{"id":150710,"date":"2026-10-12T11:27:52","date_gmt":"2026-10-12T11:27:52","guid":{"rendered":"https:\/\/www.legal500.com\/guides\/?post_type=comparative_guide&#038;p=150710"},"modified":"2026-10-12T12:25:43","modified_gmt":"2026-10-12T12:25:43","slug":"brazil-tax-disputes","status":"publish","type":"comparative_guide","link":"https:\/\/www.legal500.com\/guides\/chapter\/brazil-tax-disputes\/","title":{"rendered":"Brazil: Tax Disputes"},"content":{"rendered":"","protected":false},"template":"","class_list":["post-150710","comparative_guide","type-comparative_guide","status-publish","hentry","guides-tax-disputes","jurisdictions-brazil"],"acf":[],"appp":{"post_list":{"below_title":"<div class=\"guide-author-details\"><span class=\"guide-author\">Souza Okawa Advogados<\/span><span class=\"guide-author-logo\"><img src=\"https:\/\/www.legal500.com\/guides\/wp-content\/uploads\/sites\/1\/2025\/09\/souza-logo.jpg\"\/><\/span><\/div>"},"post_detail":{"above_title":"<div class=\"guide-author-details\"><span class=\"guide-author\">Souza Okawa Advogados<\/span><span class=\"guide-author-logo\"><img src=\"https:\/\/www.legal500.com\/guides\/wp-content\/uploads\/sites\/1\/2025\/09\/souza-logo.jpg\"\/><\/span><\/div>","below_title":"<span class=\"guide-intro\">This country specific Q&amp;A provides an overview of Tax Disputes laws and regulations applicable in Brazil<\/span><div class=\"guide-content\"><div class=\"filter\">\r\n\r\n\t\t\t\t<input type=\"text\" placeholder=\"Search questions and answers...\" class=\"filter-container__search-field\">\r\n\t\t\t<\/div>\r\n\r\n\t\t\t\r\n\r\n\r\n\t\t\t<ol class=\"custom-counter\">\r\n\r\n\t\t\t\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is it necessary for a taxpayer to register with the tax authority? Are separate registrations required for corporate income tax and value added tax\/sales tax?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>For consumption taxes, it is necessary to obtain (<strong>i<\/strong>) state registration for taxpayers of the Tax on Operations relating to the Circulation of Goods and on Interstate and Intermunicipal Transportation and Communication Services (ICMS); and (<strong>ii<\/strong>) Municipal Tax Registration for taxpayers of the Tax on Services (ISS). For the new consumption taxes, the Contribution on Goods and Services (CBS) and the Tax on Goods and Services (IBS), introduced by the Tax Reform (Constitutional Amendment No. 132\/2023 and Complementary Law No. 214\/2025), registration is made in a single taxpayer registry which, for legal entities, is the National Register of Legal Entities (CNPJ), shared among all federated entities.<\/p>\n<p>With regard to income taxation, it is necessary to choose the regime appropriate to the activity and level of income.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">In general terms, when a taxpayer files a tax return, does the tax authority check it and issue a tax assessment, or is there a self-assessment system where the taxpayer\u2019s own assessment stands unless the tax authority intervenes?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>In the Brazilian tax system, the general rule is self-assessment (assessment by approval), but there are exceptions in which the authority makes the assessment ex officio. Self-assessment is subject to approval by the tax authority for a period of 5 years. If there are no questions during this period, tacit approval occurs.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Can a taxpayer amend their return after it has been filed? If so, are there any time limits for doing so?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes, taxpayers are allowed to amend their returns for the last 5 years. However, the amendment of the return on the taxpayer&#8217;s own initiative, when aimed at reducing or excluding tax, is only admissible upon proof of the error on which it is based, and before the assessment is notified. In practical terms, amendments are allowed before notification of the official assessment or the start of tax proceedings.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Please summarise the main methods by which a tax authority may challenge the amount of tax a taxpayer has paid by way of an initial assessment\/self-assessment. Does the tax authority need any justification to commence such a challenge?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Once the taxpayer has made a self-assessment, the tax authorities have five years to approve or question it. If there are discrepancies between the tax authorities&#8217; understanding and what was declared by the taxpayer, an audit procedure is usually initiated to obtain further information and any clarifications. If, in the end, the tax authorities consider that the information provided by the taxpayer is not adequate, they may supplement the assessment by issuing a tax assessment notice. For example, the tax authorities may issue a tax assessment notice if they identify: omission of income or undeclared transactions; calculation errors in the calculation basis, rates, or deductions; improper offsets or credits (e.g., PIS\/COFINS credits without backing).<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the time limits for a tax authority to commence a challenge to the taxpayer\u2019s assessment\/self-assessment (disregarding any override of these limits to comply with obligations to provide relief from double taxation under a tax treaty)? Does a tax authority have any options to challenge a self-assessment after expiry of the relevant time limit?