Requests to review payment capacity grow in the final stretch of the Zero Litigation – 03/17/2023 – What tax is this

The number of taxpayers who requested a review of their ability to pay debts to be negotiated with the National Treasury and the Federal Revenue Service grew in March, the last month for joining the PRLF-Litigation Zero program.

Applications made in the first half of March exceed by almost 50% those received in the entire previous month (see chart below).

At the request of the blog, the PGFN (Attorney General of the National Treasury) reported having received 113 requests this month, according to data sent this Thursday (16). Of these, 35% have already had their analysis completed or considered impaired, and 19% are under analysis or awaiting the submission of more information.

In January, 77 revision requests were received. In February, 76. Of the total sent this year, 59% had the analysis completed or considered impaired.

The institution claims that it does not have separate data on how many requests for revision are related to Zero Litigation. That is, the numbers below may include taxpayers who intend to adhere to other modalities of transaction of their liabilities, by adhesion or individually, within the scope of the Revenue Service or the Attorney General’s Office.

Enrollment in the program began in February and ends on March 31. At the beginning of last month, the Federal Revenue sent taxpayers information on payment capacity, calculated by the PGFN, and on the actions under discussion at the administrative level that can be negotiated.

Based on the two pieces of information, it is possible to calculate, in a spreadsheet from the Treasury, which discounts are offered by the government, which can reach 100% of fines and interest, limited to 65% of the total amount under discussion at the administrative level.

In order to have a discount, it is necessary that the amount of debts included in the program exceeds the payment capacity.

On March 6, the PGFN published detailed information on the calculations and procedures so that the taxpayer could question the data about his financial situation.

For lawyer Carlos Eduardo Orsolon, a partner in the tax area at the Demarest office, the publication by the attorney’s office was important for taxpayers to be able to file a challenge more safely.

He fears, however, that the tight deadline will make it difficult for some companies to join, if the response to the request does not come out by the next 31st.

The PGFN states that the review of ability to pay is a joint assessment procedure (Tax and taxpayer) of the possibility of tax credits being honored over a period of five years. This implies the analysis of economic and financial data, as provided for in art. 30 of Ordinance 6,757/2022.

There is no set deadline for completion of the review procedure, says the agency. “The above data demonstrate that the outflow of these requests has been satisfactory”, says the institution.

The review is carried out by a National Treasury attorney, after questioning the taxpayer through the Regularize system.

limited discounts

Carlos Eduardo Orsolon, from Demarest, says that the lack of discount for those with high payment capacity makes it uninteresting for large companies to join the program, even in cases where there is no dispute to the PGFN calculations.

“We are not seeing great interest from our customers, even though some have access to the use of tax losses, because they do not have the discounts. We are talking about large and solid companies, who believe in the discussions”, says Orsolon.

“If they had an incentive to really reduce litigation, they might even consider doing that. To pay 100% of the debt, often in two or eight installments, many companies say, ‘no, let’s discuss it, because we have chances of success’.”

The program deals with charges under discussion in the administrative spheres and which may later still be questioned in the Judiciary by the taxpayer.

The program launched in January by the Ministry of Finance is officially called PRLF (Fiscal Litigation Reduction Program). It provides for the renegotiation of charges on individuals and companies.

Shares that are under discussion within the scope of the Federal Revenue Offices or CARF (Administrative Council of Tax Appeals) can be traded, as well as small value disputes (up to 60 minimum wages) in administrative litigation or registered in active debt of the Union.

The government estimates that it will obtain R$ 35 billion in extraordinary income from the program. There would also be a permanent gain of R$ 15 billion by reducing conflicts.

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