advogados will monitor the stages of conversion into law of MP 889/2019 and the regulation of the institute by the RFB and the PGFN, remaining available for any clarifications on the implementation of the transaction institute.
