Dear Readers: The purpose of this Tax Bulletin aims to update our customers and other interested parties on the major issues being discussed and decided within Judiciary, Legislative and Executive level. In this 83 nd Issue we are dealing with 16 different issues in Case of Law, Legislation and Consultation Solution. To directly access each texts, click on: Case Law STF - acknowledged General Repercussion • Constitutionality of the penalty requirement on absence or delay in delivering the Tax Debts and Credits Statement (DCTF) - Art. 7th, II of Law 10.426/2002 STJ - selected Recurrent Appeals • Re-directing - tax execution - irregular dissolution - at the time responsible for generator fact or the illegal closure of the activities STF - ICMS - No proportional credit simultaneously to the calculation basis reduction. STJ - PIS/COFINS - payment suspension - exclusive assessment of assumed credit. Legislation and Consultation Solution Executive Declaratory Act number 3/2015 - Privileged Tax Regime - Holding Companies no Substantial Eco- nomic Activity. RFB Ordinance number 1754/2015 - Differentiated Economic-Tax Follow-up - Individuals RFB Ordinance number 1755/2015 - Differentiated and Special Economic-Tax Follow-up - Legal Entities RFB Normative Instruction number 1598/2015 - Brazilian Authorized Economic Operator Program RFB Normative Instruction 1599/2015 - DCTF New Regulation RFB Normative Instruction 1600/2015 - Special Customs Regimes RFB Normative Instruction number 1603/2015 - Free-trade zone of Manaus - Qualification Procedure Consultation Solution number 206/2015 - Income Recognition Moment - Securitization - Notional Presumed Profit and Cash Regime 83 Tax report n° 83 • Year VI • December 2015
Transcript
Dear Readers:
The purpose of this Tax Bulletin aims to update our customers and other interested parties on the major issues being discussed and decided within Judiciary, Legislative and Executive level.
In this 83nd Issue we are dealing with 16 different issues in Case of Law, Legislation and Consultation Solution.
To directly access each texts, click on:
Case Law
STF - acknowledged General Repercussion
• Constitutionality of the penalty requirement on absence or delay in delivering the Tax Debts and Credits Statement (DCTF) - Art. 7th, II of Law 10.426/2002
STJ - selected Recurrent Appeals
• Re-directing - tax execution - irregular dissolution - at the time responsible for generator fact or the illegal closure of the activities
STF - ICMS - No proportional credit simultaneously to the calculation basis reduction.
Consultation Solution number 232/2015 - IRPJ and IRPF - Penalties
Divergence Solution number 07/2015 - Antidumping duties - Jurisdiction
83Tax report n° 83 • Year VI • December 2015
The offices of Souza, Schneider, Pugliese and Sztokfisz Advogados are available to its clients for any clarification regarding the above-mentioned subjects.
Enjoy the reading!
83Tax report n° 83 • Year VI • December 2015
Jurisprudência
STF - acknowledged General Repercussion
• Constitutionality of the penalty requirement on absence or delay in delivering the Tax Debts and Credits Statement (DCTF) - Art. 7th, II of Law 10.426/2002
On 12/10/2015, the Virtual Bench of the Federal Supreme Court (STF) has positioning on the existing General Repercussion of the discussion on the constitutionality of the penalty requirement from absence or delay in delivering the Federal Tax Debts and Credits Statement -DCTF provided for in article 7th, II of law 426/2002 calculated by means of the percentage to be assessed each month on the taxes values to be informed. Such issue shall be discussed in the Extraordinary Appeal (RE) number 606.010/PR reported by Hon. Minister Marco Aurélio.
STJ - selected Recurrent Appeals
• Re-directing - tax execution - irregular dissolution - at the time responsible for generator fact or the illegal closure of the activities
On 12/14/2015, Minister Herman Benjamin, of High Court of Justice (STJ) selected the Special Appeal number 1.564.340/SP for processing under the recurrent appeals rules which shall render the conclu-sions adopted in such proceeding applicable to other proceedings in progress referring to the same issue. The controversy limits to define the manager-member identification to whom the tax execution should be re-directed in any irregular dissolution, that is, against to the responsible at the generator fact or the illegal closure of the business activities.
