Published on December 29, 2023, Provisional Measure (MP) n. 1.202/2023 is part of a set of measures adopted by the federal government to restore the taxable base for 2024, so as not to impact the fiscal target established in the Budgetary Guidelines Law for 2024.
In this MP, in summary, three significant changes were made to the tax scenario, which will be explored below.
Reinstatement of Payroll Taxes
MP n. 1.202/2023 establishes the gradual reinstatement of payroll taxes for 17 productive sectors starting from April 1 of this year.
To do so, the MP first repeals Law n. 14.784/2023 (as of April 2024), which extended until 2027 the option for payroll tax reduction. As a result, companies that benefited from this Law, meaning those that could replace the 20% employer contribution on payroll with rates ranging from 1% to 4.5% on gross revenue, will resume taxing payroll, but now with a gradual rate scale until 2027.
It is noteworthy that the reduced rates specified in the MP will only apply up to the limit of one minimum wage per insured person, and amounts exceeding this limit will be subject to the common rate of 20%.
Limitation of tax offset for credits arising from final court decisions
MP n. 1.202/2023 also introduced a new rule regarding the tax offset for credits arising from final court decisions.
Under the MP, the Ministry of Finance is authorized to limit the amount eligible for offset when the taxpayer holds credits resulting from final court decisions more than R$10 million.
In this regard, by the Minister of Finance’s act, a monthly limit for the credit that can be offset administratively by the taxpayer will be set, and this limit: (i) must be graduated based on the total value of the credit, and (ii) not be less than 1/60 of the total value of the credit (the total compensation period cannot be longer than 5 years).
Thus, in cases where the taxpayer has a recognized credit exceeding R$10 million through a final court decision, as of the effective date of MP n. 1.202/3023, they must offset their credits in a limited manner, following the guidelines established by the Minister of Finance.
In this regard, Normative Ordinance n. MP 14/2024 has been published, establishing minimum deadlines for the offsetting of credits:
- Credits with a total value from R$ 10,000,000.00 to R$ 99,999,999.99 must be offset within a minimum period of twelve months.
- Credits with a total value from R$ 100,000,000.00 to R$ 199,999,999.99 must be offset within a minimum period of twenty months.
- Credits with a total value from R$ 200,000,000.00 to R$ 299,999,999.99 must be offset within a minimum period of thirty months.
- Credits with a total value from R$ 300,000,000.00 to R$ 399,999,999.99 must be offset within a minimum period of forty months.
- Credits with a total value from R$ 400,000,000.00 to R$ 499,999,999.99 must be offset within a minimum period of fifty months.
- Credits with a total value equal to or greater than R$ 500,000,000.00 must be offset within a minimum period of sixty months.
Repeal of tax benefits from PERSE
Finally, MP n. 1.202/2023 repealed the tax benefits established under the Emergency Program for the Recovery of the Events Sector (PERSE). The program provided for a zero rate of IRPJ, CSLL, PIS, and COFINS for a period of 60 months for companies engaged in the events sector.
The repeal is not immediate. The rule stipulates that the repeal of PERSE benefits will take effect from (i) April 2024 for PIS and COFINS, and (ii) January 2025 for IRPJ and CSLL, when the common rates of these taxes will be reinstated, according to the taxpayer’s chosen tax regime.
From the above, it can be concluded that MP n. 1.202/2023, in its text, brings about the repeal of tax benefits and the limitation of rights for its taxpayers, aiming to achieve federal government revenue goals.
If MP n. 1.202/2023 is maintained and converted into law, the provisions therein may become a source of judicial disputes, as they present various flaws, especially regarding the legal certainty of the affected taxpayers.
Our tax team is available to provide clarification and guidance on the discussed topic.
Co-authored by: Thais Ribeiro Bernardes Casado and Isabela Girardelli Paschoal.
