Countries › Brazil › Guide › 6. Taxes › Tax audits, penalties and limitation periods in Brazil: how a federal audit starts, what it costs and the 2026 Tax Code reform

Tax audits, penalties and limitation periods in Brazil: how a federal audit starts, what it costs and the 2026 Tax Code reform

Argentina. For full detail on Argentina, go to The Argentine Thread.

Last verified: 2026-10-27 · Status: Changing

A federal tax audit starts with a written act notified to the taxpayer, which ends the right to make a voluntary disclosure; the act is valid for 90 days and renewable, and an assessment can be paid or challenged within 20 business days. Penalties on assessed tax are 75 percent, 100 percent where fraud, evasion or collusion is proven and 150 percent for repeat offenders, plus Selic interest; paying within 30 days of notice cuts the penalty by half, and late payment without an audit costs 0.33 percent a day up to 20 percent. Complementary Law 236 of 4 September 2026 wrote these caps and reductions into the National Tax Code for all levels of government, kept the five year limitation periods, and gave states and municipalities two years to align.

USD figures use the Banco Central do Brasil PTAX selling rate of R$5.5007 per US dollar for 26 October 2026, the latest rate published when this page was verified. Conversions are for orientation only; the rate on the day of each FX contract will differ.

Key facts

Federal penalty on tax assessed by the authority, standard	75 %Law 9,430/1996 art. 44 item I, as of 2026-10-27 · in force
Federal penalty with proven evasion, fraud or collusion	100 %Law 9,430/1996 art. 44 § 1 item VI, as of 2026-10-27 · in force
Federal penalty for repeat fraud within 2 years	150 %Law 9,430/1996 art. 44 § 1 item VII, as of 2026-10-27 · in force
Late payment fine per day	0.33 % per dayLaw 9,430/1996 art. 61, as of 2026-10-27 · in force
Late payment fine cap	20 %Law 9,430/1996 art. 61 § 2, as of 2026-10-27 · in force
Penalty reduction if assessment paid within 30 days	50 %Law 8,218/1991 art. 6 item I, as of 2026-10-27 · in force
Deadline to challenge a federal assessment	20 business daysDecree 70,235/1972 art. 15, as of 2026-10-27 · in force
Validity of the act starting a federal audit, renewable	90 daysDecree 70,235/1972 art. 7 § 2, as of 2026-10-27 · in force
Limitation period to assess tax	5 yearsNational Tax Code arts. 150 § 4 and 173, as of 2026-10-27 · in force

The rule

1. Start of an audit: the procedure begins with the first written act of a competent official notified to the taxpayer, the seizure of goods, documents or books, or the start of customs clearance. From then the taxpayer loses spontaneity for earlier acts. The written act is valid for 90 days, renewable for equal periods by any written act showing the work continues.Decree 70,235 of 6 March 1972, as amended by Complementary Law 227 of 13 January 2026, Art. 7 items I to III, §§ 1 and 2, 2026-01-13 official text · verified 2026-10-27 · changed: Complementary Law 227/2026 extended the validity of the act starting an audit from 60 to 90 days.

2. Audit plan disclosure: every audit must be preceded by a document stating its start, the authorities involved, the scope and period, the records required, the authentication method and its duration, and a copy must be delivered to the taxpayer or its representative.National Tax Code (Law 5,172/1966), art. 196 as worded by Complementary Law 236 of 4 September 2026, Art. 196 and § 3, 2026-09-04 official text · verified 2026-10-27 · changed: Complementary Law 236/2026 rewrote art. 196 of the National Tax Code.

3. Assessment and deadline: the notice of infraction must state the facts, the provision breached, the penalty, and the demand to pay or challenge within 20 business days; a challenge (impugnação) must be filed in writing with supporting documents within 20 business days of notice.Decree 70,235/1972, as amended by Complementary Law 227/2026, Arts. 10 and 15, 2026-01-13 official text · verified 2026-10-27 · changed: Complementary Law 227/2026 changed the deadlines from 30 days to 20 business days.

4. Federal assessment penalties: 75 percent of the tax for non payment, failure to file or an inaccurate return; 100 percent where conduct under arts. 71 to 73 of Law 4,502/1964 (evasion, fraud, collusion) is established, and 150 percent for a repeat offence within 2 years; the qualified penalty does not apply unless intentional conduct is individualized and proven, or after a criminal acquittal on the merits. A separate 50 percent isolated penalty applies to missed monthly IRPJ and CSLL estimate payments.
Cost to do it: 75 percent of the tax assessed, before reductions
Example: Tax assessed R$1,000,000: penalty R$750,000 / Tax of US$181,795.04: penalty US$136,346.28Law 9,430 of 27 December 1996, as amended by Law 11,488/2007 and Law 14,689 of 20 September 2023, Art. 44 items I and II, §§ 1 items VI and VII, 1-A and 1-C, 2023-09-20 official text · verified 2026-10-27 · changed: Law 14,689/2023 lowered the qualified penalty from 150 to 100 percent, keeping 150 percent only for repeat offenders.

