In December of last year, the Finance and Taxation Committee of Brazil’s Chamber of Deputies approved Bill No. 2.486/2022, which introduces arbitration as a method for resolving tax and customs issues within the country.

Objective of the Bill

The project aims to allow the use of arbitration to prevent and resolve tax disputes with Brazil’s federal government, states, and municipalities, thereby relieving the judiciary and expediting solutions.

It is important to note that arbitration is an extrajudicial method of resolving business disputes. It is less bureaucratic than a court proceeding and characterized by speed, as the disputing parties agree to submit the controversy to an arbitrator or a private tribunal, which will ultimately issue the arbitral award.

Regulation

According to the bill, the Brazilian Tax Authority will determine the subjects eligible for arbitration and at which procedural stages it can be initiated, as well as the value criteria for submitting disputes, the procedure for evaluating requests, and the rules for choosing the chamber and the arbitrator.

Additionally, to expedite the resolution of tax conflicts, the bill sets a maximum period of 12 months from the initiation of arbitration to the conclusion of the proceedings. This period can be extended once by mutual agreement, as long as it does not exceed 24 months. Furthermore, there is a requirement for the arbitrator or the arbitral tribunal to render the arbitral award within 60 days from the conclusion of the proceeding stage.

However, the new text specifies three areas not subject to arbitration:

– Cases based on principles of equity rather than strict law;
– Cases concerning the constitutionality or theoretical discussion of a law; and
– Issuance of an award resulting in a special, differentiated, or individualized tax regime, directly or indirectly.

Finally, while the bill aims to accelerate dispute resolution and aligns with the Brazilian Tax Reform, it still has unresolved gaps likely to be addressed through amendments or corrections in the Chamber of Deputies. As the bill is in a conclusive phase, it currently awaits only the analysis by the Constitution and Justice and Citizenship Committee (CCJ) of the Chamber before proceeding to presidential sanction, provided no changes or appeals to the Plenary occur.

The Tax Law team at Loeser e Hadad Advogados is available to provide additional information and/or clarifications on the topic.