On December 13 2013 the Internal Revenue Service published Ordinance 1,793/2013, which lays out new criteria for monitoring high-value corporate taxpayers. The goal is to increase tax compliance and tax revenue. The corporate tax monitoring programme
covers the following taxes:
l income tax;
l the social contribution on net income;
l federal excise tax;
l withholding tax;
l financial transactions tax;
l social security taxes;
l the Programme for Social Integration contribution;
l the contribution for the financing of social security; and
l the contribution for intervention in the economic domain.
If the authorities become aware of inconsistencies in taxpayer information or suspect tax evasion, the taxpayer will become a priority for a field audit.
Differentiated tax monitoring includes a periodic review of the revenue collected from the taxpayer, taking into account macroeconomic variables that may affect its business.
The taxpayer may be subject to differentiated tax monitoring where:
l the 2012 annual gross income was more than R135 million;
l the 2012 tax payments reported as federal tax declarations were more than R14 million;
l the 2012 payroll was more than R24 million; or
l the 2012 social security and severance payment fund payments were more than R8
Furthermore, special tax monitoring seeks to expedite the collection of disputed tax for large corporate taxpayers. The taxpayer may be subject to special tax monitoring where:
l the 2012 annual gross income was more than R560 million;
l the 2012 tax payment was more than R56 million;
l the 2012 payroll was more than R84 million; or
l the 2012 social security and severance payment fund payments were more than R28 million.
The taxpayers subject to these proceedings will be audited by specialised teams formed for this purpose. Companies should be prepared to submit any complementary information in order to justify any inconsistencies and prevent future assessments.
For further information on this topic please contact Lucas Kurtz, Ricardo Ciconelo or
Guilherme Barranco at Manhães Moreira e Ciconelo Sociedade de Advogados by telephone (+55 11 3145 9555) or email (firstname.lastname@example.org, email@example.com or firstname.lastname@example.org). The Manhães Moreira e Ciconelo Sociedade de Advogados website can be accessed at www.mmaalaw.com.