Following criticism from legal experts regarding restrictions on the use of tax losses and negative CSLL basis in tax transactions, the National Treasury Attorney General's Office (PGFN) backed down and revoked section II of article 36 of Ordinance 6,757, published earlier this week, which provided that these credits could only be used to pay off interest and fines, excluding the principal amount included in the transaction. The change is in Ordinance 6,941/2022, published this Friday (5/8) in the Federal Official Gazette.
However, the other restrictions on the use of credits remain in place. As a result, tax experts consulted by JOTA still see the risk of judicialization of the new rules for tax transactions. They argue that the ordinance that regulated the changes brings restrictions not provided for in Law 14,375/2022, which introduced the new conditions for the transaction.
Other limitations on the use of tax losses and the negative CSLL basis include the provision that the credits may only be used in the transaction of irrecoverable or difficult-to-recover debts and only on an exceptional basis, when the debtor's other credits are non-existent or have been exhausted. In addition, the use of these credits is not applicable to the types of transaction by adhesion and simplified individual.
The simplified tax transaction is a modality created by the PGFN when regulating Law 14,375, which covers debts between R$1 million and R$10 million and has rules that facilitate taxpayer access. The new modality comes into effect on November 1st. The individual transaction figure already existed, but the ordinance released earlier this week lowered the minimum amount for membership from R$15 million to R$10 million. If the debt is suspended by court order or secured by seizure, the minimum amount drops to R$1 million.
Taxpayers who have debts below R$1 million registered in active debt can only participate in the transaction by joining, that is, through the publication of a notice by the PGFN.
Enacted in June, Law 14,375 increased the maximum discount on tax transactions from 50% to 65% and the maximum number of installments from 84 to 120. In addition, the legislation introduced the possibility of using tax losses and negative CSLL basis to deduct up to 70% from the remaining balance after discounts.
Judicialization
To JOTA, tax experts said they believe that the discussion on the use of tax losses and negative CSLL basis can be taken to the Judiciary, as happened when Ordinance 9,917/2020 was published, which regulated Law 13,988/2020, or the Legal Taxpayer Law, which created the tax transaction institute.
At the time, the ordinance established a limit of R$15 million for debts whose holders would be entitled to participate in the individual tax settlement. The restriction led taxpayers to go to court claiming that the rule had established a restriction that was not provided for in the legislation. The level of R$15 million has now been reduced to R$10 million by Ordinance 6,757.
“Although there has been a retreat by the PGFN, the other restrictions, which persist, are not provided for in the law and, in our view, contradict the legislator’s intention of allowing the settlement of debts transacted with the use of tax losses and negative CSLL basis. This opens room for discussion before the Judiciary”, assesses Álvaro Martins Rotunno, from Gaia Silva Gaede Advogados.
Mariana Rodrigues, a lawyer specializing in Administrative Tax Law at Finocchio & Ustra Advogados, emphasizes that the provisions that provide that the use of credits will be “exceptional” and at the “exclusive discretion of the Attorney General’s Office of the National Treasury” were maintained, in addition to the prohibition on their use in cases of transactions by adhesion and simplified individual transactions. The lawyer also sees the possibility of judicialization of the issue.
“Considering that the restrictions were maintained by the new ordinance and that Law 14,375/2022 did not foresee any of these limitations, taxpayers may consider the chances of judicializing the issue, in order to have the benefits provided for by law duly protected”, he noted.
Pedro Grillo, from Brigagão, Duque Estrada Advogados, points out that the restrictions on the use of tax losses and the negative CSLL basis practically “make it impossible” to use the credits. “Although there is still no case law on the subject, taxpayers will certainly question the restrictions, as they are such that, in practice, they will end up making it impossible for many companies to use tax losses and the negative CSLL basis, frustrating the objective pursued by the legislator when enacting the law,” he stated.
According to him, the controversy revolves around the limits to the legislative decision and the regulatory power of the PGFN in terms of transactions. “This issue has already been discussed in the Judiciary under the focus of Ordinance 9,917, which established a limit to individual transactions not provided for in the general transaction law [Law 13,988/20]”, he commented.
Attorney Bruna Luppi, partner in the Tax area of Vieira Rezende Advogados, believes that the new ordinance meets one of the taxpayers' desires and makes the transaction more attractive, but "the use of IRPJ tax loss credits and CSLL negative basis still comes up against other important limitations, such as the provision of exceptionality of this hypothesis, to be applied only when demonstrated to be essential for the composition of the regularization plan, and only in relation to debts considered irrecoverable or difficult to recover".