Brazil's tax authority broadened the scope of credits that can be used to settle outstanding debts, following new guidance that distinguishes between discounts and settlement instruments in administrative negotiations.
Brazil’s Federal Revenue Service (RFB) has introduced new flexibility for taxpayers seeking to settle tax debts through administrative transactions, according to RFB Ordinance No. 676 published on 27 April 2026.
The ordinance modifies Article 20 of RFB Ordinance No. 555 from 1 July 2025, which governs tax credit transactions in administrative litigation. The primary change allows taxpayers to use tax loss credits and negative CSLL (Social Contribution on Net Income) tax base credits to amortise the principal amount of tax debts, not just ancillary charges.
This expansion gives taxpayers more tools to negotiate settlements with tax authorities, making debt resolution more accessible and economically viable.
The update follows Ruling No. 990/2026 from the Federal Court of Accounts (TCU), which established a clear distinction between debt discounts and settlement instruments. The ruling confirmed that tax loss carryforwards and negative CSLL bases function as complementary settlement tools that can be applied sequentially.
The revised rules are expected to streamline debt settlement processes and make the Federal Revenue Service transaction programs more attractive to taxpayers.
By broadening the scope of usable credits, the changes support the objectives of Law No. 13,988/2020, which aims to provide negotiated solutions that better match taxpayers’ financial capacity while reducing administrative litigation backlogs.
