Complementary Law (LC) No. 208/2024, published on July 3, 2024, introduced significant changes in the financial administration of the Federation Entities, addressing three main areas: the assignment of tax and non-tax credits, extrajudicial protest as a means of interrupting prescription, and the requisition of information by the Tax Administration.
Assignment of Credits With the new law, the Union, the States, the Federal District, and the Municipalities can now onerously assign their rights over tax and non-tax credits to private legal entities or investment funds regulated by the Securities and Exchange Commission (CVM). This innovation was incorporated into Law No. 4,320/1964 by Article 1 of LC No. 208/2024, which added Article 39-A. Federative Entities can create Special Purpose Companies (SPEs) to facilitate these assignments, eliminating the need for bidding. However, financial institutions controlled by the Federative Entities, such as Caixa Econômica Federal and Banco do Brasil, are prohibited from acquiring these credits in both the primary and secondary markets, as well as from carrying out operations backed or guaranteed by these credits. The assignment must preserve:
- The original nature of the credits, their guarantees, and privileges;
- The criteria for updating values and the distinction between principal, fines, and interest;
- The payment and maturity conditions, in addition to the terms agreed upon with the debtor;
- The prerogative of the Public Treasury in the judicial and extrajudicial collection of the assigned credits. It is important to note that the assignment is restricted to the right to receive the already recognized credits, not covering disputed debts. Additionally, the Public Treasury does not assume any additional responsibility, fully transferring the payment obligation to the debtor. The revenue from these assignments must be allocated according to Article 44 of the Fiscal Responsibility Law (LRF): 50% for social security expenses and 50% for investments.
Extrajudicial Protest and Interruption of Prescription LC No. 208/2024 also amends item II of Article 174 of the National Tax Code (CTN), allowing the prescription to be interrupted by extrajudicial protest, in addition to judicial protest. This extends the prescription period by another two and a half years, providing more time for the Public Treasury to collect the credits.
Requisition of Information Finally, the new law modifies Article 198 of the CTN, authorizing the Tax Administration to request registration and asset information from public or private entities and bodies. The enactment of Complementary Law No. 208/2024 brings significant changes to the country’s tax environment. For taxpayers, the assignment of tax and non-tax credits can bring a series of practical implications. On one hand, this new dynamic can facilitate the settlement of tax debts by allowing private entities to acquire credits and offer differentiated payment conditions. On the other hand, companies must be attentive to the new requirements and procedures resulting from the assignment, especially concerning the preservation of the originally agreed conditions. Additionally, the inclusion of extrajudicial protest as an interruptive cause of prescription reinforces the need for careful management of tax debts. This measure extends the deadline for the Public Treasury to collect, requiring taxpayers to closely monitor their tax obligations to avoid unpleasant surprises and potential legal complications.