By Evelin Spinosa
The Brazilian Federal Revenue (“RFB”) through Normative Instruction (“IN RFB”) No. 1.810, of June 13, 2018, unified the legal regimes of tax offsetting (tax and social security credits – INSS), related to the legal entities that use the Digital Bookkeeping System for Tax, Social Security, and Labor Obligations (e-Social).
Hence, the companies may offset federal taxes of any nature (Ex.: PIS/COFINS, IRPJ, CSLL) against the social security contributions (INSS) and contributions destined to other entities (third parties).
Let it be pointed out that this is an old request of taxpayers, especially in relation to the companies that have an accumulated stock of tax credits.
In 2007, the Federal Revenue Office and the Social Security Revenue Office were incorporated into the RFB, through Law No. 11457, of 2007, which was called the “Super Revenue Office”, which as of then, accumulated the duties of collecting taxes and social contributions. With this change, there is a direct impact in the form of collection of federal taxes and in the legislation that addresses offsetting, considering that article 74 of Law No. 9430, of 1996[1] establishes that the taxpayer who obtains tax credit may use it in the offsetting of his own debts related to any taxes and contributions administered by the Federal Revenue Office.
Hence, with the unification of the process of collection of taxes and social contributions around the so-called Super Revenue Office, the requirement for offsetting of social security contributions with the other federal taxes was fulfilled by the legislation.
On the other hand, the RFB, based on the understanding granted to law No. 11457/07, claimed the impossibility of offsetting tax credits against social security debts and vice-versa, due to the systems of control of the collection of these taxes/contributions not being unified. Since them, all regulations issued forbade the offsetting of tax credits obtained by the taxpayers against social security contributions.
It was in this context that IN RFB 1.810 was issued, in 2018, which altered article 65 of the IN RFB 1.717, of 2017[2]:
- Original Wording of IN 1.717/17
Article 65. The taxpayer who obtains credit, including credits which have become final and unappealable, related to tax or contribution managed by the RFB, subject to restitution or reimbursement, may use it in the offsetting of his own debts related to any taxes and contributions administered by RFB, with due regard for the social security contributions, the procedure for which is provided for in Sections VII and VIII of this Chapter, and the contributions collected for other entities or funds. (excerpt altered)
- Wording Altered by IN 1.810/18
Article 65. The taxpayer who obtains credit, including credits which have become final and unappealable, related to tax or contribution managed by the RFB, subject to restitution or reimbursement, may use it in the offsetting of his own debts related to any taxes and contributions administered by RFB, with due regard for the offsetting addressed in Section VII of this Chapter. (excerpt altered)
The new wording ceased to mention the remark as to the offsetting of social security contributions against credits related to any taxes administered by the Brazilian Federal Revenue, with due regard for the offsetting of the social security contributions by the taxpayer who does not use the e-Social.
Hence, two offsetting regimes of social security contributions were instituted:
- General regime: referring to the companies that use the e-Social; and,
- Special Regime: for the companies that do not use the e-Social, calculating the social security contributions in the GFIP/SFIP, which, in turn, is being replaced by the DCTFWeb[3].
It can be noted that the Federal Government intends to stimulate the migration of the companies to the eSocial[4], and also allows the use of tax credits accumulated by the taxpayers for offsetting against the social security contributions.
Additionally, the Federal Revenue, upon issuing IN 1.810/18, not only unified the legal regimes of tax offsetting (tax and social security credits – INSS), in fact, it instituted a new offsetting regime which shall be effective hereinafter.
Therefore, the stock of credits previously existing in the bookkeeping of the taxpayer cannot be used in the new regime, that is, they may only be offset with the limitations imposed (contributions x contributions or other taxes x other taxes), or they may be subject of restitution by the taxpayer.