STF - ICMS - No proportional credit simultaneously to the calculation basis reduction.
On 12/01/2015, the First Bench of the Federal Supreme Court (STF) ruling on the Special Appeal according to specific court regulations (only 2nd instance) number 572.824/RS has declared the constitutionality of the state legislation providing on the prohibition to use the ICMS credits established as a condition to use the consistent benefit at the tax determination under reduced calculation basis.
In Min. Edson Fachin’s understanding, this is a peculiar situation represented by the optative regime. The ICMS credit records is undue when refers to the tax benefit granted by Tax Administration and freely accepted by taxpayer that has consented, on the other hand, with the prohibition of such credit.
Lastly, the ADI number 1.502-MC/DF ruling was called as reported by Min. Ilmar Galvão to affirm the Judiciary’s authorization to maintain the credit should cause the STF acting as positive legislator contrary to its traditional case law on the issue.
On 12/01/2015, the Second Bench of the High Court of Justice (STJ) unanimously conclude the company purchasing the cattle, chicken, and pork meet for resale is not entitled to the full credit of PIS and COFINS as provided for in articles 3rd, 2nd§ of Law number 10833/2003 and Law number 10637/2002 but the
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right to the assumed credit provided for the articles 34 of Law number 12058/2009 and 56 of law number 12350/2010.
According to Rapporteur Min. Mauro Campbell Marques, the exemption institutes and payment suspen-sion should not be confused. While the first the tax generator fact does not occur due to the law, in this one arises the tax obligation and possible establishment if tax credit.
Under such considerations, the Rapporteur highlighted the articles 3rd , 2nd§ of Law number 10833/2003 and Law number 10637/2002 allowing the credit on exempted purchases. However, such purchases are subject to the PIS and COFINS payment suspension, therefore the general rule to be applied is the exclu-sive assessment of the assumed credit according to articles 34 of Law number 12058/2009 and 56 of law number 12350/2010.
Legislation and Query Solutions
Executive Declaratory Act number 3/2015 - Privileged Tax Regime - Holding Companies no Substantial Economic Activity.
On 12/21/2015 the Executive Declaratory Act (“ADE” number 3 by Inland Revenue Office of Brazil (“RFB”) was published revoking the ADE number 10/2010 that has suspended the effects of including The Netherlands in the list of RFB Normative Instruction no. 1037/2010 for the countries holding the privileged tax regime regarding the legal entities established as holding company that do not carry out the substantive economic activity.
According to ADE number 3/2015, the revocation results from lack of evidence by The Netherlands Govern-ment of the tax legislation justifying the classification review of such country holding said regime. Therefore, the treatment granted by The Netherlands to holding companies that do not carry out the substantive eco-nomic activity shall be deemed privileged tax regime from the publishing of ADE number 3/2015.
RFB Ordinance number 1754/2015 - Differentiated Economic-Tax Follow-up - Individuals
On 12.24.2015, RFB Ordinance number 1754/2015 was published establishing the parameters for the in-dication of the individuals to be subject to the differentiated economic-tax follow-up in 2016 calendar year. According to the 2nd article of the Ordinance, individuals classified in any of the following events shall be indicated to the differentiated follow-up: (A) income value stated in DIRPF related to 2014 calendar year exceeding R$ 14,000,000.00 and cumulatively the annual credit entry amount informed in DIMOF related to the same period exceeds R$ 5,200,000.00; (b) assets and rights informed in DIRPF for 2014 calendar year, which value exceeds R$ 73,000,000.00 and cumulatively the annual credit entry amount in DIMOF in the same period exceeds R$ 5,200,000.00; (c) the annual rental amount informed in DIMOB for 2014 calendar year exceeds R$ 2,600,000.00; (d) the rural properties value belonging to the holder or his dependents
______________________________1 3rd Art. Legal entity should deducted from the value determined according to the 2nd article the credits calculated rgarding:(Regulation)2nd§ The value does not entitle to the credit that: (Redaction provided by Decree Law no. 10865 of 2004).II - The goods and services acquision not subject to the contribution payment including the exemption, the latter when resold ot used
as inputs in products or services subject to 0 (zero) rate), exempted or not reached by contribution. (Included by Law no. 10865, 2004)
declared In DITR for 2014 calendar year exceeds R$ 82,000,000.00; or (e) unipersonal investment funds and shareholding in legal entity subject to the differentiated follow-up.
