Brazil: Changes in tax disputes resolution system

Measures that would introduce changes in the tax dispute resolution system

Measures that would introduce changes in the tax dispute resolution system

The Finance Minister announced the following measures that would introduce changes in the tax disputes resolution system.

  • Provisional Measure n. 1.160/23 (12 January 2023) would revoke the “tiebreaker rule” for the the 2nd Level Federal Administrative Tax Court (CARF) provided in law n. 13.988/20 and reestablish the “casting vote” rule for CARF trials.
    • The CARF is composed by panels of 8 tax experts, 4 tax officials indicated by the government and 4 taxpayers’ representatives indicated by class associations. Until 2020, if there was a tie in the trial votes, the vote of the chairman of the panel, who is always a tax official, would prevail over the other votes. This rule was called the “casting vote.”
    • Law n. 13.988/20 revoked the “casting vote” rule and created a new “tiebreaker rule” based on the in dubio pro taxpayer principle, by which the tax infraction charge against the taxpayer would be dismissed in case of a tie.
  • Two new settlement programs for cases under dispute in the administrative courts, one for individuals, micro and small enterprises and one for companies under audit proceedings, would provide benefits to taxpayers.
  • Provisional Measure n. 1.152/22, which changed the Brazilian transfer pricing regulations, includes a change to the dynamics of the audit process for transfer pricing by creating the possibility of a settlement in the auditing proceeding.

Read a February 2023 report [PDF 152 KB] prepared by the KPMG member firm in Brazil


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