On 16 December 2023, the House of Representatives approved the bill of the Tax Reform, based on PEC 45 (Constitutional Amendment Bill), in the final round after the Senate’s approval.
The final wording was published on 21 December 2023 (Constitutional Amendment No 132/23).
See below a summary of the matters that were included by the Senate, but were excluded by the House of Representatives from the final version approved:
“Sin Tax” (IS) and CIDE: Suppresses the creation of the CIDE and maintains the IPI to guarantee the competitiveness of the ZFM (Manaus Free Tax Zone). IS no longer has an exclusive extra-fiscal (non-collective) attribute.
Federative Council: Eliminates the need for approval by the president of the Federal Senate.
Distribution of IBS: Suppresses the period for measuring collection for IBS distribution, which would be between 2024 and 2028, leaving the topic to be defined by Supplementary Law.
ZFM Benefits: Removes benefits when importing petroleum derivatives into the ZFM.
Differentiated regimes: Reduces the sectors with reduced rates to 18 and the sectors with differentiated regimes to 6. Specifically, sanitation and roads concession services are no longer included in this list; air transport services; operations that involve the provision of the shared structure of telecommunications services, goods and services that promote the circular economy; operations with microgeneration and distributed minigeneration of electrical energy. Furthermore, it suppresses the device that creates the extended basic meal basket and the exemption of medicine for public administration.
Economic studies: Eliminates the need to publish studies and opinions with economic and financial impact for tax changes.
Regulation: Suppresses the institution of IBS and CBS by the same Complementary Law.
Hydrogen: Exchange “green” for “low carbon emissions” for the purpose of differentiated treatment.
The next step is the discussion of the Supplementary Laws with the practical details of the new system, which should be done by the Congress in the first semester of 2024. The Executive Power must also send, within 90 days, bills of Law related to the reforms of the income tax taxation and payroll taxation.
In more detail
See below the infographic regarding the complete wording of the PEC 45 prepared by our Tax team on the subject.
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Trench Rossi Watanabe and Baker McKenzie have executed a strategic cooperation agreement for consulting on foreign law.
Maria Rita Ferragut joined the Firm in 2019. With 25 years of experience, she is the lead partner of the Tax Law group, acting with a focus on Tax Litigation, at the federal, state and municipal levels. *Trench Rossi Watanabe and Baker McKenzie have executed a strategic cooperation agreement for consulting on foreign law.
Maria Fernanda Furtado joined the Firm in 1996 and became a partner in 2006, leading the tax practice at the Rio de Janeiro office ever since. Acting on the oil and gas, mining and infrastructure industries, Maria Fernanda has a wide breadth of experience in international taxation, mergers and acquisitions and indirect taxes. Among her clients, we highlight Chevron, Queiroz Galvão, Fugro, EDF Renewables, Petrobras, Transocean, Seadrill, Schlumberger and Total Eren. *Trench Rossi Watanabe and Baker McKenzie have executed a strategic cooperation agreement for consulting on foreign law.
Clarissa Giannetti Machado Miras joined the Firm in 1999 and became partner in 2007 .
She is the Head of the tax practice group in Brazil and the Head of the Pro-Bono Committee, being a member of the Social Responsibility team of the firm. Her focus is tax consulting on corporate income and other federal taxes. Clarissa has extensive experience in the elaboration and analysis of global transfer pricing analysis and its effects vis-à- vis the local legislation. Clarissa has a wide breadth of experience in the assistance of clients for the development of efficient structures in M&A transactions, local and international restructurings, real estate and financing transactions. She also advises individuals on wealth management matters. *Trench Rossi Watanabe and Baker McKenzie have executed a strategic cooperation agreement for consulting on foreign law.
Partner of Trench Rossi Watanabe since 2002, Simone Dias Musa is a lawyer specialized in tax law, consulting, follow-up on tax inspections and administrative proceedings, focusing on international taxation, transfer pricing, taxation applicable to acquisitions, associations and corporate restructuring and Brazilian investments abroad. She advises local and multinational clients on tax structures for acquisitions and joint ventures involving Brazilian companies and advising contractors and owners on transfer pricing involving construction projects in Brazil, including turnkey projects.
Holding the position of managing partner of the firm for three terms, Simone has participated in several projects involving the areas of client development, communication, marketing and human resources, including restructuring of the partners’ compensation system, modernization and optimization of the physical space, and creation of a remote and flexible work policy.
She is currently one of the leaders of the Corporate Social Responsibility Committee and an intense promoter of projects related to gender equity in the firm, especially those involving female leadership and the inclusion of minorities. Simone is also one of the leaders of the project for the inclusion of black students in the legal profession – Incluir Direito, of CESA – Center for Studies of Law Firms, where she is a member of the Board of Directors for the term 2021 – 2024. *Trench Rossi Watanabe and Baker McKenzie have executed a strategic cooperation agreement for consulting on foreign law.
Adriana Stamato leads the group of indirect taxes, working with in consulting and litigation matters. She has extensive experience in assisting clients in corporate reorganizations, tax planning, risk assessment, tax inspections, modeling of new businesses, obtaining special regimes, among others. Adriana also has extensive experience in analyzing the different tax regimes applicable to each sector, having assisted clients in selecting the best business model for implementing structures in Brazil. She represents customers in the automotive, technology, energy, food, pharmaceutical, chemical, hygiene and cosmetics, retail, agribusiness and services, etc.
*Trench Rossi Watanabe and Baker McKenzie have executed a strategic cooperation agreement for consulting on foreign law.
Thales M. Stucky joined the Firm in 2004 and became partner in 2015. He integrates the Tax Planning & Controversies practice group, with focus on tax litigation (judicial and administrative), as well as tax planning in general for Brazilian and foreign companies. Thales has a wide experience in tax issues related to the automotive and IT industries. *Trench Rossi Watanabe and Baker McKenzie have executed a strategic cooperation agreement for consulting on foreign law
Paulo Roberto Gomes de Carvalho joined the Firm in 2010. He integrates the tax practice group, with focus on taxation upon compensation. Mr. Paulo Carvalho has a wide breadth of experience in the social security contributions income tax, strategic compensation, stock plans, expatriations and private pension. *Trench Rossi Watanabe and Baker McKenzie have executed a strategic cooperation agreement for consulting on foreign law.
