Archive for month: January, 2025

Advisory

Limits of ITBI Exemption in the Contribution of Real Estate Capital Stock

The Brazilian Federal Supreme Court (STF) will analyze a critical issue for the real estate sector: the application of the exemption from the Real Estate Transfer Tax (ITBI) in the contribution of real estate as capital stock in companies whose main activity is the purchase, sale, or lease of real estate. The decision will directly impact the taxation and asset structuring of these companies.

Understanding the Context Article 156, §2, I of the Federal Constitution provides for ITBI exemption on transfers of assets incorporated into the equity of a legal entity for the purpose of capital contribution. However, this exemption does not apply to companies whose predominant activity is the purchase, sale, or lease of real estate.

The case under review involves a property management company contesting the collection of ITBI by the Municipality of Piracicaba (SP) on the transfer of a property used for its capital stock contribution. The São Paulo Court of Appeals (TJ-SP) upheld the charge, arguing the company falls within the constitutional exception due to its main activity.

Impacts on the Real Estate Sector The STF decision, which has general repercussion status (Topic 1,348), promises to bring legal certainty and uniformity to the application of tax exemptions. The ruling may determine whether the exemption exception should be interpreted restrictively—applying only to specific cases such as mergers, incorporations, or spin-offs—or broadly to any capital contribution.

How Can TM Associados Help? Our advisory team is ready to guide your company on the potential impacts of this decision and on the best estate and tax planning strategies.

We are closely monitoring the progress of this case and are available to provide specialized legal support.

Follow our updates and prepare to adapt your business strategy in light of changes in the legal landscape.

Contact TM Associados and ensure legal certainty for your business.

Litigation

Credit Recovery: Strategies for Companies to Prevent and Collect Debts

Maintaining your business’s financial health is essential for sustainable growth. Credit recovery is a key process to reclaim amounts owed by delinquent clients. This process can be carried out extrajudicially—through negotiations and amicable agreements—or judicially, involving the Judiciary to ensure the obligation is fulfilled.

Essential Documentation to Prevent Default Efficient management starts with organizing documents that support the business relationship. These are crucial:

• Signed contract with clear clauses;
• Invoices and delivery receipts for goods or services;
• Proof of payment (invoices, bank transfers, receipts);
• Emails and other communications with the client.

These documents are vital for both preventing default and substantiating potential claims.

Tips to Prevent Default

1. Well-drafted contracts: Include clear clauses on deadlines, payment terms, and penalties for delay.
2. Credit and collection management: Use effective tools for credit analysis and payment tracking.
3. Ongoing monitoring: Track client payment behavior to detect risk indicators.
4. Preventive billing: Send reminders before invoices are due to encourage timely payment.

How to Proceed in Case of Default?

Extrajudicial Collection (no lawsuit):

• Extrajudicial notice: Formalize the collection, showing willingness to negotiate.
• Renegotiation: Offer adjusted terms to ease payment.
• Notary protest: Formalize the debt, which may speed up payment.

Judicial Collection (with lawsuit):

• Enforcement Action:
  • Present an enforceable instrument (e.g., contract signed by two witnesses, public deed, etc.).
  • The debtor has three days to pay or comply with the obligation.
  • If not paid, the judge may order asset seizure.
• Monitory Action:
  • Used when there is written evidence without executive force.
  • The judge may issue a payment order.
  • If unpaid, it becomes an enforcement instrument.
• Ordinary Collection Action:
  • Used when there are no formal documents, but there is other evidence and witnesses.
  • The judge may order payment after reviewing the evidence.

Count on TM Associados to Recover Your Credits Our expert team is prepared to guide your company through every stage of credit recovery—from friendly negotiation to legal action. We deliver strategic, customized solutions to protect your business’s financial health.

Don’t let default threaten your company’s growth. Talk to us and learn how we can help!

Labor Ordinance No. 3,665/2023 and the Changes to Work on Sundays and Holidays

Ordinance No. 3,665/2023, published in November 2023 by the Ministry of Labor and Employment, amended Ordinance No. 671/2021, bringing significant changes to the rules governing work on Sundays and holidays. These changes impact companies in sectors such as fish, meat, fruit, and vegetable retail, as well as activities in ports, airports, roads, hotels, wholesalers, and distributors.

