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Covid-19 Pandemic and its Legal Impacts in Brazil
We list below the principal measures announced by the Federal Government and governmental agencies as a result of the COVID-19 pandemic.
We recommend that our clients seek legal advice on specific cases. We remain at your disposal for any clarification or guidance that may be necessary.
Civil Aspects
Passengers who decide to postpone their journey are exempt from the contractual penalty if they accept a credit for the purchase of a new ticket within 12 months from the date of the original flight. If they decide to cancel, they are subject to the contractual rules of the ticket already bought. The period for reimbursement of air fares will be 12 months, pursuant to Provisional Decree no. 925/2020.
In the case of cancellation of services, reservations and events, the provider is not obliged to reimburse the consumer, provided he guarantees the availability of a credit for use or deduction on the purchase of other services, reservations or events, or makes another agreement with the consumer, at no additional cost. The credit may be used in the period of 12 months as from termination of the state of public calamity or, if possible, the events should be rescheduled also during this same period, as per Provisional Decree no. 948/2020.
Bill no. 1.179/2020*
*Awaiting final approval by Congress
Deadlines in general: limitation periods are suspended until October 30, 2020.
Force majeure: the date of March 20, 2020 was fixed as the beginning of the legal effects of the pandemic, force majeure not being applicable to anything prior to that date.
Inflation and foreign exchange variations: increase of inflation, exchange variations, devaluation or substitution of the monetary standard are not considered unforeseeable events.
Consumers: suspended until October 30, 2020 application of art. 49 of Consumer Defense Code (possibility of withdrawing from contract within 7 days from signature or from receipt of the product or service) in event of product or service purchased by home delivery, goods that are perishable or for immediate consumption, and medicines.
Leases: orders to quit urban property will not be granted in eviction proceedings until October 30, 2020.
Acquisitive prescription: periods for acquisition of real or personal property by the various types of adverse possession are suspended until October 30, 2020.
Alimony: imprisonment for non-payment of alimony may only take the form of house arrest.
Estate proceedings: the period for commencing estate proceedings is extended until October 30, 2020, for successions opened as from February 1, 2020.
General Law for Protection of Data: the deadline for coming into force of the General Law for Protection of Data (LGPD) has been extended to January 1, 2021, and the period for the start of application of sanctions relating to cases of breach of the said law has also been extended to August 2021.
Corporate aspects
The deadline for ordinary general meetings and annual partners’ meetings has been extended to seven months as from the end of the fiscal year, this rule being valid only for companies whose fiscal year ends between December 31, 2019 and March 31, 2020, pursuant to Provisional Decree no. 931/2020.
The period of 30 days for submitting corporate documents subject to filing and signed as from February 16, 2020 will start to run from the date on which the Commercial Registries resume their activities, in order to preserve the retroactivity of their effects in relation to third parties from the date of their signature, pursuant to Provisional Decree no. 931/2020.
Shareholders of closed capital corporations and partners of limitadas and cooperatives may participate and vote at a distance in meetings, pursuant to Provisional Decree no. 931/2020. In accordance with Normative Instruction no. 79/2020 of the National Department of Business Registration and Integration (DREI), the meetings of closed capital corporations, limitadas and cooperatives may be held at a distance or online, although the rules for calling and installing meetings and passing resolutions must obey the rules contained in the statutes or articles of association, and the notice of the meeting must state whether the meeting will be held at a distance or online. Open capital corporations already possess such authorization, in accordance with the regulations of the Securities Commission (CVM).
Labour aspects
It is permitted to grant collective vacation to employees, by means of obligatory 48 hours’ prior notice to the employees and without the need for prior communication to the Ministry of the Economy or the appropriate trade union, pursuant to Provisional Decree no. 927/2020.
Anticipation of individual vacations is authorized, even if the employee has not completed the minimum reference period, with priority for workers in the COVID-19 risk group, pursuant to Provisional Decree no. 927/2020.
It is permitted to suspend the vacation of employees in the health area or other areas considered essential, pursuant to Provisional Decree no. 927/2020.
It is permitted to bring forward public holidays, by means of at least 48 hours’ prior notice, except for religious holidays, for which a formal agreement with the employee is essential, in accordance with Provisional Decree no. 927/2020.
Teleworking is authorized, including for apprentices and trainees, pursuant to Provisional Decree no. 927/2020.
It is possible to institute an “hour bank” (compensatory time), by means of formal collective negotiation or individual agreement, allowing the compensation of rest for work up to 18 months after the end of the public calamity, pursuant to Provisional Decree no. 927/2020.
Healthcare establishments may enter into an individual agreement in writing to extend the working day, even when the activities are considered insalubrious and when working hours consist of 12 hours’ work for 36 hours’ rest, pursuant to Provisional Decree no. 927/2020.
Except in cases of risk, occupational, clinical and complementary examinations are suspended, except for workers dismissed, pursuant to Provisional Decree no. 927/2020.
