Disclosure of the “Accident Prevention Factor” – FAP applicable to 2021
On September 24, 2020, it was published on the Official Journal (DOU) the Law No. 175/2020, effective as of the date of publication, which provides for rules for the rules regarding the Municipal Service Tax (ISS) payment to both the Municipality of the provider establishment and the Municipality of residence of the borrower, regarding health plan services, medical-veterinary care and assistance plans, fund administration, consortiums, credit and debit cards and leasing.
The split payment will be gradually reduced, so that, as of 2023, 100% of the ISS paid will belong to the Municipality where the borrower of the services is domiciled. The project seeks to fix the rules brought by Law No. 157/2016, which, despite bringing similar provisions on the place of tax collection on these services, had its effects suspended by the Supreme Court in March 2018.Please be advised that, on September 30 2020 (Wednesday), the Social Security Department website released on the Internet, the new “Accident Prevention Factor” (“FAP”) rate for each company, which will have a direct impact on company’s payroll social contributions for the year 2021.
FAP is a multiplication factor – that varies from 0,5 to 2,0 points) applied upon the tax rate of the “Labor Accident Contribution” (“SAT”) and it is calculated based on the frequency, level of importance, and treatment cost of the labor illnesses and labor accidents of each company.
Thus, in order to obtain the SAT rate for the year 2021, the taxpayers must multiply the SAT rate by the FAP released.
Example of Calculation:
- Company’s branch SAT = 3%
- Company’s branch FAP = 1.5
- SAT for 2021: SAT x FAP = 3 x 1.5 = 4.5%
Accordingly, the companies that present low incidence of labor illnesses and accidents (consequently, low FAP) may reduce their SAT tax rate (either 1%, 2% or 3%) down to 50% (fifty per cent), according to the security measures adopted by the company.
On the other hand, the legal entities that present high incidence of labor illnesses and accidents (consequently, high FAP), may suffer the increase of their SAT tax rate, up to 100% (a hundred per cent).
Therefore, we alert that each company should verify its FAP rate applicable to 2021 as well as verify and analyze the list (released with the FAP) of labor accidents and illnesses occurred during this period.
In addition, we also inform that FAP rate will be individually calculated for each of the company’s branch that has its on CPNJ register.
The consultation of the FAP applicable to 2021 is made through the link:
https://www2.dataprev.gov.br/FapWeb/pages/login.xhtml.
In order to have access to its personal data on the website, the company must present its register number before the Federal Revenue Department (“CNPJ”) and the pin code provided by the Social Security Agency.
In case the company disagrees with the data disclosed by the Social Security Ministry (in which was based the FAP calculation), the company will be allowed to file an administrative defense before the Department of Health Politics and Labor Security (Social Security Ministry Department) during the period of November 01 to November 30, 2020, through an electronic form available on the Social Security Department website on the Internet.
The rules are the same as from FAP 2020, being relevant emphasize the following determinations: (i) the exclusion of work-related accidents without benefits (leave of 15 days or less), with the exception of cases with employee’s deaths, (ii) a reduction of 15% of the FAP that exceeds 1 (malus range) and that there were no cases of death or permanent disability in the first year of the base period, and (iii) that it will not be possible to avoid the limitation of the bonus by the Union.
Finally, we stress that the companies may also challenge the application of FAP on the Judicial level, as well as the unduly increase of the SAT tax rate occurred in 2009.
This e-alert is a general review of the subjects discussed above and does not constitute a legal opinion or legal consult.
