Important changes have been made to the Judicial Reorganisation Law
On March 18 2021 the Brazilian Congress analysed the vetoes made by President Jair Bolsonaro to the provisions of Law 14,122/2020, approved on December 24 2020, which made important changes to the Judicial Reorganisation Law (Law 11,011/05).
Taxes losses
In total, 12 of the 14 presidential vetoes were overruled by Congress, and two of them (Article 6-B and Article 50-A) are specifically relevant from a tax perspective.
The first refers to the possibility of fully using taxes losses, without the 30% limitation, over net income resulting from capital gains from the disposal of fixed assets or rights by the legal entity under judicial reorganisation. As an exception, this does not apply for capital gains resulting from transactions with related entities and with an individual who is a controlling shareholder, partner, owner, or administrator of the legal entity which is the debtor.