We point out that the main changes in the regime, determined through article 76 of IN 1.717/17[5]5, which addresses the forbiddances in the offsetting regime, which stipulated restrictions to the use of credits obtained by the taxpayer:
- Debts prior to the use of eSocial: the utilization of debts offsetting related to periods prior to the utilization of the eSocial shall not be allowed, both in relation to the other taxes administered by the RFB and to the social security and third parties’ contributions;
- Credits prior to the use of the eSocial: the utilization of credits obtained in periods prior to the utilization of the eSocial shall not be allowed, both in relation to the other taxes administered by the RFB and to the social security and third parties’ contributions;
- Social security and third parties’ contributions when the taxpayer does not use the eSocial: the offsetting of social security and third parties’ contributions shall not be allowed, unrestrictedly, against the other taxes administered by the RFB, if the taxpayer does not use the eSocial to calculate the mentioned contributions.
- Alteration as to the offsetting of amounts referring to the withholding of social security contributions in the assignment of labor and in contract work, with the definition of regimes for the companies that use the eSocial and the ones that remain calculating the contributions through the GFIP.
The regime of the companies that do not adopt the eSocial, that is, that calculate and collect their contributions through the GFIP/SFIP, remains unaltered. Hence, for these taxpayers, there was no unification of the social security regimes and of the other federal taxes.
Therefore, the time is to recalculate the tax planning, the option for the taxation regimes (Taxable Income, Presumed Income, and Simples Nacional) and structure the fiscal guidelines for the next years.
However, for the second semester of the calendar year of 2018, there is the possibility of some tax economy through offsetting between tax credits and social security credits, especially because several tax benefits of the productive industry were reduced/extinguished (ex.: Lifting of the Burden of the Payroll and Reintegra).
The tax team of Mazzucco & Mello is at your disposal for any additional clarification.
By Evelin Spinosa
[1] Article 74. The taxpayer who obtains credit, including legal credits which have become final and unappealable, related to tax or contribution administered by the Federal Revenue Office, subject to restitution or reimbursement, may use it in the offsetting of his own debts related to any taxes and contributions administered by that Body.
[2] IN RFB No. 1.717, of July 17, 2017: Establishes rules on restitution, offsetting, return, and reimbursement, in the context of the Brazilian Federal Revenue Office.
[3] The Declaration of Federal Social Security Tax Debts and Credits and of Other Entities and Funds (DCTFWeb) is an accessory tax obligation regulated by IN RFB 1.787/2018, which shall be used to calculate the social security contributions (INSS), and to other entities and funds (Third Parties). This Declaration will replace part of the GFIP/SEFIP and shall be fed by the periodical events sent by the taxpayers through the modules of the Public System for Digital Bookkeeping (“SPED”) EFD-Reinf and eSocial. With the enactment of the DCTFWeb, the social security contributions and the ones due to third parties shall be collected by means of the collection document DARF, which will replace the current collection form (GPS).
[4] Decree No. 8373/14 instituted the Digital Bookkeeping System for Tax, Social Security, and Labor Obligations (eSocial). Through such system, the employers will communicate the Government, in an unified form, the information related to workers, such as bonds, social security contributions, payroll, communications of labor accident, notice of termination, fiscal bookkeeping, and information on the FGTS.
[5] “Article 76. (…)
XVII – contributions referred to in articles 2 and 3 of Law No. 11457, of 2007, in the hypothesis where the offsetting referred to in Section I of this Chapter is made by a taxpayer who does not use the eSocial for calculation of the mentioned contributions;
XIX – the debt of the contributions referred to in articles 2 and 3 of Law No. 11457, of 2007:
a) related to a period of calculation prior to the use of the eSocial for calculation of the mentioned contributions; and
b) related to a period of calculation after the utilization of the eSocial with credit from the other taxes administered by the RFB, referring to a period of calculation prior to the utilization of the eSocial for calculation of the mentioned contributions; or
XX – the debt of the other taxes administered by the RFB:
a) related to a period of calculation prior to the use of the eSocial for calculation of the contributions referred to in articles 2 and 3 of Law No. 11457, of 2007, with credit concerning to the mentioned contributions; and
b) with credit of the contributions referred to in articles 2 and 3 of Law No. 11457, of 2007, related to a period of calculation prior to the use of the eSocial for calculation of the mentioned contributions;
Sole paragraph. The tax proceeding referred to in item XIV of the head provision is restricted to the tax proceeding distributed through Distribution of Tax Proceeding Instrument (TDPF).” (NR)