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>In Brazil, the deadlines for the tax authority to question the amount of tax paid by the taxpayer\u2014whether in self-assessment or ex officio assessment\u2014are defined mainly in Articles 150, \u00a74, and 173 of the CTN, with complementary rules in the specific legislation for each tax. The deadline is five years. For taxes subject to assessment by ratification, this period begins on the date of the triggering event. In the case of ex officio assessment, the period is counted from the first day of the fiscal year following the one in which the assessment could have been made.<\/p>\n<p>The tax authorities usually argue that, in the absence of proper assessment by the taxpayer, the supplement is made ex officio, which would defer the counting of the period to the first day of the year following the occurrence of the triggering event.<\/p>\n<p>In the opinion of the STJ, this understanding only prevails when the taxpayer fails to make any advance payment \u00a0in the period assessed. If there is only a partial payment, the five-year rule from the occurrence of the triggering event continues to apply.<\/p>\n<p>Complementary Law No. 236\/2026 codified these rules in the CTN (Article 150, \u00a7\u00a75 and 6). In cases of willful misconduct, fraud, or simulation, the period follows the rule of Article 173, I, of the CTN and is counted from the first day of the fiscal year following the one in which the assessment could have been made. Where there is partial payment of a tax subject to assessment by ratification, the five-year period continues to be counted from the occurrence of the triggering event.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How is tax fraud defined under the laws of your jurisdiction?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Fraud is any intentional act or omission intended to prevent or delay, in whole or in part, the occurrence of the triggering event for the main tax obligation, or to exclude or modify its essential characteristics, in order to reduce the amount of tax due, avoid or defer its payment.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How is tax fraud treated? Will the tax authority conduct a criminal investigation with a view to seeking prosecution and a custodial sentence?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>In Brazil, <strong>tax fraud <\/strong>can lead to <strong>two <\/strong>different <strong>courses of action<\/strong>, which often occur in sequence: <strong>administrative tax proceedings <\/strong>and <strong>criminal proceedings<\/strong>. The former is conducted by the tax authority; the latter by the Public Prosecutor&#8217;s Office based on a police investigation. If there is evidence of fraud involving a crime against the tax system, the authority must refer the case to the Public Prosecutor&#8217;s Office for criminal prosecution. As a rule, payment of the tax extinguishes criminal liability. However, Complementary Law No. 225\/2026 (Taxpayer Defense Code) removed this ground for extinguishing criminal liability for agents declared habitual debtors (<em>devedores contumazes<\/em>) in a final administrative decision, including with respect to acts committed while they held that status.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Does the tax authority have to abide by any standards or a code of conduct when carrying out audits? Does the tax authority publish any details of how it conducts audits in practice?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes, the tax authority is subject to various principles, such as legality, impartiality, morality, publicity, and efficiency. Under Complementary Law No. 225\/2026, there is now a code of conduct binding on all federated entities. It requires the tax administration, among other duties, to presume the taxpayer&#8217;s good faith, to act in accordance with ethical standards of probity and decorum, and to state the grounds for its acts. It also ensures taxpayers, among other rights, the right to identify the tax officials, to be assisted by counsel during audits, and not to provide documents already submitted to or accessible by the tax authorities. In addition, Complementary Law No. 236\/2026 amended the CTN to require that every audit be preceded by a document identifying the responsible authorities, the scope, the period under review, the documents requested, and the duration of the procedure. Audit procedures and their respective assessments are not public acts. Despite this, there has been significant progress in the disclosure of administrative decisions, individual tax benefits, and tax authority understandings expressed in response to consultations, which are complementary rules for the purposes of applying tax legislation.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Does the tax authority have the power to compel the production of information? Does this extend to emails? Is there a right of appeal against the use of such a power?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes, the tax authority has the power to compulsorily request information related to tax obligations under supervision. The content of emails is protected by the confidentiality of communications, and access to them is only possible with judicial authorization.