Brazilian companies have recently obtained judicial decisions that exceptionally authorize, due to the pandemic of COVID 19, the deferral payment of federal taxes for a period of up to 3 (three) months, provided that the jobs are maintained. So far, there is knowledge of a decision by the Federal District and five decisions by the Federal Court of cities in the countryside of São Paulo (Araçatuba, Barueri, Campinas, Ribeirão Preto and Sorocaba).

The main argument used by taxpayers in their claims, which has been accepted by the first judicial degree in preliminary injunction, is that measures to restrict circulation and social distance to contain the dissemination of COVID 19 are making its financial flow unfeasible, jeopardizing the maintenance of its employees and creating the risk of layoffs. In addition, this deferral would have also been authorized by the legislative body under the provisions of the Ministry of Finance Ordinance No. 12/2012, which provides for such postponement of payments in cases of public calamity.

Thus, the taxes’ deferral payment of, considering the high Brazilian tax burden, would be a way for the company to obtain financial relief, avoiding layoffs and its harmful economic and social consequences.

We understand that, given the scenario experienced today by the country, as well as decisions by the Brazilian Supreme Court in the sense of the need for extraordinary measures in view of the situation currently experienced by all States and Municipalities, it is appropriate to introduce precautionary measures in order to obtain the taxes’ deferral payments, during the period in which the restrictions mentioned are in effect.

Our team is available to assist in this and other tax law issues. For further information please contact our Tax Team by the following e-mails: rmarques@zaslaw.com.br or zaslaw@zaslaw.com.br