BRASÍLIA: Brazilian companies have now received the information they need to participate in a new government program offering largely favorable terms for the payment of tax debts.
The federal revenue service Feb. 1 released Normative Instruction 1687 containing rules for the Tax Regularization Program established by a government decree issued Jan. 5. The informative instruction defines what credits companies can use within the program.
Companies with credits resulting from financial losses reported as of Dec. 31, 2015, and declared by June 30, 2016, can use these and other accumulated credits to write off up to 80 percent of their outstanding tax debts, with the remaining 20 percent to be covered by an initial cash payment. Companies could also opt for a cash payment of 24 percent over a two-year period, with the remainder of the debt written off using credits.
Companies without credits could join the program with an initial 20 percent cash payment. The remainder would be paid over 96 months, corrected by Brazil’s benchmark interest rate, now standing at 13 percent a year. If no initial cash payment is made and companies don’t have credits, their debts would be paid over 10 years.
Companies have until May 31 to sign up for the program, and a form for this purpose has been placed on the web site of the revenue service.
