Tax legislation grows in complexity daily. As much as the taxpayer has a trained personnel to carry out routine tax tasks, the team will not be able to perform their tasks and, at the same time, follow the change and evolution of the understanding of the legislation.

Unless the entrepreneur seeks specialized external support, errors or blunders in calculating taxes will inevitably occur, causing losses to the company.

To understand tax refunds and tax credits, it is important to keep in mind that every tax is calculated by applying a rate, usually as a percentage, on a calculation basis. The different tax legislation rules stipulate the rates and the basis for calculating the tax for the taxpayer's activities. Errors in these two items may result in variations in the tax collected, exposing the entrepreneur to risks and losses.



What are tax refunds and tax credits?

The recovery of tax credits may improve the company's results.

Recovering duties and tax credits aims to identify the items among costs, expenses, and revenues that may reduce the tax calculation base or the tax rate and that is not being effectively utilized by the company, and, therefore, allows the company to recover amounts unduly paid in recent years, as well as adjust the calculation for the future.

A study for the recovery of duties and tax credits can be carried out for virtually all taxes incurred by business activities, emphasizing PIS/COFINS, IRPJ/CSLL, and ICMS taxes.

The reduced tax disbursement is immediate, just by adjusting their calculation. The following are examples of items central to the activity of most companies that go unnoticed, resulting in loss of tax credits:

• PIS/COFINS proportional credit on the energy bill, considering only the energy related to the productive activity;

• Treatment of any bonuses as non-deductible from the IRPJ and CSLL;

• Disregard of materials worn in the industrial process for purposes of calculating ICMS credits;

• Scope of the concept of inputs in the productive activity, aimed at PIS, COFINS, and other credits.


The credit authorizing concepts used in irrigation tax legislation are subjective. That is, there is no formula that the entrepreneurs may apply to their activities. The items above are mere examples and require a detailed analysis of the operation to verify the items that will translate into tax savings for the entrepreneur on a case-by-case basis.