The Persistent Tax Debtor and the New Challenges of Corporate Tax Management

Tax delinquency and legal certainty in the corporate environment

Tax delinquency has always been present in the daily reality of Brazilian companies, whether as a reflection of economic crises or as the result of occasional cash flow difficulties. In recent years, however, the State has adopted a more active stance in combating the strategic use of tax nonpayment as a business model. In this context, the recent enactment of Complementary Law No. 225/2026, which established the Taxpayer Defense Code, brought the figure of the so-called persistent tax debtor to the center of the corporate legal debate.

The new legislation seeks to distinguish taxpayers facing genuine financial difficulties from those who, in a repeated and structured manner, use tax delinquency to obtain a competitive advantage. Although the objective is legitimate, the practical application of this concept imposes significant risks on corporate management, requiring heightened attention from business owners and executives regarding their tax, financial, and legal strategies.

The concept of the persistent tax debtor and its practical implications

Complementary Law No. 225/2026 defines a persistent tax debtor as a taxpayer whose fiscal conduct is characterized by substantial, repeated, and unjustified nonpayment of taxes, evidencing behavior aimed at non-collection as a permanent strategy rather than as a consequence of temporary economic difficulties. This represents a significant change in the legal treatment of tax delinquency, which is no longer analyzed solely from a quantitative perspective and instead considers the taxpayer’s conduct over time.

In practice, this definition significantly increases regulatory risks for companies that accumulate high tax liabilities, even when part of these debts is under administrative or judicial dispute. The inclusion of tax credits with suspended enforceability in the calculation of delinquency may result in the classification of companies that legitimately exercise their right to defense, bringing legally distinct situations closer together and generating uncertainty for tax planning.

Legal restrictions and impacts on judicial reorganization

One of the most sensitive aspects of the new legal framework concerns the consequences imposed on the persistent tax debtor. The legislation now provides for severe restrictions, including the impossibility of filing for judicial reorganization, the interruption of ongoing reorganization proceedings, and even the conversion of reorganization into bankruptcy at the request of the Public Treasury.

This change represents a significant shift in the Brazilian corporate insolvency system. Law No. 11,101/2005 was designed under the principle of preserving economically viable companies, recognizing default as a risk inherent to business activity. By restricting access to judicial reorganization, the new legal framework signals that the protection afforded by this mechanism does not extend to business models based on recurring tax delinquency.

However, the automatic application of these restrictions may generate undesirable side effects. Viable companies, with productive capacity and job creation potential, may be deprived of essential tools for financial reorganization, which, paradoxically, may compromise the State’s own future tax collection.

Tax compliance and a paradigm shift in the relationship with tax authorities

The Taxpayer Defense Code also introduces a more sophisticated logic in the relationship between tax authorities and taxpayers, inspired by international tax compliance models. The proposal is to encourage cooperative behavior based on transparency, risk management, and timely fulfillment of tax obligations.

In this scenario, compliance programs and good taxpayer certifications take on a strategic role, not merely as formal recognition, but as instruments capable of influencing corporate decision-making. For business owners, the message is clear: tax governance is no longer a purely operational issue and has become a core element of business risk management.

Even though some of the originally proposed incentives have been reduced, the trend is for companies with a history of compliance to receive differentiated treatment in audits, negotiations, and tax settlements. Conversely, repeated delinquent conduct tends to be interpreted as an indication of bad faith, with consequences that go beyond the tax sphere.

Competitive risks and the responsibility of corporate officers

Another relevant aspect of the new legal framework is its competitive impact. The fight against persistent tax debtors seeks to correct market distortions caused by companies that artificially reduce their costs by failing to pay taxes. For managers and corporate officers, this means that aggressive tax decisions may generate not only financial liabilities but also reputational risks and questions regarding compliance with duties of diligence and loyalty in corporate management.

The growing integration between tax law, corporate law, and competition law reinforces the need for preventive action. The absence of adequate internal controls, clear tax compliance policies, and specialized legal monitoring may expose companies and their executives to severe consequences.

The importance of preventive legal counsel

The establishment of stricter criteria for identifying persistent tax debtors represents progress in combating abusive tax delinquency, but it also imposes significant challenges on companies acting in good faith. In an increasingly complex and demanding regulatory environment, tax management cannot be dissociated from overall business strategy.

In this context, preventive legal counsel plays a central role. Continuous analysis of tax liabilities, assessment of legal classification risks, structuring of compliance programs, and the definition of secure strategies for disputing tax assessments are essential measures to preserve business viability and avoid disproportionate consequences.