Normative Instruction BCB No. 319 — Revokes Circular Letter No. 3,429 of February 11, 2010, Regarding Accounting Procedures for Tax Obligations Under Judicial Dispute

BCB NORMATIVE INSTRUCTION NO. 319, OF NOVEMBER 4, 2022

Revokes Circular Letter No. 3,429, of February 11, 2010, which clarifies the procedures for the accounting recording of tax obligations under judicial dispute.

The Head of the Department of Regulation of the Financial System (Denor), in the exercise of the authority conferred upon him by art. 23, item I, letter "a", of the Internal Regulations of the Central Bank of Brazil, annexed to Ordinance No. 84,287, of February 27, 2015, based on art. 3 of Resolution No. 3,823, of December 16, 2009,

R E S O L V E:

Art. 1 Circular Letter No. 3,429, of February 11, 2010, is hereby revoked.

Art. 2 This Normative Instruction enters into force on January 1, 2023.

João André Calvino Marques Pereira

NOTE 1488/2022 – BCB/DENOR, OF NOVEMBER 4, 2022

Justifies the proposal for the issuance of a normative instruction revoking Circular Letter No. 3,429, of February 11, 2010, which clarifies the procedures for the accounting recording of tax obligations under judicial dispute.

Dear Head of Denor,

This Note justifies the proposal for the issuance of a normative instruction by the Department of Regulation of the Financial System (Denor), in the exercise of the authority conferred upon it by art. 23, item I, letter "a", of the Internal Regulations of the Central Bank of Brazil, annexed to Ordinance No. 84,287, of February 27, 2015, and based on art. 3 of CMN Resolution No. 3,823, of December 16, 2009, to revoke Circular Letter No. 3,429, of February 11, 2010, which clarifies the procedures for the accounting recording of tax obligations under judicial dispute.

2. The proposal for the normative act seeks convergence with the accounting standard International Accounting Standard No. 37 (IAS 37) Provisions, Contingent Liabilities and Contingent Assets issued by the IASB, whose corresponding standard in Brazil is the Technical Pronouncement of the Accounting Pronouncements Committee (CPC) 25 – Provisions, Contingent Liabilities and Contingent Assets, received by Resolution No. 3,823, of December 16, 2009, since Circular Letter No. 3,429, of 2010, by establishing that financial institutions must recognize in their liabilities tax obligations subject to judicial dispute regardless of the assessment of the probability of loss, created an exception to the general rule provided for in CPC 25, by which the provision should only be recognized accounting-wise if it is probable that resources will be required to settle the obligation, and the assessment of this probability must be carried out by the institution itself subject to honoring the obligation in the future.

3. In addition, it is worth clarifying that in compliance with the provisions of art. 5 of Law No. 13,874, of September 20, 2019, Decree No. 10,411, of June 30, 2020, determines that proposals for normative acts of general interest for economic agents formulated by bodies and entities of the direct, autarchic, and foundational federal public administration, as well as by collegiate bodies through the body or entity responsible for providing them with administrative support, must be preceded by a Regulatory Impact Analysis (RIA).

4. In this sense, it is worth noting that, as provided for in item VI of art. 4 of the aforementioned decree, the requirement for RIA does not apply to the normative act that aims to maintain convergence with international standards. Thus, in view of these provisions, the normative instruction now proposed is exempt from the preparation of an RIA.

For your consideration.

Uverlan Rodrigues Primo
Deputy Head

Agreed.

João André Calvino Marques Pereira
Department Head

Resolution No. 222