The Complementary Law No. 225/2026 established the Taxpayer Code and introduced, in the Brazilian tax system, a model of differentiation based on the taxpayer’s fiscal behavior by establishing: “a contumacious debtor is considered the passive subject whose fiscal behavior is characterized by substantial, repeated, and unjustified non-compliance with taxes.”
Therefore, from now on, companies that fail to pay their taxes may be considered contumacious debtors. For this purpose, it should be noted that contumacy requires a certain degree of subjective element and repetition.
To be considered a contumacious debtor, certain requirements must be met. They are:
1. Administrative process: For a company to be considered a contumacious debtor, prior notification is required, as well as the initiation of an administrative process.
2. Substantial debtor: The substantiality requirement will be met when there are tax credits in an irregular situation, registered in active debt or constituted and not paid off, in administrative or judicial scope, with a value equal to or greater than R$ 15,000,000.00 (fifteen million reais) and equivalent to more than 100% (one hundred percent) of its known assets (total assets).
3. Repeated debtor: To be considered repeated, the tax credits must be in an irregular situation in at least 4 (four) consecutive assessment periods, or in 6 (six) alternate assessment periods, within a period of 12 (twelve) months.
4. Unjustified debtor: To be considered unjustified, there cannot be objective reasons that rule out the configuration of contumacy, such as external circumstances involving a state of calamity recognized by public authorities, reporting of negative results in the current and previous financial year – except in cases of indications of fraud or bad faith – and absence of fraud in tax execution (if already initiated), such as non-distribution of profits and dividends, non-payment of interest on own capital, reduction of share capital, or granting of loans or mutual agreements by the debtor.
5. Other situations: A passive subject may also be considered a contumacious debtor if it is a related party of a legal entity that was canceled or declared unfit in the last 5 (five) years with tax credits in an irregular situation whose total amount equals or exceeds R$ 15,000,000.00 (fifteen million reais), whether registered or not in the Federal Government’s active debt, or if it maintains the qualification of contumacious debtor.
The characterization of a company as a contumacious debtor implies a series of sanctions, such as: inability to enjoy tax benefits, prohibition from participating in public bids, and it may even lead to a Judicial Recovery request by the Federal Attorney’s Office.
It is noted that, more and more, it is essential for companies to demonstrate the consistency and accuracy of their registration information and the bookkeeping of tax obligations in order to comply with tax legislation and be able to prove their precarious financial situation in case of non-payment of taxes.
