Cesar Peres Dulac Müller logo

CPDMA BLOG

Category:
Date: March 18, 2021
Posted by: CPDMA team

Congress overturns presidential vetoes to Law 14,112/20 and rehydrates the reform of the Business Recovery Law

The Presidency of the Republic sanctioned Law 14.112/20, which reformed Law 11.101/05, but with vetoes to important provisions - especially with regard to tax matters.

On yesterday's date (03/17), however, such vetoes were overturned by Congress (with the exception of two provisions - one that extended the suspension of labor executions to solidary debtors and another that dealt with the Rural Product Certificate), thus restoring good part of what was good about legislative reform.

Fundamentally, Law 11.101/05 is now in force with rules that:

(i) Make the rules for non-succession of the purchaser of the debtor's production units more consistent and secure, explaining that such protection covers "obligations of any nature, including those of an environmental, regulatory, administrative, criminal, anti-corruption, tax and labor nature ".

(ii) Remove the limitation of tax losses that can be used for deduction from the calculation basis of the capital gain resulting from the disposal of assets in the recovery process;

(iii) Exclude from the PIS/COFINS tax base the income arising from the discount and exclude the percentage limitation of the gain resulting from the discount in the calculation of IR and CSLL (reduction of adjusted net income by exclusion and negative tax base);

(iv) Make the "expenses corresponding to the obligations assumed in the judicial reorganization plan" deductible from the taxable income and CSLL basis;

(v) They expressly admit the filing of judicial/extrajudicial recovery by medical cooperatives.

These rules, now returned to Law 14,112/20 and, consequently, included in Law 11,101/05, represent an important step towards providing legal certainty to the purchasers of assets in judicial recovery processes (generating value for all those involved) and, within the scope of tax, eliminate the paradoxical tax burden resulting from a debt restructuring in which, in the end, everyone gives in and everyone loses, to some extent. 

The overturning of vetoes, therefore, should be celebrated.

Source: Daniel Burchardt Piccoli, lawyer and partner at Cesar Peres Dulac Müller.

Return

recent posts

STF decides that collective rule that restricts labor rights is constitutional

STF decides that collective rule that restricts labor law is constitutional. The Court observed, however, that the reduction of rights by Collective Agreements or Conventions must respect the guarantees constitutionally guaranteed to workers. The Federal Supreme Court ruled that Collective Bargaining Agreements or Agreements that limit or suppress labor rights are valid, provided that […]

Read more
The eviction action in the judicial recovery

Companies that file a judicial recovery action and have their activities carried out in leased properties may, in the event of default, face an eviction action, even if the credit is listed in the creditors list. On this topic, there are some very important issues being dealt with in the courts regarding the suspension of the demand and about the resumption of the asset during the period of processing of the judicial reorganization.

Read more
Law to reduce bureaucracy of Public Records passed

On June 27th, Law nº 14. 382/2022 was enacted, whose main objective is the creation of the Electronic System of Public Records (SERP), which aims to unify the systems of notary offices throughout the country, reducing the bureaucracy of the national notary system ( the measure covers the registrations of real estate, titles and civil documents of natural persons and […]

Read more
Bidding law and the use of Dispute Boards

In large-scale contracts, complexity, amounts involved, and time are common causes of conflict between the parties. An effective option to help prevent and resolve these disputes is called a dispute board. This method, unlike mediation, arbitration and conciliation, consists of creating a council of technicians, appointed […]

Read more
Tax Benefits to the Events Sector - PERSE Law

The restrictive measures adopted worldwide to minimize the spread of Covid-19 have undeniably brought significant impacts to various sectors of the economy. The determination of isolation or quarantine to face the pandemic, the most effective measure to reduce the circulation of the contagious agent, has made the sector of culture and entertainment events […]

Read more
CVM Resolution No. 80 and the dissonance with the secrecy inherent to arbitration proceedings

In force since May 2, 2022, CVM Resolution No. 80 brings a new notice on corporate demands, regulating the registration and provision of periodic and occasional information from the issuers of securities. Such regulation was the subject of Public Hearing 1/21 and consolidated the content of Instructions No. 367 and 480 […]

Read more
crossmenuchevron-down
en_USEnglish
linkedin Facebook pinterest youtube lol twitter Instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter Instagram