Brazil: Provisional Measures Bring Changes to REFIS, PIS and COFINS
A Provisional Measure (PM), issued by the President, does not require prior consent from the legislative bodies and has a validity period of 60 days prior to their expiration. To become effective, they need the Ministry of Finance to issue an ordinance. On the 10th of July (and subsequent correction on the 11th), a Provisional Measure (PM 651/2014) was published which, in addition to other more minor items, introduces changes to REFIS (a special payments programme/amnesty for tax debts).
REFIS provides a tax amnesty whereby debtors (individuals and companies) can benefit from reductions in penalties, interest, legal charges etc by making payments under the scheme. The scheme was introduced in May 2014 and the key changes relate to the amount that needs to be paid as an initial payment – currently this has to be at least 20% of the total tax debt. The PM varies this initial payment amount depending on the level of total debt, as follows:
- 5% of the total debt, for debts not exceeding BRL 1,000,000 in total
- 10% of the total debt, for debts ranging from BRL 1,000,001 to BRL 10,000,000 in total
- 15% of the total debt, for debts ranging from BRL 10,000,001 to BRL 20,000,000 in total
- 20% of the total debt, for debts exceeding BRL 20,000,000 in total
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