Some 738,000 Delinquent Small-scale Businesses Notified to Settle Tax Debts

RIO DE JANEIRO, BRAZIL – Around 738,000 micro and small-scale defaulting companies under the ‘Simples Nacional’ – a special tax system for small businesses – began to be notified in order to rectify their situation.

After the notification is given, taxpayers have up to 30 days to contest the notification or settle the debts, under penalty of being excluded from the ‘Simples’ tax regime on January 1st, 2020.

In all, 738,605 companies have been notified, accounting for debts totaling R$21.5 billion (US$5.37 billion). The settlement procedure must be carried out through the Taxpayer Virtual Service Center of the Federal Treasury (e-CAC), requiring a digital certificate or access code.

Debtors may pay in cash, write off part of the debt with tax credits (funds that the company is entitled to receive from the tax authorities) or pay the debts in installments within five years plus interest and fines.

Should the settlement occur within the deadline, taxpayers will be entitled to remain in the ‘Simples Nacional’ next year. According to the Federal Treasury, the main irregularities are missing documents, excess invoicing, tax debts, pending installments or the exercise by the company of activities that are not included in the ‘Simples Nacional’.

Periodically, the Treasury checks if companies are in agreement with the framework conditions on the ‘Simples Nacional’. When conditions are not met, the body sends letters with the exclusion warning.

Micro and small-scale entrepreneurs that have received the notice may request guidance from the Brazilian Support Service to Micro and Small-scale Companies (SEBRAE), to draw up a recovery plan for the business.

Source: Agência Brasil

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