Brazil

Value Added Tax

  • VAT is a State tax. No harmonized measures in the country. Some State have taken measures like Rio de Janeiro has granted a state VAT (ICMS) taxable basis reduction for transactions with hydrated ethyl alcohol.

Corporate Income Tax

  • Postponement of the deadlines for the payment of federal taxes under the Simples Nacional (tax regime applicable to small companies) regime as follows:
    • from 20 April 2020 to 20 October 2020;
    • from 20 May 2020 to 20 November 2020; and
    • from 22 June 2020 to 21 December 2020.
  • Postponement of the deadlines for filing tax returns related to tax year 2019 under the Simples Nacional regime to 30 June 2020.
  • Taxpayers could apply on the website of the Attorney General of the National Treasury to special conditions for the payment of federal tax debts until 25 March 2020.

Social Security Contributions or Payroll Tax

  • Deferral of the employer's contribution to the unemployment severance fund (contribuicao ao fundo de garantia por tempo de service, FGTS) due by legal entities for a period of three months.
  • Payment deadlines of the social contributions on payroll (CPP) and on revenues (PIS and COFINS) related to March and April 2020, postponed to the months of July and September
  • Payment of the CPP may be subject, on the basis of a voluntary adhesion and at the taxpayer’s option, to suspension for two months or to instalment payment (up to 12 months and successive instalments) subject to conditions.
  • Extension of the delivery deadlines of Declaration of Federal Tax Debts and Credits (DCTF) and the Social Security Contribution on Revenue (EFD-Contribution).
  • Reduction of the rates of payroll contributions from 1 April 2020 until 30 June 2020.  
  • Taxpayers could apply on the website of the Attorney General of the National Treasury to special conditions for the payment of social security debts until 25 March 2020.

Other relief measures

  • Temporary zero rate for import duty on listed medical supplies and on products up to 10,000 USD imported through international postal or airmail delivery to combat the COVID-19 pandemic until 30 September 2020.
  • The tax on industrial products (imposto sobre produtos industrializados or IPI) levied on the production of listed medical supplies is reduced to zero until 30 September 2020.  
  • Deadline for submission of the Statement of Brazilian Capitals Abroad (DCBE) is postponed to 6 June 2020.
  • Deadlines to submit federal tax returns to the Brazilian Federal Revenue Service have been extended for taxpayers domiciled in the Municipalities covered by a State Decree that have declared a state of public calamity.
  • Deadline to submit income tax return postponed from April 30 to June 30
  • Reduction in contributions to the S System (which includes the National Service for Industrial Learning – SENAI; the Social Service for Commerce – SESC; the Social Service for Industry – SESI and the National Service for Trade Learning – SENAC).
  • The Tax on Financial Transactions (Imposto sobre Operacoes Financeiras – IOF Credito) rate is reduced to zero for 90 days.
  • Tax procedural terms and deadlines and certain procedural mechanisms for enforcement of administrative collection of federal taxes are suspended for 90 days. 
  • Facilitation of debt renegotiation.
  • Practice of procedural acts under the Brazilian Federal Revenue Service (RFB) are suspended until 29 April 2020.
  • Extension of the validity of the Tax Clearance Certificates relating to Federal Tax Credits and Federal Government’s Collectible Debts (CND) and Liability Certificates with Clearance Effects of Debts related to Federal Tax Credits and Federal Government’s Collective Debts (CPENDS) for 90 days.
  • The State and the Municipality of Sao Paulo published normative acts extending the validity of tax regularity certificate as follows:
    • Extend the validity of liability certificates with clearance effects for 90 days;
    • Extend for 90 days the validity of Joint Debts Clearance Certificates (securities and real estate related taxes) and Joint Liability Certificates with Clearance Effects (securities and real estate related taxes) issued by the Municipal Finance Secretariat;
    • Suspend for:
      • 60 days, the sending of debts recorded as Collectible for the purpose of drawing up protests to the Protests Notary Public;
      • 30 days, the enrolment at the Collective Debts Register;
      • 90 days, the inclusion of pending issues in the Municipal information Register (CADIN);
      • 30 days, the deadlines for filing objections and tax appeals.
  • Tax exemption on donation operations (ITCMD) to the State Health Fund while the Pandemic persists in the State of Rio de Janeiro.
  • Deadlines for suspension of tax payments foreseen in previous measures granting special drawback regime that were extended for one year by the tax authority and that end in 2020 may exceptionally be extended for one more year as from the date of their expiration.

Additional comments

  • The Federal Government has created an exclusive credit line for the payment of wages (Emergency Employment Support Program – PESE).
  • Measure to enhance income of employees: Extinction of the PIS/PASEP Fund which did not received any more deposit since decades with the reallocation of remaining funds into the Severance Pay Fund – FGTS. In parallel, authorization to withdraw an amount of 1045 R$ per FGTS account holder.
  • The tax authorities have launched a link to frequently asked questions (FAQs) regarding tax measures implemented in view of the COVID-19 pandemic. The FAQs, which also compile and explain the tax measures implemented to date, were launched on 20 April 2020 and are available here (only in Portuguese).
  • Draft Bill to protect internal market: this draft has been presented to the House of Representatives at the end of April. It determines the “Green and Yellow Defence Program” proposing to protect the internal market and national assets during a state of public calamity due to the pandemic. In summary, the proposals are suspension of privatisation processes of state-owned companies and prohibition of the sale to foreign capital of companies domiciled in Brazil, including service concessionaires, and manufacturers of essential goods.