RFB Ordinance number 1755/2015 - Differentiated and Special Economic-Tax Follow-up - Legal Entities
On 12.24.2015, RFB Ordinance number 1755/2015 was published establishing the parameters for the indication of the legal entities to be subject to the differentiated and special economic-tax follow-up in 2016 calendar year.
The following events give rise to the legal entity to the regime in the differentiated follow-up. (A) annual gross income exceeding R$ 165,000,000.00 in 2014 calendar year; (b) annual debts amount declared In DCTF related to 2014 calendar year exceeding R$ 17,000,000.00; (C) the annual salaries amount informed in GFIP for 2014 calendar year; exceeding R$ 40,000,000.00; (d) total annual debts declared in GFIP for 2014 calendar year exceeds R$ 14,000,000.00; or (e) other tax interest criteria.
Regarding the special follow-up the following evens result in the indication of the legal entity to its submis-sion: (a) annual gross income exceeding R$ 1,000,000,000.00 in 2014 calendar year; (b) annual debts amount declared In DCTF related to 2014 calendar year exceeding R$ 100,000,000.00; (C) the annual salaries amount informed in GFIP for 2014 calendar year; exceeding R$ 135,000,000.00; (d) total annual debts declared in GFIP for 2014 calendar year exceeds R$ 45,000,000.00;.RFB Normative Instruction number 1598/2015 - Brazilian Authorized Economic Operator Program
On 12/11/2015, Inland Revenue Office of Brazil Normative Instruction no. 1598 (“IN Number 1598/2015”) was published establishing the rules for the intervening parties’ participation in foreign trade operations in Brazilian Authorized Economic Operator Program (“OEA Program”).
In addition to the rules on OEA Program, RFB IN number 1598/2015 provides that those qualified to the Express Custom Clearance (Blue Line) shall state the interest in participating in OEA Program shall receive the provisional certificate. Those with no interest in certifying provisory shall have the benefits of the Blue Line up to March 1st, 2016.
RFB Normative Instruction 1599/2015 - DCTF New Regulation
On 02/14/2015 the RFB Normative Instructions no. 1599/2015 was published providing on the rules to submit the DCTF and revokes RFB Normative Instruction no. 1110/2010 regulating the subject to date. RFB Normative Instruction no. 1599/2015 contains in summary: the obligatory events and exemption of the DCTF submission; form and term to submit; taxes stated In DCTF, applicable penalties; data treatment as informed in DCTF, and rules for DCTF rectification.
RFB Normative Instruction 1600/2015 - Special Customs Regimes
On 12/15/2015, the Normative Instruction number 1600 of December 14, 2015 was published providing on the special customs regimes of temporary admission and export. In summary, the Normative Instruction set forth the conditions and terms to the granting and application of the regime; the general procedures; simplified procedures, assets intended to the projects or cultural events; assets to the scientific research
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and technological development.
RFB Normative Instruction number 1603/2015 - Free-trade zone of Manaus - Qualification Procedure
On 12/16/2015 the Normative Instruction number 1603 by Inland Revenue Office of Brazil was published establishing the qualification procedures for importers, exporters, and those entering in the Free Trade Zone of Manaus for operation in the Foreign Trade Integrated System (Siscomex) and representative accredita-tion for the performance of customs clearance activities.
Consultation Solution number 206/2015 - Income Recognition Moment - Securitization - Notional Presumed Profit and Cash Regime
COSIT Consultation Solution number 206 was published on when the income is recognized arising from the receipt by real estate developing company when paid by securitization company in securities receivables disposal operation for the sold units.
Actually, the Consultant was the real estate developing company subject to the Notional Profit that has recognized its incomes and offered to the taxation based on cash regime. It intended to securitize its portion in the portfolio to anticipate the receivables advance with discount. SRFB was inquired for the operation performance on the proper base of taxes calculation: whether the value received with discount or original receivable amounts from customers.
