10/7/2024
In this tax update, we highlight the latest and most significant updates in tax law during the month of June. Among all recent changes, three deserve special attention.
Below are the details of these crucial updates and their impact on taxpayers’ daily lives.
Brazilian Federal Revenue establishes the Declaration of Tax Incentives, Waivers, Benefits, and Tax Immunities (DIRBI)
On June 18, 2024, the Brazilian Federal Revenue published Normative Instruction No. 2198/2024, instituting the Declaration of Tax Incentives, Waivers, Benefits, and Tax Immunities (DIRBI). This new ancillary obligation must be filed by legal entities and consortia benefiting from tax incentives listed in the Single Annex of the aforementioned Normative Instruction, such as: (i) Emergency Program for the Revival of the Events Sector (PERSE); (ii) Special Regime for Acquisition of Capital Goods by Exporting Companies (RECAP); (iii) Program for Support of Technological Development in the Semiconductor Industry (PADIS); and (iv) Payroll Tax Exemption.
Strictly speaking, taxpayers must submit DIRBI containing the values of tax credits related to taxes and contributions that were not collected due to the granting of incentives, waivers, benefits, and tax immunities, enjoyed by legal entities since January 2024. The filing is monthly, due by the twentieth day of the second subsequent month to the reporting period, through e-CAC. For reporting periods from January 2024 to May 2024, the declaration must be submitted by July 20, 2024.
Failure to comply with this obligation or late compliance will result in proportional penalties, monthly or fractionally, based on the gross revenue reported for the period, capped at 30% of the benefits enjoyed.
Supreme Federal Court (STF) modulates effects of decision on Constitutional Third of Vacation Pay
On August 31, 2020, the justices of the Supreme Federal Court (STF) decided that “the levy of social contributions on the amount paid as constitutional third of vacation pay is legitimate” (Theme 985/STF), reversing the previously consolidated jurisprudence within the Brazilian Judiciary.
Considering the potential economic impact on companies, in the context of Clarification of Judgment, the Supreme Court, on June 12, 2024, modulated the effects of the decision, establishing that inclusion of vacation pay in the calculation base of employer social security contributions will apply only from the date of publication of the judgment’s minutes on the subject (September 15, 2020).
Therefore, starting from September 15, 2020, companies are obligated to collect social security contributions on the constitutional third of vacation pay, except for contributions already paid before that date and not judicially contested up to the same date, which will not be reimbursed by the Union.
Superior Court of Justice (STJ) retroactively decides on ICMS-ST in PIS/COFINS base over 6 years
The Superior Court of Justice decided to revisit the date for purposes of modulating the effects of the thesis excluding ICMS by Substitution Tax (ICMS-ST) from the base of PIS and COFINS.
The panel chose March 15, 2017, as the milestone for applying the thesis, the date when the Supreme Federal Court judged the “century thesis” in Theme 69 of general repercussion, removing ICMS from the base of PIS and COFINS and establishing temporal effects for this decision.
This means that ICMS-ST can be excluded from the PIS and COFINS calculation base from the mentioned date, except in cases where the taxpayer had already filed this request administratively or judicially.
Our tax team is available to provide further clarification and guidance on the topics covered.
Co-authored by: Thais Ribeiro Bernardes Casado and Tiago Zonta Guerreiro.
