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August 16, 2023
2023-1410

Brazil's Complimentary Law number 199 simplifies tax obligations

  • A recently enacted law in Brazil is aimed at reducing tax obligation compliance costs for taxpayers and tax administrations and encouraging taxpayers' compliance.
  • This Tax Alert provides highlights.

On 1 August 2023, Brazil's Official Gazette of the Union published Complementary Law number 199, which establishes the National Statute for the Simplification of Ancillary Tax Obligations. The declared objectives of the Complementary Law include:

  • Reducing the compliance costs of tax obligations for both taxpayers and tax administrations
  • Encouraging compliance by taxpayers

The measures are within the scope of the Federal, State, Federal District and Municipal Powers. The Complementary Law also establishes:

  • The unification of electronic tax-document issuance
  • The use of data from tax documents for calculating tax, the provision of pre-filled declarations, and the provision of corresponding tax payment forms
  • The facilitated payment of taxes and contributions through the unification of collection documents
  • The unification and sharing of tax registries in accordance with tax competence

Ancillary tax obligations related to Income and Revenues of Any Nature (Article 153 of the CF, III) and Industrialized Products (Article 153 of the CF, IV) are excluded from the Complimentary Law.

The Complementary Law also gives tax administrations authority to share tax and registration data whenever necessary to reduce ancillary obligations and increase the effectiveness of tax enforcement. All these simplification initiatives will be managed by the newly created National Committee for the Simplification of Ancillary Tax Obligations (CNSOA), which will be made up of personnel from the Special Secretariat of the Federal Revenue of Brazil, States, Federal District, and Municipalities. The scope of the CNSOA's role is also defined in the text of the Complementary Law.

Finally, the differentiated and favored treatment granted to microenterprises, small businesses, and individual microentrepreneurs opting for the Simples Nacional regime has been preserved.

Aspects of the new law that make the Brazilian tax compliance process more economical, use technology to make it more efficient, and enhance simplification are more than welcome when considering all the aspects required for companies to be up to date with the Federal, State and Municipal tax authorities.

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For additional information with respect to this Alert, please contact the following:

Ernst & Young Brazil

Published by NTD’s Tax Technical Knowledge Services group; Carolyn Wright, legal editor

 

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