5. Penalty increased by half for failure to answer notices within the deadline, to present electronic files and systems, or to present transfer pricing technical documentation.Law 9,430/1996, as amended by Law 11,488/2007, Art. 44 § 2 items I to III, 2007-06-15 official text · verified 2026-10-27

6. Penalty reductions on federal assessments: 50 percent if paid or offset within 30 days of notice of the assessment; 40 percent if an instalment plan is requested within that period; 30 percent if paid within 30 days of notice of the first instance decision; 20 percent if instalments are requested within that period.
Example: Penalty of R$750,000 paid within 30 days: R$375,000 plus tax and Selic interest / Penalty of US$136,346.28 cut to US$68,173.14Law 8,218 of 29 August 1991, art. 6 as amended by Law 11,941 of 27 May 2009, Art. 6 items I to IV, 2009-05-27 official text · verified 2026-10-27

7. National caps and reductions for all levels of government: penalties must be proportionate; fines tied to a tax amount may not exceed 75 percent of the tax as a general rule, 100 percent with proven fraud, evasion or collusion, and 150 percent for recidivism. Reductions of 50, 40, 30 and 20 percent apply for payment or instalments within, or after, the challenge period and before registration as active debt, rising to 60, 50, 40 and 30 percent for taxpayers in compliance programmes; no reduction for a habitual defaulter (devedor contumaz). The Union, states and municipalities have 2 years to align their laws.National Tax Code, arts. 113-A and 142 §§ 5 to 10, and art. 211-A, inserted by Complementary Law 236 of 4 September 2026, Arts. 113-A § 1, 142 §§ 5 to 10, 211-A, 2026-09-04 official text · verified 2026-10-27 · changed: Complementary Law 236/2026, in force on publication, set national penalty caps and reductions; state and municipal laws must adopt at least the art. 142 § 5 criteria within 2 years.

8. Voluntary disclosure: a taxpayer who discloses an infraction and pays the tax with late interest, or deposits the amount set by the authority when assessment is needed, is relieved of liability including the late payment fine; disclosure after any audit or administrative procedure on the infraction has started does not count.National Tax Code, art. 138 as worded by Complementary Law 236/2026, Art. 138 and sole paragraph, 2026-09-04 official text · verified 2026-10-27 · changed: Complementary Law 236/2026 rewrote art. 138, expressly excluding the late payment fine on a valid disclosure.

9. Late payment without an audit: a late payment fine of 0.33 percent per day from the day after the due date, capped at 20 percent, plus interest at the Selic rate accumulated monthly and 1 percent in the month of payment. Taxes already declared can be paid within 20 days of receiving the notice starting an audit with only the charges applicable to spontaneous payment.
Cost to do it: Up to 20 percent fine plus Selic interestLaw 9,430/1996, Art. 61 caput and §§ 1 to 3; art. 5 § 3; art. 47, 1996-12-27 official text · verified 2026-10-27

10. Limitation periods: the right to assess expires 5 years from the first day of the year following the one in which the assessment could have been made; for self assessed taxes, 5 years from the taxable event, also where only part of the tax was paid; with fraud, wilful misconduct or simulation, the count follows the first rule. The action to collect expires 5 years after final assessment, interrupted by events that now include mediation, tax arbitration and extrajudicial enforcement.National Tax Code, arts. 150 §§ 4 to 6, 173 and 174 § 1, as amended by Complementary Law 236/2026, Arts. 150 §§ 4 to 6, 173, 174 § 1 items I to IX, 2026-09-04 official text · verified 2026-10-27 · changed: Complementary Law 236/2026 added art. 150 §§ 5 and 6 (fraud and partial payment) and new interruption events in art. 174 § 1.

Option	Penalty	Tax plus penalty
Pay within 30 days of notice	R$375,000	R$1,375,000
Instalments requested within 30 days of notice	R$450,000	R$1,450,000
Pay within 30 days of first instance decision	R$525,000	R$1,525,000
Instalments within 30 days of first instance decision	R$600,000	R$1,600,000
No reduction	R$750,000	R$1,750,000

Cost of a federal assessment of R$1,000,000 of tax, by timing of payment (Law 9,430/1996 art. 44; Law 8,218/1991 art. 6); Selic interest is added in every case

Worked example

An audit assesses R$1,000,000 (US$181,795.04) of IRPJ on a disallowed deduction, without fraud. The 75 percent penalty is R$750,000. Paying within 30 days of notice cuts it to R$375,000, for a total of R$1,375,000 (US$249,968.19) plus Selic interest; challenging and losing at first instance and then paying leaves a penalty of R$525,000.
If the same gap is found and paid before any audit starts, voluntary disclosure removes the penalty: the company pays the tax plus Selic interest only.

Step by step

1. When a notice arrives, log the date: the 90 day validity, the 20 business day windows and the 30 day reduction window all run from notices.
2. Stop any planned voluntary disclosure on the audited items: spontaneity ends with the start of the audit.
3. Within 20 days of the start notice, pay any tax already declared but unpaid to avoid the 75 percent penalty on it.
4. Answer every request by its deadline; missing one raises the penalty by half.
5. Decide within the reduction window whether to pay (50 percent cut) or challenge; model the outcome with the CARF timeline.
6. Keep records for at least the 5 year limitation periods, longer where losses or fraud claims are possible.

Common traps

A routine written request from the Federal Revenue starts the audit and ends the right to a penalty free disclosure.
The 30 day reduction window in Law 8,218 runs in calendar days, while the challenge period is 20 business days; they are not the same date.
Missing a monthly IRPJ or CSLL estimate triggers a separate 50 percent isolated penalty even if the year closes with a loss.
Proven fraud lengthens the effective limitation period, because the count starts only on the first day of the following year.
State and municipal penalties may still exceed the national caps until each government aligns its law within the 2 year window of Complementary Law 236/2026.

Sources

Related: Brazil country profile · live dashboard · central bank and release calendar · our posts on X · where Argentina is involved, see The Argentine Thread guide

← Taxing digital services in Brazil: no separate digital services tax, but ISS, import contributions, CIDE and the new platform rulesGlobal minimum tax in Brazil: the CSLL surcharge (Adicional da CSLL) for groups with EUR 750 million of revenue →