Written by Contributed by Vanessa Ribeiro Teixeira Borges
On 15 October 2024, the Brazilian Federal Revenue Department issued Normative Instruction RFB 2,229/2024 (the “New Rule”) introducing significant changes to the National Register of Legal Entities (Cadastro Nacional da Pessoa Jurídica, known as the “CNPJ”).
Brazilian authorities have used CNPJ suspension as an enforcement tool for many years. Companies can have their CNPJ suspended for non-compliance with tax obligations, failure to update registration details, or involvement in illegal activities. However, the process was less streamlined, with stricter criteria often requiring formal administrative procedures before the suspension could take effect.
With the introduction of New Rule, CNPJ suspension has become an even more powerful enforcement tool available to the authorities, allowing for the immediate suspension of a company’s CNPJ in cases of engagement in certain activities. Examples of enforcement applications include:
- Non-compliance with tax obligations can result in the non-issuance of the Certidão Negativa de Débitos (“CND”), a document proving that a company has no outstanding debts. Without the CND, companies are barred from accessing credit, entering contracts with public agencies, and participating in government bidding processes.
- Engaging in prohibited activities, such as selling illegal products (for instance, selling electronic cigarettes, which are banned in Brazil), will result in the immediate suspension of their CNPJ, preventing them from continuing business operations.
- Environmental violations or involvement in smuggling can also trigger CNPJ suspension, further limiting a company’s ability to operate.
- Non-disclosure of the ultimate beneficial owners by a company will lead to a suspended CNPJ where accurate or updated information about the company’s ultimate beneficial owner is not provided by the applicable deadlines.
The New Rule is part of the Federal government’s broader efforts to combat smuggling, environmental violations and other unlawful practices.
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Last modified: 12 November 2024
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