Brazil Launches Tax Debt Incentive Program

July 23, 2015 Taxation in Brazil

BRASILIA – Brazil will be offering companies the opportunity to pay off tax debts by trading in current tax credits.

On Jul 22nd the government of Brazil announced a new program allowing business to reduce their tax debts through tax credits.

Businesses which have outstanding tax debt will now have until September 30th to join a program whereby tax credits related to non-operating losses can be used to reduce taxes owed, instead of being cashed in.

The tax credits can be used to pay up to a maximum of 57 percent of the tax debt, with the remainder to be paid in cash.

It is currently estimated that as many as 29 000 companies will be eligible to take part in the program, potentially using up as much as BRL 860 billion in tax write credits.

The new measure is intended to help the government to boost tax revenues and simultaneously cut the budget deficit.

Photo By: Jorge Brazil