PAT: new rule limits the deduction of the expenses


In brief 

Please be advised that, on November 11 2021, the Decree 10,854/2021 was published to change the rules applicable to the deduction of the expenses related to the Workers Meal Program (Programa de Alimentação do Trabalhador – “PAT”) from the basis of the Corporate Income Tax (“IRPJ”).

More details

Indeed, said Decree changed the wording of article 645 of the Income Tax Regulation – RIR / 2018, as follows:

  1. In case of granting of tickets, only the expenses related to employees with salary of up to 5 (five) minimum wages are deductible;
  2. In case of the granting own meal service, the deduction may be related to the expenses of all workers;
  3. The deduction is limited to the expenses of up to 01 (one) minimum wage per employee;

These limitations were created to reduce the Federal Government’s tax waiver and may significantly affect several taxpayers.
Based on case law, the publication of said Decree may lead the companies to challenge in court both (i) the disrespect to the principle of legality; and (ii) disrespect to the principle of anteriority, because the change takes effect from 12/2021 and not just in the following year.
Therefore, we alert to the need for companies to verify the convenience of filing a judicial measure on the matter, depending on the details of the specific case, being our team totally available to assist you.
This e-alert is a general review of the subjects discussed above and does not constitute a legal opinion or legal consult.

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