Tax Newsletter: New Federal Installment Plan – Tax Regularization Program 2021 – Covid REFIS

21st September

The Federal Senate has approved Bill 4728/2020, which grants up to 90% relief from fines and interest and up to 100% relief from legal charges. The text has been pending approval by the House of Representatives since 08.10.2021 and is to be sent to the President of the Republic for sanction.

The Bill innovates by providing greater discounts on fines and interest for companies that prove a decrease in revenues between 03/2020 and 12/2020 – compared to the same period in 2019 – due to the economic recession caused by the COVID-19 virus.

In addition, individuals and companies that join the plan will be able to use their own federal precatórios (writs of payment) or those of third parties to offset the remaining balance, which is very interesting given the rumors about the “federal precatórios default”.

The text maintains the old rule about the possibility of settlement in accord and satisfaction through real estate, which must be evaluated and accepted by the Treasury.

The recommendation is that from now on companies should plan the debts they intend to include in the new incentive installment plan in order to make the necessary arrangements, and also identify the precatórios that may be used to settle the debt.

Leite, Tosto e Barros’ Tax team is available to assist you in this matter.

*This newsletter had the cooperation of partner Fernanda Brito dos Santos.

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