In light of these changes, it is necessary to revisit the regulatory framework prior to the effectiveness of the new Ordinance.

Amendment to Ordinance No. 671/2021

Before Ordinance No. 3,665/2023 came into effect, the rules on work on Sundays and holidays were based on Articles 67 to 70 of the Consolidation of Labor Laws (CLT) and on Ordinance No. 671/2021:

• Article 67 of the CLT permits work on Sundays, provided the employer ensures a paid weekly rest period (DSR) of 24 consecutive hours.
• Article 70 of the CLT prohibits work on civil and religious holidays, except if authorized by a collective convention or agreement. Work performed on these days must be compensated with double pay or with compensatory time off.

However, these legal provisions were relaxed by Ordinance No. 671/2021, which allowed direct negotiation between employers and employees to authorize work on Sundays and holidays, formalized through an employment contract.

The ordinance also permitted individual agreements to define work schedules in certain cases, and included a broad list of authorized activities, allowing many economic sectors to operate on Sundays and holidays without the need for collective bargaining.

As a result, there was greater flexibility in the trade and service sectors, which had more freedom to operate on these days, provided general labor laws were followed.

What Changed with Ordinance No. 3,665/2023?

With the new Ordinance, the rules became stricter and are now centered on collective bargaining, with a direct impact on various economic activities.

Elimination of Individual Agreements:

• Work on Sundays and holidays now depends exclusively on a Collective Bargaining Agreement (CCT) or a Collective Labor Agreement (ACT).
• Automatic permissions and individual agreements are no longer valid.

Reduction in the List of Authorized Activities:

• Sectors such as commerce and services, which previously operated freely, will now need union authorization to operate on these days.

Stricter Rules for Holidays:

• Double pay or compensatory time off must be collectively negotiated, and the conditions may vary between categories.

When Do These Changes Take Effect?

• The new rules come into force on January 1, 2025.

What Are the Practical Impacts?

For Workers:

• Greater protection of rest rights, but also increased difficulty in performing and receiving overtime.
• More active participation by unions.

For Companies:

• Increased Bureaucracy: Permission for work on Sundays and holidays must now be included in a CCT or ACT, which are usually valid for only 1 to 2 years, requiring regular renegotiations. This means the authorization will not be permanent and must be constantly reviewed and renewed.
• Operational Reorganization: Work schedules and shifts will need to be adjusted to comply with the new rules.
• Financial Impacts: Overtime payments and negotiation costs may increase the financial burden on employers.

How Can Your Company Prepare?

1. Review the Applicable CCT or ACT:
   • Ensure that your company’s activity is covered, or determine if a new negotiation will be required.
2. Engage in Dialogue with the Union:
   • Start negotiations early to avoid future issues.
3. Reorganize Work Schedules:
   • Adjust schedules to minimize operational and financial impacts.
4. Educate Your Team:
   • Inform managers and employees about the new rules.

Conclusion: Get Ready for 2025!

Ordinance No. 3,665/2023 seeks to balance workers’ rights with operational needs. However, it demands attention and planning to ensure compliance.

If you need support to interpret the new rules or to adapt your company’s operations, [click here] to receive guidance!

[1] MTE ORDINANCE No. 3,665, OF NOVEMBER 13, 2023 Amends Ordinance/MTP No. 671, of November 8, 2021. (Process No. 19964.203605/2023-95).

The MINISTER OF STATE FOR LABOR AND EMPLOYMENT, in the exercise of the powers granted by Article 87, sole paragraph, item II, of the Constitution, Article 10, sole paragraph, of Law No. 605, of January 5, 1949, and Article 154, §4, of Decree No. 10,854, of November 10, 2021, and considering the provisions of Article 6-A of Law No. 10,101 of December 19, 2000, which establishes that “work on holidays is permitted in general commercial activities, provided it is authorized by a collective bargaining agreement and in compliance with municipal legislation, as set forth in Article 30, item I, of the Constitution,” resolves:

Art. 1 Revoke sub-items 1, 2, 4, 5, 6, 17, 18, 19, 23, 25, 27 and 28, of item II – Commerce, of Annex IV, of Ordinance/MTP No. 671, of November 8, 2021.

