As is well known, the Federal Government and the States have declared a Public Health Emergency and have been adopting measures to prevent infection and cope with the spread of the new CORONAVIRUS (COVID-19). The measures aim to encourage isolation of the population to try to contain the pandemic as decreed by the World Health Organization (WHO). Faced with the declared Public Health Emergency, many companies have adopted remote work - home office - for their employees. However, such measures often hinder or even impair compliance with the main and ancillary tax obligations, whether due to reduced personnel, the lack of remote access to systems or the absence of safe standards to protect the data of the taxpayer, its customers and its employees.

Therefore, it is likely that the delay or even non-compliance with these obligations will be questioned by the Tax Authorities, with severe penalties imposed on taxpayers who are simply trying to comply
with the preventive measures and cope with the COVID-19 global pandemic, as required by the Government itself.

Despite non-compliance with tax obligations being punishable regardless of taxpayer fault (CTN, art. 136), the jurisprudence of the Superior Courts has ruled that force majeure situations may exclude liability, including tax.

Some countries like China have recognized the pandemic, as declared by WHO, as a force majeure event. In Brazil, although the discussion is still recent, the determinations and effects arising from the
State of Emergency enacted by some States in Brazil - and which may become even more rigid to contain the pandemic - may be used for this characterization.

Therefore, we believe it is possible that these assessments will be questioned in court, provided that the occurrence may be characterized as an unforeseeable circumstances or force majeure, depending on the measures adopted by the State and the taxpayer's own situation, showing that non-compliance with the tax obligations was inevitable in the face of the established pandemic and the measures imposed by the public powers.

In this sense, we are available to assist our clients, preventatively and reactively, if they find themselves in this situation.

* Content prepared in cooperation with Trench Rossi Watanabe, a Brazilian law firm. Please contact Paula Balduino for inquiries.

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