Angelo Ambrizzi
Lawyer at Marcos Martins Advogados
The Debt Clearance Certificate, known by the acronym CND, is a document issued by a government agency to certify that an individual or legal entity has no tax debts. The CND can be issued for federal, state and municipal debts.
The document is requested as a requirement for numerous operations, from participating in bidding processes, approving financial operations, carrying out corporate structuring, among other needs.
In addition to the requirements listed, it is necessary to present the Debt Clearance Certificate – CND or Positive Certificate with Negative Effect – CPEN, after the approval of the judicial reorganization plan by the creditors and, if the reorganized company does not present the certificate, the judge may decree bankruptcy.
Until 2020, the Courts, in most cases, admitted the non-presentation of a CND or CPEN in judicial reorganization, as there was no regulation of a special installment plan for companies in reorganization.
This omission was only remedied at the end of 2020. As a result, as of this date, rulings dismissing the requirement to present a CND or CPEN are becoming increasingly scarce.
In practice, it is clear that the installment plan is not enough for companies to achieve fiscal regularity, even if the companies demonstrate the ability to meet the commitments of the recovery plan.
Since the beginning of 2021, the impasse has been in place: a company that is in compliance with the judicial reorganization and is not tax compliant.
It is clear that just following the path of incentivized installment payment of tax debts is insufficient, and it is necessary to combine other solutions to obtain the CND or CPEN.
One way is to analyze the tax debt in its entirety, proposing intelligent legal solutions that, above all, are geared towards the company’s financial modulations.
Most companies are unaware of the full composition of their tax debt, and this is the first step in designing possible resolution scenarios for obtaining the certificate.
By understanding the detailed formation of the tax debt and having in-depth knowledge of the tax rules, it is possible to generate a structured action plan to obtain the CND or CPEN at the best financial cost to the company.
This analysis involves understanding several factors and pieces of information. These include: the company’s tax regime, the supply chain, a list of sales recipients, details of the grounds for administrative and judicial proceedings, the purpose of which is to identify possible causes for reducing debts, as well as possible credits for debt relief.
With the conclusion of the study, it will be possible to demonstrate, by means of technology, various interactive solution scenarios, some of them arising from the reduction of tax debt through legal challenges, or through guarantees, and even debt relief through the benefits of incentivized installment payments.
The strategic direction encompasses several action fronts and the joint management of these projects is another challenge in obtaining the CND or CPEN.
In the current scenario, the best thing for a company to do is to seek qualified tax advice in order to obtain a complete analysis of its debt and create strategic solution plans.
It is important to note that with the CND or CPEN in hand, the company can not only move forward with the judicial recovery process, but also take part in public tenders, improve its qualification with financial institutions and carry out corporate transactions.
Being up to date with the tax authorities demonstrates institutional maturity and is fundamental to guaranteeing the perpetuity of the business.
