The government’s proposal to regulate tax reform provides that expenses made by companies on the purchase of vehicles for their employees or health plans will be taxed. This way, the company will not be able to use the taxes it collected on these purchases to appropriate credits and deduct what it owes in other taxes.
The understanding prevailed that these benefits represent indirect wages and, as such, their acquisition must be taxed whether made by the company or directly by the worker.
With 360 pages, the proposal makes reference to other issues related to companies, such as the introduction of a mechanism that can make bank credit cheaper and setting a deadline for returning tax credits.
The introduction of the new dual VAT, replacing the five taxes that currently exist – one of the main changes of the tax reform – has the principle of non-fulfillment, in order to avoid the so-called cascade taxation. Each stage of the chain will only effectively pay tax on the value it added to the product. Thus, if a company purchases an input, for example, it obtains credit with the tax paid, since, in the previous stage of the chain, this item has already been taxed.
According to the government project, however, in the case of expenses with benefits classified as indirect salary, it will not be possible to use the credit.
“If I’m a worker and the company doesn’t give me a health plan, I’ll have to buy it, I’ll pay taxes. If the company contracts the same plan, why wouldn’t it pay tax?”, asked the special secretary for tax reform, Bernard Appy , in an interview yesterday to detail the proposal that lasted nine hours. “It’s a fair thing.”
The information is from the newspaper The State of S. Paulo.
Tags: Government change indirect salary
