On the March 16th, 2017, the Brazilian Federal Revenue (RFB) published the Normative Instruction 1,700, which consolidated (revoked) nine Normative Instructions (NI).

The main innovation of such NI was the joint treatment of IRPJ and CSLL. The NI SRF #46/1989 (which provided the IRPJ and CSLL calculation basis) and NI SRF #390/04 (which exclusively provided rules to CSLL) were revoked and these taxes’ regulations were consolidated by NI RFB 1700/17. In addition, Appendix I and II mention the add-backs and exclusions for the purposes of Taxable Income calculation basis.

Another change introduced by NI RFB #1,700 was the Appendix III, which provides for annual depreciation rates, previously regulated by IN SRF #162/98, also revoked.

According to the information published on RFB’ website, the objective was to concentrate the matters’ regulation and, consequently, to become less sparse the ordinary regulations related to the taxation on corporate entities.

RFB further clarified that the issuance of a single administrative provision on IRPJ and CSLL facilitates the survey and application of tax legislation, implies transparency of the Tax Administration's understanding, provides legal certainty in the application of IRPJ and CSLL rules, reduces litigation and improves the relation between taxpayer and tax authorities.

The intention of RFB was to overcome the concerns related the differences between the IRPJ and CSLL calculation basis. Nonetheless, special attention should be given to the issues already discussed and decided in administrative and judicial levels, in order to assess their effects.

 

For more information, contact us: 

 

Marcelo Sampaio  - [email protected]
Partner - Head of Tax