Cases of contamination by COVID-19 shall not be treated as a work accident, without proof of a causal link between the illness and the job performed, in accordance with Provisional Decree no. 927/2020.
Reduction of the working day is authorized with a proportional reduction of salary, in percentages of 25%, 50% and 70%, for a maximum period of 90 days. Depending on the employee’s salary and the reduction imposed, the agreement may be individual or collective. The employee will receive an Emergency Benefit for Preservation of Employment and Income, paid by the Federal Government, which will be calculated at a percentage identical to that of the reduction, subject to the maximum unemployment insurance to which the employee would be entitled if discharged by the company. The employee will have his job guaranteed during the term of the agreement and for a similar period thereafter. Companies may pay or provide compensatory assistance to the employee, in the form of an indemnity, as per Provisional Decree no. 936/2020.
It is permitted to suspend a work contract for not more than 60 days, split into two periods of 30 days. This measure may be adopted by means of an individual or collective agreement. The employee will be guaranteed his job during the term of the agreement and for an equal period thereafter. The employee will remain entitled to the usual benefits granted by the company. The employee will receive an Emergency Benefit for Preservation of Employment and Income, paid by the Federal Government, which will be 100% of the maximum unemployment insurance to which the employee would be entitled if discharged by the company. Companies whose earnings exceed 4.8 million reais in the year 2019 are obliged to provide compensatory assistance of 30% of the employee’s salary, in the form of an indemnity, pursuant to Provisional Decree no. 936/2020.
Some businesses, depending on their revenues, may have access to a special line of credit instituted by the Emergency Insurance and Employment Programme, with reduced interest rates and charges, pursuant to Provisional Decree no. 944/2020.
Temporary port workers who present symptoms of COVID-19, or have contamination confirmed, may not be selected for work by “OGMO” (Managing Labor Authority), which must produce to the port authority a list of the temporary workers affected. These will be entitled to receive a monthly compensatory indemnity equivalent to 50% of the average monthly wage that they received through OGMO, during the period between October 1, 2019 and March 31, 2020, pursuant to Provisional Decree no. 945/2020.
The PIS-Pasep Fund will be transferred to the accumulated FGTS fund. The worker may withdraw his FGTS, up to the limit of R$ 1.045,00, together with the accumulated PIS- Pasep fund, pursuant to Provisional Decree no. 946/2020.
Tax Aspects
Possibility of special transaction on collection of overdue federal tax liability and suspension of deadlines and administrative collection measures, by means of Portarias no. 7.820/2020 (amended by Portaria no. 8.457/2020) and no. 7.821/2020 of the Attorney-General of the National Treasury (PGFN).
Suspension of all procedural deadlines in administrative tax proceedings handled by the Brazilian Federal Revenue until May 29, 2020, through Portaria no. 543/2020 of the Brazilian Federal Revenue (RFB).
Extension of deadline for payment of federal taxes under the Simples Nacional system by means of Resolution no. 152/2020 of the Simples Nacional Management Committee (CGSN).
Reduction to zero of rates of Import Duty on merchandise for medical and hospital use described in Sole Schedule to CAMEX Resolution no. 17/2020 and of the Tax on Industrialized Products until September 30, 2020, pursuant to Decree no. 10.285/2020.
Facilities on the customs clearance of imported medical and hospital products, when intended for the combat against COVID-19, making possible the delivery and use of such products prior to conclusion of the customs check, through Normative Instruction no. 1.927/2020 of the Brazilian Federal Revenue (RFB).
Deferment of payment of FGTS by employers, relating to the months of March, April and May of 2020, as per Provisional Decree no. 927/2020.
Extension until June 30, 2020 of deadline for submission of Income Tax Return for Individuals, as per Normative Instruction no. 930/2020, for submission of Final Declaration of Estate and for Tax Return on Finally Leaving the Country, and any payment of tax assessed, as per Normative Instruction no. 1.934/2020, both of the Federal Revenue of Brazil.
Reduction of contributions to “System S” (contributions of interest to professional categories) for 3 (three) months, pursuant to Provisional Decree no. 932/2020.
Extension of time to pay Employer’s Welfare Contribution (CPP), contribution to PIS/PASEP and COFINS, pursuant to Portaria no. 139/2020 of the Ministry of the Economy.
Postponement of time for submission of DCTF and EFD-Contributions, as per RFB Normative Instruction no. 1.923/2020.
Extension of time for payment of Agroindustry Welfare Contribution, of Funrural and Welfare Contribution on Gross Income, pursuant to Portaria no. 150/2020 of Ministry of the Economy.
Suspension of immigration deadlines as from March 16, 2020, the period starting to run again at the end of the public health emergency situation, with new instructions from the General Coordination of Immigration Police, as per the internal rules of the Federal Police.
We remain at your disposal for any further explanation/clarification that you may require.
São Paulo, April 20th, 2020.
Adolpho Smith de Vasconcellos Crippa
adolpho.smith@stussinevessp.com.br
Patrícia Giacomin Pádua
patricia.padua@stussinevessp.com.br
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