New Brazilian taxpayer Bill of Rights: Lei Complementar No. 225/2026 and its impacts
On January 9, 2026, Lei Complementar (Law) No. 225/2026 (“LC 225/26”) was enacted, establishing the Código de Defesa dos Contribuintes (a new Brazilian taxpayer Bill of Rights) and setting forth general rules of nationwide application governing the relationship between taxpayers and tax administrations.
The new statute modernizes the Brazilian tax system by strengthening legal certainty, good faith, and the reduction of tax litigation, while at the same time classifying taxpayers into two distinct categories: (i) the compliant taxpayer (entitled to benefits, priority treatment, and differentiated certification); and (ii) the habitual tax defaulter (the taxable person who employs substantial, repeated, and unjustified tax nonpayment as a business strategy).
Relationship between the tax authorities and the taxpayer
LC 225/26 consolidates reciprocal rights and duties applicable to all taxpayers.
Among other guarantees, the law ensures taxpayers:
- Clear communications and access to information and administrative proceedings;
- Adversarial proceedings, full right of defense, and reasoned decisions;
- Waiver of the obligation to submit documents already held by the tax authorities;
- Reinforcement of duties of good faith, diligence, and cooperation in the fulfillment of tax obligations.
With respect to the tax authorities, the law imposes a duty of technical, transparent conduct
oriented toward reducing litigation.
Concept of the habitual tax defaulter
The law defines a habitual tax defaulter (devedor contumaz) as a taxpayer who cumulatively engages in substantial, repeated, and unjustified tax delinquency.
At the federal level, substantial delinquency is deemed to exist where outstanding and irregular tax liabilities amount to at least BRL 15 million (fifteen million Brazilian reais) and exceed 100% (one hundred percent) of the taxpayer’s known assets, in the absence of objective justification. Repetition, for purposes of characterizing habitual default, consists of four consecutive tax periods or six nonconsecutive periods within twelve months.
With regard to States and Municipalities, these entities may adopt the federal criteria (which will apply by default in the absence of specific regulation) or establish distinct criteria.
Classification as a habitual tax defaulter is subject to prior notice and an administrative proceeding, with full defense rights and the opportunity for prior regularization. It is expressly provided that tax liabilities whose enforceability is suspended shall not be taken into account.
Special attention should be given to the possibility that related parties of the legal entity may also be classified as habitual tax defaulters, pursuant to the same criteria set forth in Law No. 14,596/2023 (the Transfer Pricing Law).
Consequences of Habitual Default
A taxpayer classified as a habitual tax defaulter may be subject to:
- Loss of tax incentives and benefits;
- Prohibition from contracting with the government and participating in public procurement procedures;
- Registration restrictions and heightened scrutiny in administrative and judicial tax disputes;
- Significant limitations in judicial reorganization proceedings.
In addition, and with an even more burdensome effect, it should be noted that payment of the tax liability will not automatically extinguish criminal liability for tax crimes, thereby introducing a new sanctioning modality within Brazilian tax criminal law, with stigmatizing repercussions.
The Brazilian Federal Revenue Service (Receita Federal do Brasil) shall maintain a specific registry of habitual tax defaulters, with the possibility of public disclosure after the conclusion of the administrative proceeding.
Benefits for the Compliant Taxpayer
The law consolidates the Confia, Sintonia, and the Programa Brasileiro de Operador Econômico Autorizado (OEA), all aimed at promoting tax and customs compliance.
Among the benefits granted are:
- Priority in tax refunds and reimbursements;
- Facilitated issuance of tax clearance certificates;
- Incentives for voluntary self-regularization and reduction of penalties;
- Faster customs clearance procedures.
Taxpayers with a high level of compliance may obtain compliance bonuses, consisting of discounts ranging from 1% (one percent) to 3% (three percent) of the Contribuição Social sobre o Lucro Líquido – CSLL (Brazilian federal tax levied on a company’s net profits with a specific social-security purpose), depending on the number of years of participation, capped at BRL 250,000 (two hundred and fifty thousand reais) up to BRL 1,000,000 (one million reais) per year.
Entry into Force
The law is already in force, except for the provisions establishing the compliance programs, which shall only take effect after ninety (90) days from publication.
In addition, States, the Federal District, and Municipalities are granted a one-year period to adapt their respective legislation.
Final and Strategic Considerations
LC 225/26 inaugurates a new model of interaction between tax authorities and taxpayers, combining the promotion of tax compliance with qualified enforcement against strategic tax delinquency.
Special attention to the tax compliance status of companies is strongly recommended, both to mitigate risks and to take full advantage of the benefits provided under the new framework.
Our firm remains available for further clarifications and tailored legal analyses.