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Does the tax authority have the power to compel the production of information from third parties? Is there a right of appeal against the use of such a power?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes, the law establishes that notaries, public servants, financial institutions, asset managers, brokers, auctioneers, dispatchers, inventory takers, trustees, commissioners, liquidators, and any other entities or persons designated by law have the duty to provide the administrative authority with all information they have regarding the assets, businesses, or activities of third parties.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is it possible to settle an audit by way of a binding agreement, i.e. without litigation?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The formal closure of an audit through a binding agreement is not yet common practice in Brazilian tax culture. Despite this, there are recent instruments developed especially within the scope of the Brazilian Federal Revenue Service that are moving towards allowing negotiated solutions for potential disagreements regarding the application of tax rules before the definitive establishment of tax credits.<\/p>\n<p>In this regard, Complementary Law No. 225\/2026 established the Federal Revenue Service&#8217;s Cooperative Compliance Program (Confia), aimed at a collaborative relationship between large taxpayers and the Federal Revenue Service, with a focus on preventing litigation. The program provides for dialogue processes for the voluntary disclosure of relevant transactions, prior to the commencement of a tax audit, and for compliance monitoring. If a disagreement remains following disclosure, the assessment is issued without an ex officio penalty. The same law requires the tax administration to prioritize the cooperative resolution of disputes. In addition, Complementary Law No. 236\/2026 introduced into the CTN mediation and special tax and customs arbitration, the latter with a binding award having the same effects as a court decision, both still dependent on specific legislation.<\/p>\n<p>In addition, there are programs to settle disputes before both the Revenue Service and the Attorney General&#8217;s Office through Tax Transactions.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">If a taxpayer is concerned about how they are being treated, or the speed at which an audit is being conducted, do they have any remedies?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes, taxpayers who are dissatisfied with the conduct of an audit or its duration may file an administrative complaint with the ombudsman of the tax authority to which they are linked. If the expected result is not achieved and the illegality persists, taxpayers may resort to the Judiciary.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">If a taxpayer disagrees with a tax assessment, do they have a right of appeal?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes, taxpayers are guaranteed the right to defense, which can be exercised both administratively and judicially, with the guarantee of adversarial proceedings, full defense, and due process of law.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is the right of appeal to an administrative body (independent or otherwise) or to a judicial body (i.e. a tribunal or court)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The analysis of challenges and administrative appeals depends on the structure of the tax administration body responsible for the assessment. As a rule, the challenge is reviewed, in the first instance, by a tax auditor appointed to act in the Judgment Office. The judgment of appeals is assigned to a collegiate body, usually joint, composed of representatives of the Public Treasury and taxpayers (at the federal level, the CARF), which tends to confer greater impartiality and legitimacy on decisions. With the Tax Reform, the CBS follows the federal procedure before the CARF. For the IBS, Complementary Law No. 227\/2026 provides for three levels of adjudication within the IBS Management Committee (CGIBS): first instance, appellate, and superior, the latter aimed at standardizing case law. The National Chamber for the Integration of IBS and CBS Administrative Litigation was also created to hear special appeals against decisions of the CGIBS or the CARF that interpret the legislation common to both taxes divergently, with decisions binding on both.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is the hearing in public? Is the decision published? What other information about the appeal can be accessed by a third party\/the public?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>First instance decisions, as a rule, are not made public, since the proceedings take place predominantly in writing and electronically, without face-to-face sessions with the participation of the parties.<\/p>\n<p>The opposite is true for appeals heard by collegiate bodies, whose sessions are usually public.<\/p>\n<p>Administrative decisions are published in official gazettes or in the electronic systems of the respective federal entity, which ensures the transparency of the judgments.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is the procedure mainly written or a combination of written and oral?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Defenses and appeals are submitted in writing, via petition. Decisions are also written. However, it is possible to submit briefs, orders, and oral arguments before the courts.