Tiago Aparecido da Silva
Lawyer at Marcos Martins Law Firm
Judicial reorganization, which is still viewed with a certain amount of prejudice by some people, is a legal instrument designed to “…make it possible to overcome the debtor’s economic and financial crisis, in order to maintain the source of production, the employment of workers and the interests of creditors, thus promoting the preservation of the company, its social function and the stimulation of economic activity” under the terms of article 47 of Law 11.101/2005.
The law’s interest in guaranteeing the continuity of the company is aimed at preserving jobs and providing satisfaction for creditors, albeit in an unconventional way, and these are the commitments made by those who use this instrument.
However, when it comes to judicial reorganization, what brings concern and uncertainty to companies is tax debt, which cannot be the subject of the payment plan, and the tax authorities are allowed to continue collecting it.
For this reason, concomitantly with the interest in Judicial Recovery, efforts should be made to ensure proper management of past and future tax liabilities, including the development of strategies for installment payments.
This work allows the company to adjust its tax burden, optimize the use of credits and reduce debts about to fall due, as well as making it possible to join and maintain any special installment plans granted by the tax authorities with significant reductions in the amount to be paid
These installment plans offer great advantages, but the requirements imposed by the tax authorities in exchange for the “generous” reductions offered must be carefully observed.
Examples include the Special Tax Regularization Program (PERT) and the Rural Tax Regularization Program (PRR), the former of which allowed the settlement of debts with tax losses and both of which granted reductions in interest and fines, but in exchange required the taxpayer, among other commitments, to pay the installments on time and to pay the taxes due, under penalty of termination and cancellation of all the benefits previously granted.
Given these requirements, it is certain that a company that joined the installment plan and subsequently went into judicial reorganization would have serious difficulties maintaining the agreement, which would further aggravate its economic situation.
Recognizing this situation, the Judge of the São Simão District Court, in the interior of São Paulo, granted a request made by the plaintiffs in the Judicial Recovery of a lawsuit and ordered that they not be excluded from PERT and PRR, even in the event of the existence of outstanding and enforceable tax debts, including debts due after joining the installment plans that were the subject of terminated and/or defaulted installment plans or that will be terminated and/or defaulted on.
The judge considered that granting the claim does not remove the Treasury’s credit, but merely maintains the conditions of the agreement between the companies and the tax authorities.
He also considered in the decision that any exclusion from the installment plans would ultimately result in the bankruptcy of the plaintiffs due to the high value involved, which would also be detrimental to the tax authorities, which would need to wait for the liquidation of the debtors’ assets and submit to the legal order of preference.
He also mentioned the function of Judicial Reorganization, which is to make it possible to overcome the debtor’s financial economic crisis, preserve the company, its social function and stimulate economic activity, as grounds for granting the request.
This emblematic decision demonstrates the current dynamics involving tax law, which no longer tolerates passive attitudes towards the tax authorities
Taxpayers should be aware that there are guarantees for their rights and for this reason they should seek legal help whenever necessary
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