By Nicolle Francine Bigochinski Lima and Guilherme Santil Felix da Silva 

The proposed Taxpayer Protection Code (PLP 125/2022), recently approved by the Federal Senate and now proceeding under an urgent review in the House of Representatives, represents a significant step toward consolidating the rights and duties of taxpayers in their dealings with tax administrations at the federal, state, federal district, and municipal levels.

Motivated by the high complexity of the tax system, legal uncertainty, and a widespread sense of inequality, the bill seeks to balance the relationship between the Tax Authorities and taxpayers.

Below are the main aspects and innovations introduced by the bill.

Relationship with the Tax Authorities: Rights, Duties, and Guarantees

One of the pillars of PLP 125/2022 is the express recognition of fundamental taxpayer rights, duties, and guarantees. The bill translates principles already enshrined in the Federal Constitution into clear and applicable rules within the tax sphere. It constitutes an effort to bring taxpayers closer to the tax administration’s decision-making structures, providing greater predictability and transparency in these interactions.

More than merely reiterating existing guarantees, the text seeks to strengthen legal certainty and limit arbitrary administrative practices. Tax administrations will be required to act within objective and proportional parameters, observing reasonable deadlines, equal treatment, and adequate justification for each fiscal measure. This means that taxpayers must clearly understand why they are being audited, what their rights are, and what conduct is expected of them.

Among the rights reaffirmed for taxpayers under this Code are:

• Receiving clear and simple communications;
• Being duly notified of administrative proceedings;
• Accessing tax documents and information, with the ability to correct them when necessary;
• The right to compensation for damages caused by improper tax charges;
• Facilitated treatment for taxpayers who lack sufficient resources to cover fees and procedural costs.

On the other hand, the bill also reaffirms the taxpayer’s duty to cooperate, recognizing that the tax relationship must be guided by mutual good faith. Taxpayers are responsible for maintaining proper records, complying with primary and ancillary obligations, and cooperating with audit procedures.

The text also imposes several obligations on the Tax Authorities, including the duty to reduce the volume of administrative and judicial tax disputes and to justify their actions based on the law. Agencies must also prioritize cooperative solutions to conflicts, taking into account taxpayers’ financial conditions for settling their debts and the possibility of recovering disputed amounts.

Additionally, tax authorities will be required to publish all acts related to dispute resolution and periodically consolidate updated tax regulations. If such consolidation is not carried out, fines imposed by these agencies may be reduced.

Incentivizing Compliance and Recognizing the “Good Taxpayer”

Another innovative element is the introduction of the Cooperative Tax Compliance Program (Confia), the Tax Compliance Incentive Program (Sintonia), and the Brazilian Authorized Economic Operator Program (OEA Program), in addition to Compliance Seals that may benefit companies of all sizes.

Benefits offered by these programs include preventing penalties and tax disputes, reducing fines and interest, and granting a tax compliance bonus. This bonus provides taxpayers with a discount of up to 3% on the lump-sum payment of the Social Contribution on Net Profit (CSLL), limited to R$ 1 million in the third year of the program’s validity.

When applied together, these measures aim to encourage voluntary compliance with tax and customs obligations by fostering a cooperative relationship between the Federal Revenue Service and taxpayers. This shift in perspective reflects a policy focused on rewarding responsible behavior instead of relying solely on sanctions.

The Persistent Debtor and PLP 164/2022

PLP 125/2022 also dedicates special attention to the concept of the persistent debtor—entities or individuals who repeatedly and unjustifiably fail to pay taxes, often as part of a business model based on systematic default to defraud the system and gain competitive advantage.

However, this classification must follow objective and proportional criteria within a simplified administrative procedure, so as to avoid including compliant businesses in special regimes or lists based solely on temporary financial hardship.

Accordingly, taxpayers will have 30 days from notification of the administrative proceeding to regularize their situation or present a defense, which will suspend the proceeding. However, suspension will not apply in cases indicating fraud or tax evasion, such as the creation of shell companies, participation in organized schemes to evade taxes, production or sale of illegal goods, using front persons (“laranjas”), or having a non-existent business address.

Taxpayers classified as persistent debtors will be barred from enjoying tax benefits, participating in public tenders, entering into contracts with the government, or filing for judicial reorganization. They may also be deemed ineligible in tax registration databases.

The topic is directly related to PLP 164/2022, approved by the Senate’s Committee on Economic Affairs (CAE), which addresses the oversight and control mechanisms aimed at combating large-scale tax evasion. While PLP 164/2022 creates instruments for stronger state action against those who make tax evasion a business strategy, PLP 125/2022 ensures that such action remains within legal boundaries and respects taxpayer rights.

Consequences and Impacts

For taxpayers, the expected effects are broadly positive. The text consolidates rights and guarantees, strengthens transparency obligations for tax administrations, and encourages a more collaborative posture from the State.

Furthermore, tax compliance will become not only a legal requirement but also a competitive advantage. Those who maintain transparent practices and fiscal regularity are likely to benefit from the programs established by the bill.

At the same time, the combination of PLP 125/2022 and PLP 164/2022022 creates a system of checks and balances: while the former protects, the latter oversees. This interplay may lead to a more balanced and fair tax system—one that effectively combats tax evasion without penalizing taxpayers who act in good faith.

The Tax Law Department at Marins Bertoldi Advogados is closely monitoring the developments on this matter and remains available to address questions and analyze the topic in light of each client’s specific circumstances.