In response to the great expectation of taxpayers on the topic, the Brazilian Federal Revenue Service (RFB) and the Attorney General of the Brazilian Treasury (PGFN) issued, on May 3, 2022, Notice 09/22, which deals with the settlement of tax debts arising from tax amortization of goodwill under the legal regime prior to the Law 12,973/14.

This is a settlement in tax litigation of a material and widespread legal controversy. Debts under administrative or judicial discussion, registered or not as outstanding debt, involving legal controversies resulting from:

• Tax use of goodwill amortization expenses resulting from the acquisition of an ownership interest, limited to merger, consolidation, and spin-off transactions that took place by December 31, 2017, whose ownership interest was acquired by December 31, 2014; and
• Addition of the respective goodwill amortization expenses in the determination of the Social Contribution on Net Income (CSLL) calculation basis.

Taxpayers that opt for settlement must indicate all the debts related to the same legal controversy, in addition to:

• Presenting irrevocable and irreversible admission of debts, withdrawing from administrative or judicial litigation; and
• Waiving claims of the rights on which the litigation is based.

Adhesion may be formalized between May 2, 2022, and July 29, 2022, by 7 pm, through the portal e-CAC, if the debt is linked to the RFB, or through the portal Regularize if the debt is linked to the PGFN.

The taxpayer must expressly consent to the sending of communications and summonses to its electronic tax domicile, since all summonses will be served electronically.

The payment can be made within up to five years, applying the Selic rate for adjustment for inflation of the installments. The discounts granted will be applied over the principal, fine, interest, and charges, calculated on a regressive basis, depending on the number of installments.

Initially, it is necessary to pay 5% of the tax debt without reductions, which can be divided into five successive monthly installments. The discount percentages will be applied to the remaining balance due, according to the number of installments chosen, after total settlement of the down payment, as shown in the table below:

In cases of deposits linked to the debt subject to the transaction, adherence to the transaction will result in automatic conversion of the deposits into income in favor of the Federal Government. Thus, the discounts provided above will be applied only to the remaining balance.

Moreover, adhesion to the settlement does not entail release of the encumbrances resulting from the pledging of assets, tax preventive measures, and collateral presented administratively or judicially. This collateral can only be withdrawn when the settlement agreement has been fully discharged and provided that there are no other debts registered as Outstanding Federal Debt (DAU).

Among the obligations that must be fulfilled by the taxpayer are the following:

• Be subject to the understanding given by the tax authorities in relation to the theory that is at issue in the settlement, including in relation to future taxable events or those not yet consummated;
• Maintain good tax standing with the FGTS; and
• Bring into good standing all debts that may be entered in the DAU or that become due after the formalization of the settlement agreement within 90 days from the date of entry.

The public notice also establishes the scenarios for terminating the settlement, such as not paying in full the down payment, failing to pay three consecutive or six alternating installments, and failing to pay two installments, with the others paid.

Termination will entail, among other measures, resumption of the collection of debts, with authorization to foreclose on the collateral presented. The taxpayer will be prohibited from entering into any settlement for a period of two years, even if related to different debts.

Before adhesion, it is recommended that one analyze the company's situation individually, not only to consider the peculiarities of the concrete case, but also the global effects of the strategy, evaluating the impacts on the discussion of goodwill itself in the legal regime prior to Law 12,973/14.