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is there a document discovery process?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>As a rule, taxpayers must support their defense with documents that they believe prove their rights. The tax authorities may convert the trial into an investigation if they deem technical clarifications to be necessary.<\/p>\n<p>Under the general rules on administrative tax proceedings introduced into the CTN by Complementary Law No. 236\/2026, documentary evidence must, as a rule, be submitted together with the defense. Later submission is restricted to specific cases, such as unforeseeable circumstances or force majeure, supervening facts, or rebuttal of arguments raised subsequently.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are witnesses called to give evidence?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The participation of witnesses in tax cases is not common in Brazil.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Does the burden of proof rest with the taxpayer on an appeal against an assessment?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>This issue still raises numerous discussions. As a rule, in ex officio assessments, the burden of proving the occurrence of the triggering event lies with the tax authority, while the taxpayer must prove the facts that reduce or extinguish the tax credit. With the reinstatement of the casting vote within the Administrative Council of Tax Appeals, collegiate decisions that end in a tie are decided by the vote of the President of the Judging Panel, who is always a representative of the tax authorities. In practice, the doubt ends up prevailing in favor of the treasury. When a tie is resolved in favor of the treasury by the casting vote, however, penalties are excluded and the criminal tax referral is cancelled (Decree No. 70,235\/1972, Article 25, \u00a79-A). The constitutionality of the casting vote remains under challenge before the Federal Supreme Court.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How long does an appeal usually take to conclude?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>It depends on the Federated Unit. Within the scope of the Administrative Council of Tax Appeals, cases currently take an average of three years (1,078 days) to be judged in the Ordinary Chamber and 290 days in the Superior Chamber, against a statutory period of 360 days. The Council&#8217;s case inventory fell to R$ 757 billion at the end of 2025.<\/p>\n<p>With the implementation of IARA (Artificial Intelligence in Administrative Appeals), a tool supporting the case-law research of the Council members, formally established in March 2026 and initially made available to a pilot group, the total processing time for an administrative case at the federal level is expected to be reduced to two years.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Does the taxpayer have to pay the assessment pending the outcome of the appeal?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>No, the enforceability of the tax credit remains suspended while pending a final judgment in the administrative sphere, according to Article 151, III of the CTN.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there any restrictions on who may conduct or appear in the appeal on behalf of the taxpayer?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>In the administrative sphere, taxpayers may be represented by their lawyer, accountant, or other legal representative of the company, provided they have powers granted by the articles of association or power of attorney. However, it is recommended that representation be provided by a lawyer, especially in appeals.<\/p>\n<p>Current public servants should not represent taxpayers. Similarly, it is not recommended that current members of the administrative court do so.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is there a cost-shifting system whereby the losing party pays the winning party\u2019s legal and professional costs of an appeal?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>In administrative proceedings, there is no imposition of costs on the losing party, which is restricted to certain legal actions.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is it possible to use alternative forms of dispute resolution, such as voluntary mediation or binding arbitration? Are there any restrictions on when such alternative forms of dispute resolution may be pursued?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Currently, the tool that most closely resembles a consensus-building technique in Brazil is the tax settlement. Confia, established by Complementary Law No. 225\/2026, also seeks consensus-building techniques before litigation arises. The same law requires the tax administration to prioritize the cooperative resolution of disputes, either preventively or at any stage of administrative or judicial proceedings. Complementary Law No. 236\/2026 introduced into the CTN mediation and special tax and customs arbitration, both still dependent on specific legislation. Mediation will be conducted by a third party without decision-making power, and compliance with the agreement extinguishes the tax credit. Arbitration will result in a binding award, with the same effects as a court decision, and may cover disputes at the administrative or judicial stage. The commencement of arbitration suspends the enforceability of the tax credit and interrupts the statute of limitations, but, where a tax foreclosure is already underway, suspension requires full security.