Art. 2 Sub-item 14, of item II – Commerce, of Annex IV, of Ordinance/MTP No. 671, of November 8, 2021, shall now read: “14) open-air markets;”

Art. 3 This Ordinance shall enter into force on the date of its publication.

Tax Law

Expansion of Tax Incentives Subject to DIRBI
On December 27, 2024, the Brazilian Federal Revenue Service (RFB) published Normative Instruction RFB No. 2,241/2024, introducing significant changes to the Declaration of Tax Incentives, Waivers, Benefits, and Immunities (DIRBI). The new rule expands the list of tax incentives subject to declaration and sets new deadlines for taxpayers.

Context of IN RFB No. 2,241/2024
This regulation replaces the Single Annex of IN RFB No. 2,198/2024 and broadens the scope of incentives, waivers, and tax benefits that must be reported in the DIRBI.

The newly introduced items include incentives numbered 44 to 88, covering programs such as: cultural and artistic activity incentives, support programs for technological innovation, export benefits, research and development encouragement, special regimes for infrastructure, and tax reliefs for the agricultural sector.

Deadlines and Obligations
It is important to note that the 45 new tax incentives included in IN RFB No. 2,241/2024 must be declared retroactively. This means incentives related to the calculation periods from January to December 2024 and beyond must be reported or amended by March 20, 2025.

Impacts for Companies
This expansion aims to increase transparency and oversight of tax benefits utilized by companies across various sectors. However, it also presents new compliance challenges, requiring greater accuracy in data collection and reporting.

Failure to submit DIRBI or submitting it after the deadline will subject legal entities to the following penalties, calculated monthly or per fraction thereof, based on the gross revenue of the period:

• 0.5% on gross revenue up to R$1,000,000.00;
• 1% on gross revenue between R$1,000,000.01 and R$10,000,000.00;
• 1.5% on gross revenue above R$10,000,000.00. These fines are capped at 30% of the value of the tax benefits enjoyed.

In addition, submitting DIRBI with omissions or inaccuracies may result in a fine of 3% on the omitted, inaccurate, or incorrect amount, with a minimum of R$500.00.

How Can TM Associados Help?
Our tax team is fully prepared to assist your company in reviewing applicable tax incentives and in accurately preparing and submitting the DIRBI, ensuring full compliance with the new regulation.

For more information or to schedule a consultation, contact TM Associados and keep your company aligned with current tax obligations.

Tax Reform: New Rules and Opportunities for Your Business

On January 16, 2025, a historic milestone was reached for Brazil’s tax system with the enactment of Complementary Law No. 214/2025. This new law, which regulates the Tax Reform, introduces sweeping changes to the way taxes are calculated and collected nationwide.

What changes with the Tax Reform?
The main highlight is the creation of two new taxes: the Tax on Goods and Services (IBS) and the Social Contribution on Goods and Services (CBS). These taxes will replace existing indirect taxes such as ICMS, ISS, PIS, and Cofins, streamlining the tax system and promoting greater fairness.

Main Impacts for Companies

• Tax unification: IBS and CBS simplify the overall tax burden, reducing bureaucracy and operating costs.
• Uniform tax rates: The implementation of flat rates for all products and services facilitates corporate tax planning.
• Non-cumulativity: The non-cumulative system allows companies to offset taxes paid on goods and service acquisitions, lowering the effective tax burden.
• Gradual transition: The reform will be implemented gradually, with a transition period to allow companies to adapt.

What Can TM Associados Do for You?
In light of these changes, having expert guidance is crucial to ensure your company complies with the new rules and seizes the opportunities arising from the reform. TM Associados offers a comprehensive range of services to assist clients through this process, including:

• Impact analysis: We identify key changes and opportunities for tax optimization.
• Tax planning: We develop tailored strategies to reduce tax burdens and optimize cash flow.
• System implementation: We support the adaptation of your accounting and tax systems to the new rules.
• Administrative proceedings: We represent your interests in administrative and judicial matters related to the tax reform.

Contact us today to schedule a personalized consultation.

Sincerely,
TM Associados Team