Answering the Consultation made, COSIT stated the understanding that Consultant shall recognize the income on the payment by the securitizing company of the receivables disposal. Regarding the calcula-tion basis, COSIT understands the taxation system based on notional profit does not allow any deduction of discount from the credits assignment. Consultant shall recognize the original credit value as income according to COSIT.
Consultation Solution number 207/2015 - REINTEGRA - IRPJ and CSLL
On 12.03.2015, Consultation Solution number 207 by COSIT was published providing on the tax treatment to be given to the credits determined in Special Regime of Taxes Values Integration “(REINTEGRA”) for IRPJ and CSLL calculation.
When REINTEGRA was established by law no. 12.546/2011, there was no mention to the inclusion or not of amounts determined in profit subject to IRPJ and CSLL assessment. However the Provisional Measure no. 651/2004 published on 07.10.2014 and converted into Law number 13043/2014 on 11/14/2014 provides on the exclusion of the credits from both taxes calculation basis, but related its effectiveness to the publishing of the Executive Authorities act on the percentage applicable to the credits calculation. Later on, the MF Ordinance number 428/2014 was published on 10/01/2014 determining the percentage applicable to the credits calculation.
When analyzing the changes history of the tax legislation regarding REINTEGRA, COSIT understood to be allowed the credit exclusion from IRPJ and CSLL calculation basis only from the publishing of the MF Ordinance number 428/2014, that is 10/01/2014.
On 12/22/2015, Consultation Solution number 225 was published issued by General Coordination of the Taxation systems (“COSIT”) that has issued the understanding that the amounts remitted to third parties abroad, as reimbursement for the tax payment assessed on import are not subject to the Withholding Income Tax. (“IRRF”).
The IRRF assessment was questioned in such consultation on the amounts remitted by Brazilian exporter abroad for the reimbursement of import tax according to incoterm delivery duty paid (“DDP”). Pursuant to this clause, all taxes charged in the import by the products destination country are paid by the exporter in Brazil that reimburses the foreign services providers after the payment of the due taxes. On the analysis of the issue, COSIT based on articles 153, III of the Constitution, 43 of the National Tax Code , and 682 and 685 of RIR/99, understood the reimbursement of taxes paid abroad results in no assets increase, therefore, is not subject to the IRRF assessment. COSIT notes that the payment nature shall be evidenced by suitable documentations the remittance is not assessed.
Consultation Solution number 232/2015 - IRRF and IRPF - Penalties
On 12/11/2015, COSIT Consultation Solution number 232/2015 was published providing on IRRF and IRPF assessment on the amounts received by individual due to the contractual breach and paid by legal entity. In COSIT understanding, the penalties paid by contractual breach has the income nature and shall be subject to IRRF assessment, and IRPF at the annual adjustment, using the monthly progressive table. The reason is, the tax legislation has no provision in any assessment or exemption of such values. Only in the contractual termination, according COSIT, such taxes should not be paid.
Divergence Solution number 07/2015 - Antidumping duties - Jurisdiction
On 12/03/2015, the Divergence Solution number 07 by COSIT was published on the understanding that the Inland Revenue Office of Brazil is not entitled but the Foreign Trade Department (“SECEX”) of the Ministry of Development, Industry and Foreign Trade and the Foreign Trade Chamber (“CAMEX”) of the Council of the Government of the Presidency of the Republic to solve the issues related to the antidumping duties based on article 146 of the Decree number 8058/2013.
In COSIT understanding, RFB has only the jurisdiction to charge and inspect the fulfillment of the obligations from the antidumping duties according to article 7th, 1st§ of Law number 9019/95, and SECEX AND CAMEX are entitled to provide and construe on the rules on such issue. COSIT reasoning basis is on the understanding that the antidumping duties have no tax nature but administrative-regulatory.
Therefore, according to the Divergence Solution number 07/2015, on the interpretation of the antidumping duties, the Consultations shall be made to SECEX and CAMEX.
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83Tax report n° 83 • Year VI • December 2015
Team responsible for the preparation of that Tax Note:
