Brazil’s New Taxpayer Protection Code

By Fabiano Deffenti | 22 January 2026

On 9 January 2026, Brazil enacted Complementary Law 225/2026, creating the Taxpayer Protection Code (the “Code”). The Code is designed to reshape the relationship between taxpayers and tax authorities around transparency, predictability and cooperative compliance for taxpayers who behave in good faith, while materially increasing the regulatory and enforcement costs for tax dodgers, whom the legislator chose to call “habitual tax debtors”.

Summary

The Code:

• sets out a consolidated baseline of taxpayer procedural rights (access to files, clear communications, reasonable decision times and reinforced due process safeguards);
• contains express duties for the tax authorities, including proactive guidance, automated notices of inconsistencies and a preference for pre-assessment self-compliance;
• creates compliance programs and conformity seals with concrete benefits, including a material compliance bonus for the Social Contribution on Net Profits (“CSLL”) and procedural prioritisation; and
• establishes a framework for classifying and restricting “habitual tax debtors”, including publication mechanisms, integration with the register of non-compliant taxpayers (“Cadin”) and targeted limitations on criminal liability extinction by payment.

The Code’s framework

The Code operates at two levels. First, it sets out the rules of engagement between taxpayers and tax authorities. Second, it creates program-based incentives for cooperative compliance and introduces a more operational definition of habitual tax debtor, with administrative and enforcement consequences.

Taxpayers’ rights

Article 4 of the Code enumerates a core set of taxpayer rights. These include the rights:

• to receive clear, accessible information about rules, procedures and decision criteria;
• to access tax files (including inspection and copies) and the ability to correct data held by tax authorities;
• to be given notice, heard and to have at least one level of administrative challenge and one level of appeal;
• not to provide documents or information the relevant tax authority already holds;
• to be represented by a lawyer, without prejudice to ongoing supervisory or inspection activities;
• to obtain decisions from tax authorities within a reasonable time;
• to have tax-related data kept confidential, subject to certain statutory exceptions; and
• to have bank guarantees and surety insurance enforced only after final judicial resolution of an adverse merits decision.

Two additional due process rules are worth highlighting, one for the benefit of the taxpayer and the other for the benefit of tax authorities:

• the prohibition on tax authorities conditioning the exercise of rights by the taxpayer on prior payment of fees, provision of guarantees or proof of tax compliance, except where expressly provided by law; and
• the express rule that the right to a lawyer cannot be used to obstruct fiscal activities.

Duties of the tax authorities

The Code also sets out specific duties on tax authorities that, if implemented consistently, should reduce friction and litigation. These include the duty to:

• reduce litigiousness (a huge issue for Brazilian taxpayers), preferably using alternative dispute resolution methods;
• respect legal predictability and good faith when applying tax laws;
• identify good taxpayers that contribute to the proper application of tax laws;
• take ex officio procedural steps in administrative proceedings, avoiding artificial stagnation;
• act proportionally and take into consideration the taxpayer’s cooperation level and contextual constraints on compliance;
• be transparent and provide participation channels for improving tax rules and administrative practice; and
• give preferential use to automated notifications of inconsistencies and emphasis to allowing self-compliance before formal assessment notices are issued.

Importantly, taxpayers are given the right to seek damages from tax authorities that “act with intent, bad faith, abuse or excess” when applying the Code. These are in addition to the applicable criminal and administrative sanctions.

Cooperative compliance and classification programs: Confia, Sintonia and OEA

The Code establishes two new federal programs (Confia and Sintonia) and expands the Authorised Economic Operator program (“OEA”). Together, they create an incentive ladder that rewards taxpayers who invest in governance, data quality and predictability.

Confia: cooperative compliance for structured taxpayers

Confia is voluntary and geared towards deeper, structured interaction with the Federal Revenue Department. Eligibility is built around demonstrable tax governance and a compliance management system, including documented policies, procedures for ancillary obligations and internal control testing. The program’s stated operating principles include good faith, dialogue, transparency, predictability and prevention of disputes.

Sintonia: objective classification and service prioritisation

Sintonia classifies taxpayers by reference to registration compliance, payment behaviour, timely filing of ancillary obligations and accuracy of information. The classification is generally confidential to the taxpayer, except that the highest classification tier may be publicised. Higher classifications are designed to receive priority treatment in refunds and service channels and to facilitate self-compliance.

OEA: customs compliance and trade facilitation

The OEA framework links customs security with trade facilitation by rewarding operators that can demonstrate reliable controls, traceability and a sound compliance history with simplified import, export and transit procedures. In effect, it operates as a risk-based program: low-risk, high-compliance participants benefit from streamlined clearance, fewer friction points and greater predictability in cross-border flows.

For eligible operators, the Code also provides mechanisms for tax deferral on importation, subject to defined conditions and ongoing compliance. These benefits are not permanent entitlements: they are coupled with loss-of-benefit triggers (such as deterioration of compliance status and breach of conditions), which can result in suspension or withdrawal of facilitation measures.

Conformity seals: tangible benefits for compliant taxpayers

The Code creates three types of Tax and Customs Conformity Seals: the Confia Seal, the Sintonia Seal and the OEA Seal. For taxpayers holding the Confia or Sintonia seals, the Code provides concrete incentives, including:

• a CSLL compliance bonus: a 1% discount for cash payment of CSLL, with a progressive scale (up to 3%) for sustained seal maintenance, subject to annual caps;
• restrictions on the use of asset seizure as a precautionary measure by tax authorities, subject to statutory exceptions;
• tie-breaker preference in public procurement processes (without prejudice to micro and small enterprise preferences, which remain);
• prioritisation of selected service requests and processing demands before the tax authorities; and
• early guidance when the administration detects indications of non-compliance, and operational reminders related to renewal of tax clearance certificates.

Seal cancellation triggers include persistent non-payment after notice, court-based creditor protection events, unresolved registration irregularities or classification as a habitual tax debtor. Administrative review is available under the general Federal Administrative Procedure Law (Law 9,784/1999).

The “habitual tax debtor”

A key new concept introduced by the Code is the “habitual tax debtor” (devedor contumaz). The Code defines a habitual tax debtor as a taxpayer whose conduct is characterised by the “substantial, repeated and unjustified” non-payment of taxes.

The non-payment will be “substantial and repeated” if:

• the taxpayer’s assets (presumably net assets) are greater than the amount of the tax debt’s principal (that is, the debt without fines and interest); and
• the debt is not enforceable due to a protection (such as a repayment program or a judicial order).

At federal level, the non-payment will also be deemed “substantial” where irregular tax credits (either enrolled in Cadin or assessed and unpaid) reach at least BRL 15 million and exceed 100% of the taxpayer’s known net asset base (as approximated by total assets reported in its federal filings with the Federal Revenue Department). The specific thresholds for states and municipalities will be defined by their respective laws if enacted on or before 9 January 2027; if not enacted by that date, the federal threshold will apply.

Non-payment will be treated as “repeated” when the taxpayer has defaulted on tax payments for at least 4 consecutive tax periods or over 6 tax periods within 12 months.

Finally, non-payment will be “unjustified” where “objective motives” are absent. “Objective motives” include:

• a declared public calamity;
• losses in the current and previous financial year, except in cases of fraud or bad faith; and
• where enforcement action has been commenced and there is no fraud on the tax creditor, such as where the taxpayer has not distributed profits or dividends, paid interest on net equity, reduced shareholders’ capital or granted loans to related parties.

Consequences: regulatory cost, publication and Cadin integration

Once declared a habitual tax debtor, the taxpayer becomes subject to restrictive administrative measures and a coordination mechanism that enhances reputational and operational pressure. The Code contemplates publication of identifying information on the tax authorities’ websites after completion of the relevant procedures. It also requires integration with Cadin, supported by data-sharing obligations among federal, state and municipal tax authorities.

No extinction of criminal liability by payment

A particularly consequential amendment is the limitation on the extinction of criminal liability by payment or instalment plan for taxpayers declared habitual debtors by a final administrative decision and registered in Cadin, including for offences such as failure to remit social contributions.

This draws a sharper line between occasional financial distress and professionalised, strategic non-payment, with the latter carrying very material consequences for the taxpayer.

Entry into force

Most Code provisions took effect on 9 January 2026. The implementation of Confia, Sintonia and the Conformity Seals is scheduled to begin on 9 April 2026. Federal, state and municipal governments must also adapt their own legislation within one year of that date.

Practical steps for companies

For companies, the immediate priorities to consider are to:

• assess current compliance against the Sintonia criteria: registration status, payment regularity, ancillary filings and data accuracy;
• formalise tax governance and internal controls (policies, procedures, testing) to preserve the option of acceding to Confia;
• build a fast-response self-regularisation playbook for tax authority notifications and inconsistency alerts, to reduce assessment risk and penalties;
• stress-test exposure to the “habitual tax debtor” thresholds, particularly where there is material debt coupled with a low reported asset base; and
• reassess OEA eligibility, internal controls and potential use of import tax deferral mechanisms.

The Code is, in effect, a governance statute as much as it is a procedural one: taxpayers that invest in demonstrable internal discipline and data integrity will be better positioned to capture the program benefits and minimise dispute risk.

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Last modified: 4 April 2026