On 4 June 2024, Brazil published Provisional Measure No. 1.227 of 4 June 2024 in the Official Gazette. This bill introduces new reporting rules for legal entities that benefit from tax incentives, tax waivers, and other tax-related incentives.
According to the Federal Revenue Department (RFB), legal entities with operations in Brazil must submit an electronic declaration detailing the tax benefits received and their respective amounts to the RFB. The RFB will define the reportable tax benefits and provide the specific terms, conditions, and deadlines for submitting this information.
The Provisional Measures also penalise legal entities that fail to submit the tax benefits declaration. The penalties are 0.5% on gross revenue up to BRL 1 million, 1.0% on gross revenue over BRL 1 million up to BRL 10 million, and 1.5% on gross revenue exceeding BRL 10 million.
Additionally, the penalty will be capped at 30% of the value of the tax benefits and a 3% fine on any inaccurate, incorrect, or unmentioned amounts. The minimum penalty is fixed at BRL 500.
The Provisional Measure No. 1.227 went into effect on 4 June, 2024.
