In its Ordinary Session yesterday, Thursday, September 12, the Senate did not gather the necessary votes (23 out of a possible 45) to ratify the version of the Tax Reform Bill it sanctioned in its Extraordinary Session of June 19, 2019 and thus reject the amendments introduced by the Chamber of Deputies in its Extraordinary Session of July 10, 2019.

Of the 24 Senators present when the bill was discussed in said session, only 18 voted to ratify the version approved by the Chamber of Senators; consequently, the version approved by the Chamber of Deputies, which should be sent to the President of the Republic in the next few days for his promulgation and publication as law.

It is uncertain how long it would take for the Senate to send the enacted law to the Executive Power, but, judging by the time it would take from one Chamber to the other, it could be estimated that no more than 2 weeks would be necessary for this to happen. Once the President receives the sanctioned law, he has 20 working days to veto it, since it has more than 20 articles.

Once the aforementioned term has elapsed without the Executive Branch having issued an opinion on the Bill enacted as law by the Congress, the same is automatically enacted, pursuant to Article 205 of the National Constitution.

The Tax Reform approved by the Chamber of Deputies has very little chance of being vetoed by the President, since it presents almost no changes with respect to the text presented by the Executive Branch on May 9, when the legislative process began.

The schedule for the entry into force (total or staggered) of the Tax Reform would be set by Decree of the Executive Power within 90 days following its enactment, as set forth in Article 154 of such regulation, and as confirmed by the experience of the entry into force of the major amendments to the tax regime in force occurred with Laws 2421/04 and 5061/13, provided by Decrees 4306/04, 1012/13 and their complements.

According to comments made by some exponents of the Undersecretariat of State for Taxation, the entry into force of almost all the Tax Reform would be planned for January 1, 2020, except for specific issues whose implementation would require more time, such as the rules on transfer pricing, which could enter into force on July 1, 2020, thus replicating what happened with the entry into force of Law 5061/13, which was enacted in October of one year while its tax amendments and the price adjustment entered into force on January 1 and July 1 of the following year, respectively.

Here you can download the text of the Tax Reform Law passed by the National Congress in DOC format.