Measures to mitigate fiscal risks
It is certain that the Brazilian tax system imposes on the companies a very high compliance cost and, due to its complexity and lack of clarity, often leads to the decline (or even preclude) the opening of new companies on national territory.
Not only the high complexity of the current rules and costs incurred, the tax burden is also high and, the fines for not complying with the principal (the payment of the tax itself) or ancillary (submission of tax returns) obligations, expose the taxpayer to the risk of collecting high amounts, mostly often higher than the tax itself.
Thus, it is very important for managers and shareholders to mitigate company’s tax risks, both for the financial health of the company and for the security of its own assets, since the consideration of companies’ officers as tax liable is a relatively common measure (illegal, most of the time), to pressure or catalyze the payment of tax obligations not carried out by the legal entity.
In this regard, it is important to highlight that the Tax Authorities seeks, indiscriminately, the responsibility of executives and managers for tax debts originated in legal entities and, although such liability often does not have legal grounds, the Brazilian Courts – in an imprecise and perfunctory manner – have been accepted the claim of the Tax Authorities.
Constant training of teams involved in tax compliance
The proper instruction of employees responsible for compliance with tax obligations may reduce the risk of actions resulting from errors of usual procedures.
The training of the responsible ones for tax activities is necessary so that they can comply properly and with very carefully tax obligations.
Constant monitoring of tax legislation updates
It is important for the company to follow up periodically with the tax rules that are applicable to its operations, considering that any alteration (increase of tax rate, form of payment, collecting terms, etc.) not observed by the company may result in tax fines verified in inspection.
Internal audits to identify possible procedural errors so that, in case of occurrence, there is sufficient time for correction and eventual voluntary disclosure
The performance of internal audits is extremely relevant to identify previously possible failures in compliance with tax obligations, whether due to errors in the delivery of ancillary obligations or misconception in the application of a certain tax rules that give rise to tax deficiency.
With the identification of the error before a possible tax inspection, the company has the possibility to correct not only the procedure but also to rectify the ancillary obligations transmitted in a wrong manner, without the payment of a fine and collect eventually tax not paid, through the institute of spontaneous announcement.
It is important to mention that such audits can also identify procedures that were causing undue collection or tax unduly paid, so from this finding the company can recover the amounts unduly paid and correct the procedure.
In the case of Inspection, always evaluate the presentation of the documentation requested by the Tax Administration as well as the forms of presentation of the information to avoid the drafting of a tax assessment notice
If the company is notified in the beginning of inspection, it is important that the presentation of the documents and information requested by the Tax Administration be always careful analyzed.
Whenever possible it is recommended that the company consult lawyers specialized in Tax Law in order to attend correctly the requested by inspection.
The reception desk staff of the company should be alert to the arrival of any type of tax official document to prompt fulfill it
It is relevant to inform and train the employees and receptionists responsible for the company’s reception to promptly direct fiscal documents to the competent sector, as well as to identify the date of receipt (there is often the possibility of an official notification not be responded at the correct term).
Promote consistent Tax Planning with economic substance
In order to preserve the legal security of the company, it is necessary to assign legality and economic characteristic in the corporate movements or tax reorganizations. In this perspective, “consistent” tax planning would be the one in which legal alternatives are considered based on the particularities of the company’s operation for the benefit of its activity.
Creation of Internal Committees and Participation on external tax groups
It is interesting the creation of internal committees in order to present and discuss tax issues, exposures and relevant projects for other areas of the company. Moreover, it is valid the participation on technical groups in the tax area in order to absorb the news of the market.
Please note that, from a Federal and State perspective, the cases of not compliance with tax obligations (collection of taxes or error in returnes) the imposition of fines may vary from 50% to 100% of the value not collected and, for cases of fail in accessory obligations there are percentage of charges that is higher than the value of the own operation.
Therefore, there is a necessity to realize a strategic and dynamic analysis of the tax procedures of the company, within a situation of obey of tax law. Indeed, think in tax law security is to act according to the tax rules, being the company, comprised by the force of our tax system.