backComplementary Law No. 225/2026 has been enacted, establishing Brazil’s Taxpayer Protection Code, a nationwide framework governing the relationship between taxpayers and tax authorities. The law was signed by the President of the Republic with vetoes and consolidates taxpayers’ rights, guarantees and duties, while also introducing tax compliance programmes aimed at reducing disputes, increasing transparency and encouraging voluntary compliance with tax obligations.
A central pillar of the Code is the fight against the habitual tax debtor, defined as a taxpayer who maintains substantial, repeated and unjustified non-payment of taxes as a business strategy. The legislation sets out objective criteria for this classification and provides for stricter administrative sanctions, including the loss of tax benefits, restrictions on contracting with the public sector and subjection to more rigorous procedures in administrative tax litigation. All such measures are subject to due administrative process, with full guarantees of the right to be heard and the right to a defence.
In sanctioning the bill, the President vetoed provisions that would have expanded tax incentives and special instalment payment schemes, citing concerns over increased tax expenditure and compliance with the Fiscal Responsibility Law. In addition to measures targeting persistent non-compliance, the law establishes compliance programmes and certification schemes designed to recognise and incentivise compliant taxpayers, reinforcing the distinction between regular taxpayers and those engaged in tax evasion or unfair competition.
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