Federal Government Measures
The Brazilian Federal Government has released several measures to minimize the economic impacts of the suspension of several services and supply of goods in the past few days. Such measures have been informed both in official pronouncements and in amendments to the law, including the following, among others:
Extension of the term to file the Individual Tax Return (DIPF):
The original deadline of April 30th to file the Income Tax Return (DIPF) was postponed to June 30th, under Final Ruling (Normative Instruction – IN) of the Brazilian Federal Revenue Service (RFB) No. 1930/2020. Only 6 million returns have been filed thus far, out of the expected 32 million returns. That way, the Government is currently assessing whether the first refund will be paid on the original date of May 31st.
Extension of the Term to File the Statement of Federal Tax Liabilities and Claims (DCTF) and Digital Tax Bookkeeping – Contributions (EFD-Contributions) to July 2020
RFB has issued a final ruling (IN/RFB 1932/2020) postponing the filing of both forms, whose deadlines are as follows:
– DCTF: original deadline was the fifteenth (15th) business day of April, May and June, and will now be the 15th business day of the month of July;
– EFD-Contributions: original deadline was the tenth (10th) business day of April, May and June, and will now be the 10th business day of the month of July; including in the events of dissolution, consolidation, merger and full or partial spin-off.
Deferred PIS/COFINS and CPP (Social Security and Employers’ Contribution – Code 1138-01 Employees/Contractors):
According to Ordinance No. 132/2020, published last Friday, Minister of Finance Paulo Guedes announced the deferral of the three taxes, whose original maturity in April and May has now been transferred to August and October.
Tax on Financial Transactions (IOF) Reduced to 0% on credit, for 90 days:
Measure to further reduce the cost of credit transactions.
Tax on Manufactured Products (IPI) reduced to 0% on Hand Sanitizers (Alcohol Gel) and other products to fight the pandemic:
The Decree covers several products, including the following: hand sanitizer (alcohol gel), disinfectants, safety glasses and protective masks and facial shields, against potentially infectious materials. However, the full list is available in the Appendix to Decree No. 10285/2020.
Import Tax (II) reduced to 0% on over 61 products to fight the pandemic:
The Foreign Trade Chamber (CAMEX) has zeroed the import tax on over 61 pharmaceutical and medical products. The zero rate applies, for example, to coronavirus tests, medical and hospital equipment and devices, gauze, hydrogen peroxide, paper sheets, protective gloves, sterilizers and needles; oxygenation and intubating aids, artificial ventilation devices, thermometers, diagnostic instruments and devices. The full list is available in Resolution No. 22/2020.
Brazilian Federal Revenue Service (RFB) simplifies customs clearance of medical products to fight the Covid-19 outbreak
Final Ruling (Normative Instruction – IN) No. 1927/2020 issued, with the purpose to simplify and accelerate the customs clearance of products imported to fight the Covid-19 outbreak, to maintain the fast supply of the goods listed in the final ruling.
50% reduction on rates paid by companies to independent social service companies (referred to as the “S-System”):
Provisional Executive Act (MP) No. 932 reduced the rates of the contributions payable to the S-System by 50%, considering such institutions have reported reserves in their financial statements.
“Simples” Tax Regime and Extension on Tax Payments:
The Resolution approved by the Management Committee for the “Simples” Tax Regime has extended the term for the payment of federal taxes within the scope of such regime, as follows:
- Firstly, tax assessed in March, originally due on April 20, is extended to October 20;
- Then, tax assessed in April, originally due on May 20, is extended to November 20;
- Lastly, tax assessed in May, originally due on June 22, is extended to December 21.
RFB will publish other procedures relative to this resolution, in due time.
As for the Tax on the Circulation of Goods and on Services of Interstate and Intermunicipal Transportation and Communication (ICMS), in general, the States have determined the extension on the performance of ancillary obligations (States of Alagoas, Espírito Santo, Goias, Maranhão, Mato Grosso do Sul and Rio de Janeiro); exemption on products to fight the Covid-19 outbreak (Federal District and the States of Mato Grosso, Paraná, and Rio de Janeiro); and the State of Sergipe has determined that any default will not result in the cancellation of any active programs for the payment of taxes in installments; and the State of Pernambuco has offered partial release from the payment of the tax liability via tax breaks or other incentives.
Thus, our team is constantly monitoring all government releases and pronouncements on the measures to be taken during the state of emergency, always having the greater good in mind: the health and wellbeing of our people, clients, vendors and partners.
São Paulo, April, 2020