Supplementary Law No. 225/2026: Taxpayers' Defense Code

On January 9, 2026, the final text of the Supplementary Law ("LC") No. 225/2026 was published in the Official Gazette of the Federal Government, which launches the Taxpayers´ Defense Code (the “Code”), establishing fundamental rules of the tax relationship that must be observed by the entire Public Administration, as well as the rights, duties and guarantees of the taxpayer in relation to the tax administration.

The Code establishes mechanisms to encourage tax compliance and cooperative resolution with the aim of reducing litigation and increasing transparency. In this context, the rule highlights taxpayers considered to be good payers and cooperatives, allowing them access to simplified service channels, priority in the analysis of administrative proceedings and encouragement of self-regulation, according to rules to be defined by law or specific regulation.

On the other hand, the Code strengthens enforcement against tax evasion, fraud and unfair competition, as well as imposing penalties for taxpayers classified as "persistent tax debtors."

Persistent Tax Debtor

The Taxpayer Defense Code defines a “persistent tax debtor” as the taxpayer whose tax behavior is characterized by substantial, repeated and unjustified delinquency of taxes, detailed as follows:

• Default is substantial when the debtor maintains irregular tax credits, registers as overdue or constituted and not defaulted in the administrative or judicial sphere of a high value. At the federal level, it must be above R$ 15 million and higher than the known assets. The limits in the case of States, Federal Districts and Municipalities will be set in local law (or, in the absence of this, federal parameters apply).
• It is repeated when the irregular situation persists for four consecutive periods or six alternate periods within 12 months.
• It is unjustified when there are no objective reasons that explain the recurrence of non-payment.

It is also considered “persistent tax evasion” if the debtor is a related party of a legal entity written off or declared unfit in the last five years with tax credits in an irregular situation in an amount equal to or greater than R$15 million, or which maintains the qualification of persistent tax debtor. To this end, the concept of related parties of the transfer pricing legislation is applied.

Regarding the administrative proceeding for identifying the persistent tax debtor, the Code establishes that, after notifying the taxpayer, there will be a period of 30 days to: (i) pay the credits in full or in installments; (ii) prove sufficient equity to cover the debts; or (iii) present a defense with suspensive effect, ensuring the adversarial and full defense.

As a consequence of the characterization of default, the legislation provides for restrictions such as:

• Prohibition of access to tax benefits, of participating in bids, and of entering into contracts with the public authorities (e.g., authorization, license, qualification, concession);
• Impediment to the filing of judicial reorganization or its continuation;
• Declaration of ineligibility in the taxpayer register; and
• Differentiated administrative procedure, similar to that applicable in small-value tax administrative litigation.

Tax and Customs Compliance Programs

The Taxpayers´ Defense Code also institutes three compliance programs within the scope of the Internal Revenue Service (“IRS"), as well as the Tax and Customs Compliance Label (SCTA) to be granted under such programs.

The tax and customs compliance programs are as following:

1. Cooperative Tax Compliance Program ("Confia"): A voluntary enrollment program aimed at taxpayers who have a tax governance structure and internal compliance management systems, which aim to encourage compliance with tax and customs obligations by building a cooperative relationship between the IRS and participating taxpayers. Confia allows the IRS to establish its own proceedings, providing for dialogue between the parties, for the disclosure of acts, businesses or operations with tax relevance planned or implemented by the taxpayer, for which there is no express manifestation by the IRS, before the beginning of the tax inspection procedure, and for monitoring tax compliance.
2. Tax Compliance Stimulus Program ("Sintonia"): Aims to encourage compliance with tax and customs obligations through the granting of benefits to classified taxpayers based on objective criteria related to (i) registration regularity; (ii) timely payment of taxes; (iii) compliance with ancillary obligations; and (iv) accuracy of the information provided.
   Depending on the degree of compliance achieved, institutional benefits of greater relevance may be granted, such as priority in the analysis of administrative requests and facilitation of service. Thus, self-regulation will be allowed for taxpayers with a good history of tax payment but momentarily reduced payment capacity.
3. Brazilian Authorized Economic Operator Program ("AEO Program"): Aimed at facilitating foreign trade, such as a lower verification rate in customs clearance, faster release of goods at the time of customs clearance, and deferred payment of taxes or charges due in the import operation.
   Adherence to the program presupposes a high degree of tax regularity, financial solvency and adequate risk management, according to criteria to be defined by the RFB, and the participation of taxpayers classified as persistent debtors is expressly prohibited.

Taxpayers who maintain the Labels linked to each of the referred Programs will be entitled to benefits such as: (i) a CSLL default bonus, whose initial discount will be 1% and which may reach 3%; (ii) priority in service by the tax administration; (iii) preference in bids as a tie-breaking criterion and (iv) protection against listing of assets, except in exceptional situations. The benefit, however, does not apply to companies enrolled in Simples Nacional.

LC No. 225/2026 entered into force on the date of its publication, with the exception of the provisions related to the Compliance Programs and the respective labels, which will become effective only after 90 days of publication.

The tax practice of Tauil & Chequer Advogados in association with Mayer Brown is available for further clarification on the subject.