Complementary Law No. 236/2026: Changes to the Brazilian Tax Code

The law updates tax rules and procedures

Complementary Law No. 236/2026 introduced changes to the Brazilian Tax Code (CTN) to establish general rules on dispute resolution, penalties, settlement by mutual agreement, and administrative proceedings in tax and customs matters.

Among the changes are provisions for mechanisms such as tax and customs arbitration and mediation, new limits on fines, changes to the rules on forfeiture and statutes of limitations, and general rules for tax administrative proceedings.

Consensual dispute resolution

Law No. 236/2026 now provides for mechanisms for the consensual or alternative resolution of tax and customs disputes.

Note: It is worth noting that transactions, mediation, and special tax and customs arbitration will not be considered a waiver of revenue for the purposes of the Fiscal Responsibility Law.

Limits and reduction of penalties

The law stipulates that penalties must comply with the principles of reasonableness and proportionality; therefore, the fine may not exceed 75% of the assessed tax or the affected credit. The limit will be 100% in cases of willful fraud, tax evasion, or collusion, and 150% in cases of repeat offenses. These limits do not apply to standalone fines not linked to the amount of the tax or credit.

Penalty reductions are also now provided for, in accordance with local laws, based on the timing of payment or installment arrangements and, in certain situations, participation in compliance programs, according to the percentages below:

A voluntary disclosure precludes liability, including liability for late-payment penalties, when accompanied, as applicable, by payment of the tax due and late-payment interest or by the deposit of the assessed amount. However, it is important to note that a habitual defaulter will not be entitled to a reduction, adjustment, or waiver of the penalty.

Changes to statutes of limitations, prescription, and overpayments

The legislation also modifies rules related to statutes of limitations and prescription, now providing that, in cases of willful misconduct, fraud, or simulation, the limitation period begins on the first day of the fiscal year following the one in which the assessment could have been made, as defined in Article 173, I of the CTN.

As for the partial payment of taxes subject to approval, the understanding is now formalized that the statute of limitations period begins on the date the taxable event occurs.

The law also establishes new grounds for interrupting the statute of limitations, including extrajudicial or judicial protest of the Certificate of Active Debt (CDA), the initiation of tax mediation, and the institution of special tax and customs arbitration.

As for tax overpayments, the adjustment must follow the same indices applicable to tax claims of the Federal Government, the states, the Federal District, and the municipalities, as applicable. The statute of limitations for claiming a tax overpayment also now applies to the filing of a claim with the tax administration, in which case it begins to run from the date the final judgment is certified.

New rules for the administrative tax proceeding

Law No. 236/2026 also established general rules for the Administrative Tax Procedure at all three levels of government, such as guaranteeing the right to a second hearing for federal entities with more than 100,000 inhabitants, deadlines of 20 business days for objections and appeals, and 5 business days for motions for clarification, as well as the suspension of deadlines between December 20 and January 20. The law also provides for the application of binding decisions by the STF (Supreme Court) and STJ (High Court Justice) Justicand prohibits hierarchical appeals against final decisions favorable to the taxpayer.

Tax compliance

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