At the end of January, the Federal Revenue Service of Brazil (RFB) modified its understanding regarding the collection of social security contributions on employer food assistance. Communication of the change was done on the 25th through the publication of Cosit Consultation Resolution 35/19, which is applicable to all companies, whether or not they are enrolled in the Workers' Food Program (PAT)
According to the RFB, with the enactment of the Labor Reform (Law No. 13,467/17) as of November 11, 2017, companies that provide food assistance to their employees by means of a voucher or card are not obliged to include this amount in the calculation basis for social security contributions. Previously, the tax authorities argued that only food assistance provided in natura would be excluded from the calculation basis.
This interpretation favorable to taxpayers innovates in relation to the previous understanding because it considers the prohibition imposed in the wording of article 457, paragraph 2, of the Consolidated Labor Laws (after the reform) refers only to cash payments of the food assistance, such that other forms of payment are not subject to the levying of social security contributions and labor charges.
The issue also generated the Cosit Opinion Letter 04/19, published on January 29, 2019, whereby the RFB clarified that, when the food assistance is paid by both the company and the employee, the treatment of these amount for the purposes of levying social security contributions may be different.
The portion of the food assistance deductible from the employees in a co-participation system will be included in the calculation basis of the social security contributions as part of their remuneration, since the amount discounted constitutes salary of the employees. This interpretation is independent of the treatment given to the portion of the food assistance paid by the company, which may or may not be included in the calculation basis for social security contributions, depending on its remunerative nature defined in accordance with applicable legislation.
Although they were directed to specific taxpayers, the two opinion letters indicated are binding on the RFB and support the actions of other taxpayers, as per article 9 of Normative Instruction No. 1,396/13. Failure to comply with these guidelines may result in assessments of taxpayers and rejection of any offsets.
There are sound legal bases for it to also be recognized that, in the period before the Labor Reform, the benefit of food assistance provided through vouchers or card in the context of the PAT is not subject to taxation through social security contributions, in accordance with applicable regulations. The legal basis would be different from that found in Cosit Opinion Letter 35/19, supported on the social security legislation itself and the regulations of the PAT.
With regard to employee co-participation, although the debate is still incipient and controversial, there are already judicial decisions favoring exclusion of these amounts from the calculation basis of social security contributions, which has legal support in an interpretation of the text of the law and the compensatory and assistance nature of the benefit.
In view of this scenario, it is advisable for the companies to evaluate the treatment given to the payments in question and to check on the existence of excess collection or even exposure, which requires adjustment of procedures or the use of preventive measures.