Tax transactions: a clear step forward for Brazil's tax system
In 2024, Brazil consolidated its use of tax transactions (transações tributárias) as a solution to address the country’s vast amount of tax litigation and promote a more stable business environment. Starting in 2020, the Brazilian Federal Revenue Service and the Attorney General’s Office of the Brazilian Treasury (PGFN) have harnessed this mechanism as part of a clear movement to facilitate collections and legitimize tax revenue. Since then, the total value of settlement agreements the Brazilian government signed with taxpayers has jumped from BRL 1.7 billion in 2020 to a record BRL 28 billion in 2024 – representing a substantial portion of the BRL 49.2 billion the PGFN recovered throughout the year.
This record ultimately reflects a set of strategic actions implemented to optimize tax collection, reduce the number of tax lawsuits involving the federal government, and strengthen tax justice in Brazil.
Tax transactions mark a new era for tax law in Brazil. Tax authorities in various other countries already have mechanisms of a similar nature, which have long been a part of their taxpayers' lives. This mechanism, therefore, represents a step forward in the Brazilian tax authorities' relationship with taxpayers – one based on trust and credibility. This trust ensures a more harmonious relationship between the parties that is less likely to result in litigation. Meanwhile, the system gains credibility both in terms of the parties' interactions and in the desired outcome. In my opinion, tax transactions are an evolution that should be applicable to all taxpayers. There's no turning back now
Ana Paula Lui
Partner
The core focus of this initiative is the greater flexibility and clarity it provides in negotiating transactions – making the process more efficient, allowing taxpayers to settle their tax debts securely, and helping create a more balanced tax environment. Moreover, it reflects a commitment to transparency in tax management, promoting stronger tax justice and directly benefiting Brazilian society as a whole
João Colussi
Partner