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is there a right of onward appeal? If so, what are the levels of onward appeal before the case reaches the highest appellate court?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Generally, the administrative process includes a first-instance defense and two appeal courts (ordinary and special). In the Judiciary, there are the First and Second Instances, in addition to the exceptional instances (special and extraordinary), the Superior Court of Justice, and the Federal Supreme Court.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the main penalties that can be applied when additional tax is charged? What are the minimum and maximum penalties?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The amounts vary according to the nature of the infraction, whether there is fraud, tax evasion, omission of declarations, among other aspects. Fines also vary according to each federated entity. Complementary Law No. 236\/2026 introduced general limits into the CTN: penalties must observe reasonableness and proportionality and may not exceed 75% of the tax assessed or of the affected credit, 100% in cases of willful fraud, tax evasion, or collusion, and 150% in cases of recidivism. These limits do not apply to standalone fines unrelated to the amount of the tax credit. The Federal Supreme Court had already limited the qualified fine to 100% (150% in cases of recidivism), as higher fines are considered confiscatory.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">If penalties can be mitigated, what factors are taken into account?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The mitigation of the penalty will also vary depending on the federated entity. Generally, elements such as the taxpayer&#8217;s history and the existence or not of tax payable as a result of the penalized infraction are taken into account. There is also usually mitigation of the penalty in cases of spontaneous payment within a certain period, accompanied by confession of the debt and waiver of the right to challenge it in court. Complementary Law No. 236\/2026 introduced into the CTN mitigating factors that are mandatory for all federated entities, such as a clean compliance record, absence of loss to the treasury, excusable error, and pending judgment of the matter in a binding precedent, as well as greater reductions for participants in compliance programs. However, no reduction is permitted for habitual debtors.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Within your jurisdiction, what areas do you think are most likely to be subject to challenge over the next 12 months?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>In Brazil, both the Federal Revenue Service and the state and municipal finance departments have focused their enforcement efforts on areas and operations that present a higher risk of evasion or legal controversy. This is reflected in the annual enforcement plans published by the Federal Revenue Service and in recurring sectoral operations.<\/p>\n<p>Within the Union, the Federal Revenue Service publishes the Annual Inspection Report, which in 2026 presented the results for 2025 and the planning for 2026, providing data, actions, and priorities. In 2025, ex officio assessments totaled approximately R$ 233 billion, mainly relating to corporate income tax (IRPJ, 44.2%), CSLL (16.9%), and Cofins (15.5%).<\/p>\n<p>For 2026, the main priority is the implementation of the Consumption Tax Reform (CBS, IBS, and IS), including the monitoring of PIS\/Cofins credit balances used to offset the CBS during the transition, and the liability of digital platforms for intermediated transactions.Other enforcement priorities include the taxation of the &#8220;Thesis of the Century,&#8221; the misuse of tax losses and negative CSLL tax bases, the improper appropriation of PIS\/Cofins credits, and the misuse of such balances to offset the CBS. The list also includes JCP, fixed-odds betting, improper adherence to Perse, the Lei do Bem, short-term rentals through digital platforms, undeclared foreign accounts, Simples Nacional, and CPRB requirements.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">In your opinion, are there any areas that taxpayers are currently finding particularly difficult to deal with when faced with a challenge by the tax authorities?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Several areas and issues, such as: Transfer pricing and international transactions; Tax planning and goodwill; ICMS \u2013 Tax substitution and tax benefits.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\r\n<div class=\"word-count-hidden\" style=\"display:none;\">Estimated word count: <span class=\"word-count\">3468<\/span><\/div>\r\n\r\n\t\t\t<\/ol>\r\n\r\n<script type=\"text\/javascript\" src=\"\/wp-content\/themes\/twentyseventeen\/src\/jquery\/components\/filter-guides.js\" async><\/script><\/div>"}},"_links":{"self":[{"href":"https:\/\/www.legal500.com\/guides\/wp-json\/wp\/v2\/comparative_guide\/150710","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.legal500.com\/guides\/wp-json\/wp\/v2\/comparative_guide"}],"about":[{"href":"https:\/\/www.legal500.com\/guides\/wp-json\/wp\/v2\/types\/comparative_guide"}],"wp:attachment":[{"href":"https:\/\/www.legal500.com\/guides\/wp-json\/wp\/v2\/media?parent=150710"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}