Sanctioned this Tuesday (13) in a ceremony in Brasília, the second law regulating tax reform had sections vetoed by President Luiz Inácio Lula da Silva. The changes affect, among other points, the taxation of Football Limited Companies (SAFs), loyalty programs, municipal rules for the transfer of properties and specific tax benefits.
In total, according to the Ministry of Finance, ten provisions of the Complementary Bill (PLP) 108 were vetoed. The justifications were published in this Wednesday’s edition (14) of Official Gazette of the Union.
SAFs and player sales
One of the main vetoes affects the SAFs. The text approved by parliamentarians predicted that the values obtained from the sale of players would be outside the calculation basis of the new taxes created by the reform.. With the veto, these revenues will be taxed again.
Lula also blocked the reduction of the tax burden on SAFs from 6% to 5%. With the decision, the total rate will be 6%, divided as follows:
• 4% of taxes unchanged by the reform;
• 1% Contribution on Goods and Services (CBS), federal tax;
• 1% Tax on Goods and Services (IBS), state and municipal tax.
According to the economic team, the reduction would contradict the Budget Guidelines Law (LDO), which prohibits the creation of new tax benefits without compensation.
Loyalty programs
Another relevant veto deals with loyalty programs. Congress had included provisions that allowed the taxation of non-onerous points, such as miles granted for registration, promotions or compensation for flight delays.
At the request of the Ministry of Finance, Lula vetoed the change. Therefore, these points remain outside the calculation basis of IBS and CBS.
Cashback for piped gas
Another blocked point was a rule that extended the cashbackreturn of taxes to the lower-income population, for piped gas. Congress had included the possibility of reimbursement in single-phase taxation operations, with charges at just one link in the production chain, which would benefit the supply of piped gas. The economic team assessed that the exception would create incompatibility with the general model of the system.
Regulated in the first complementary tax reform law, sanctioned in January last year, the cashback provides for 100% refund of the Contribution on Goods and Services (CBS) and at least 20% of the Tax on Goods and Services (IBS) to the low-income population on:
• Water;
• Gas cylinder;
• Telephone and internet bills;
• Electric energy;
• Sewage.
For other products and services, the reimbursement will be equivalent to 20% of CBS and IBS. In the case of IBS, states and municipalities will have the autonomy to define whether the refund will be greater than 20%.
Liquid foods and ITBI
The president also vetoed the generic inclusion of “natural liquid foods” in the list of products with a 60% reduction in tax rates. According to the Treasury, the wording was too broad and could generate distortions in competition between milk and juices. Congress had included this section in the law to benefit items such as plant-based milk.
Another veto affected the Property Transfer Tax (ITBI), charged by municipalities. The project provided for the possibility of paying the tax in advance until the transfer title was formalized. The measure was blocked after a request from the National Front of Mayors, which pointed out difficulties in adapting between municipalities, as each city hall collects the tax in a different way.
Free Zone and simulation
Lula also removed from the text the exclusive attribution of the Superintendency of the Manaus Free Trade Zone to regulate verification and inspection procedures, expanding the scope of the rule.
Furthermore, the legal definition of “simulation” as tax fraud was vetoed. According to the Treasury, the proposed concept differed from interpretations consolidated in the Judiciary, which could create legal uncertainty.
With the sanction and vetoes, the second stage of tax reform regulation comes into force. However, Congress will still be able to analyze the overturn or maintenance of presidential vetoes.
