In Brazil, guidance concerning a tax amnesty program was recently released.
The Brazilian tax authorities on 16 June 2017 issued Normative Instruction 1,711/2017 with respect to the tax amnesty program (Programa Especial de Regularização Tributária—PERT). The new guidance provides that taxpayer applications for tax relief under the PERT regime must be filed by 31 August 2017.
The tax amnesty program allows Brazilian taxpayers to resolve outstanding tax liabilities using a combination of cash and net operating losses (NOLs). For instance, a tax liability may be settled by paying 20% in cash and the remaining 80% through offsetting NOLs. A taxpayer may use the NOLs of one entity or of the consolidated group, provided the NOLs were reported before December 2015.
The program was introduced by Provisional Measure* 783/2017.
July 2017 update
A final form for PM 783, as of 28 July 2017, is still being considered by the Brazilian Congress, and it is expected that several revisions could be made during this process. The website of the tax authority in Brazil already addresses the tax amnesty program being considered, using the conditions provided by the current text of PM 783.
*In Brazil, a “Provisional Measure” (Medida Provisória—MP) is an “act” issued by the president, with the authority of law until later approved by Congress. The Provisional Measure is effective as from its date of publication for a 60-day period, but it may be extended for an additional 60-day period (for a total of 120 days) on a request from Congress.
The tax amnesty program (PERT) allows for settlement of:
For more information, contact a tax professional with KPMG’s Latin America Markets Tax practice:
Devon M. Bodoh | +1 (202) 533-5681 | firstname.lastname@example.org
Alfonso A-Pallete | +1 (305) 913 2789 | email@example.com
Murilo Mello | +1 (305) 913 2781 | firstname.lastname@example.org
Luis Wolf Trzcina | +1 (305) 913 2778 | email@example.com
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