Brazil: Tax relief, amnesty applications due 31 August 2017

Tax amnesty program in Brazil

In Brazil, guidance concerning a tax amnesty program was recently released.

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The Brazilian tax authorities on 16 June 2017 issued Normative Instruction 1,711/2017 with respect to the tax amnesty program (Programa Especial de Regularização Tributária—PERT). The new guidance provides that taxpayer applications for tax relief under the PERT regime must be filed by 31 August 2017.  

Background

The tax amnesty program allows Brazilian taxpayers to resolve outstanding tax liabilities using a combination of cash and net operating losses (NOLs). For instance, a tax liability may be settled by paying 20% in cash and the remaining 80% through offsetting NOLs. A taxpayer may use the NOLs of one entity or of the consolidated group, provided the NOLs were reported before December 2015. 

The program was introduced by Provisional Measure* 783/2017.

*In Brazil, a “Provisional Measure” (Medida Provisória—MP) is an “act” issued by the president, with the authority of law until later approved by Congress. The Provisional Measure is effective as from its date of publication for a 60-day period, but it may be extended for an additional 60-day period (for a total of 120 days) on a request from Congress.

PERT regime

The tax amnesty program (PERT) allows for settlement of:

  • Outstanding federal tax liabilities due as of 30 April 2017
  • Tax liabilities under judicial or administrative discussion, provided the taxpayer ceases litigation
  • Tax liabilities included in previous installment payment or amnesty programs 
  • Certain tax penalties and interest due on late payments

 

For more information, contact a tax professional with KPMG’s Latin America Markets Tax practice:

Devon M. Bodoh | +1 (202) 533-5681 | dbodoh@kpmg.com

Alfonso A-Pallete | +1 (305) 913 2789 | apallette@kpmg.com

Murilo Mello | +1 (305) 913 2781 | mrodriguesdemello@kpmg.com

Luis Wolf Trzcina | +1 (305) 913 2778 | luistrzcina@kpmg.com

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