In brief

The said decree changed the wording of Article 645 of the Income Tax Regulation - RIR/2018, as follows:

  1. In case of granting of tickets, only the expenses related to employees with a salary of up to five minimum wages are deductible.
  2. In case of granting own meal service, the deduction may be related to the expenses of all workers.
  3. The deduction is limited to the expenses of up to one minimum wage per employee.

These limitations were created to reduce the federal government's tax waiver and may significantly affect several taxpayers.

Based on case law, the publication of said decree may lead companies to challenge in court both (i) the disrespect to the principle of legality and (ii) the disrespect to the principle of anteriority, because the change takes effect from December 2021 and not just in the following year.

Therefore, we are alerting you to the need for companies to verify the convenience of filing a judicial measure on the matter, depending on the details of the specific case. Our team is available to assist you.

This e-alert is a general review of the subjects discussed above and does not constitute a legal opinion or legal consult.

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