Foxbit records a 40% drop in revenue due to the coronavirus pandemic. Some entities in Brazil do not yet consider the coronavirus to be a public calamity.
The government of Brazil refuses to accept the request from Foxbit, a cryptocurrency exchange house from that South American country, not to be listed in the register of income tax debtors for a period of up to 3 months.
Foxbit made the request because the current coronavirus pandemic crisis has had an impact of about 40% on its operating income. The exchange house intended to receive a 90-day extension to be able to pay its income taxes. The economic situation of the company is complicated since it must pay three other tax contributions to the State.
The Brazilian Federal Justice made that decision since companies do not receive the extension of time to pay their income taxes unless the National Simple governs them. It is a tax regime, regulated by the Complementary Law of Brazil, which unifies the payment of various taxes in a single guide and allows the payment of lower rates.
Cristiane Farias Rodrigues dos Santos, Judge of the Ninth Federal District Court of São Paulo, made comments regarding this situation. She explained that a moratorium allows the extension of the time beyond the final deadline stipulated for the payment of a debt, which causes the suspension of the tax credit requirement. However, she clarified that there is a universal dependence on the law. For this reason, the Judiciary cannot act as a positive legislator, benefiting only one party, individually.
Repercussions Mainly Due to Coronavirus Pandemic
As a consequence of the government’s decision, Foxbit made referred to ordinance number 12/2012. This document deals with the extension of time to pay federal taxes in cases of recognition of a public calamity. But Farias explained that the Federal Tax Service and the Office of the Attorney General of the National Treasury should take action to make this possible.
Both organizations must issue the necessary acts and establish the municipalities covered by the state decree of recognition of a public calamity. The judge has stated that this has not yet happened despite the coronavirus situation. Therefore, Foxbit will not receive the extension of time that they requested to pay their income taxes.
Given the decision made by the government of Brazil, Foxbit declared that it will comply with all its tax obligations. However, they also assured that they are considering the possibility of appealing the decision that the country’s regulatory agencies made.
It is important to note that the government of Brazil had previously taken actions regarding the payment of income taxes and the situation that has generated the coronavirus pandemic globally. In this sense, the Brazilian Tax Agency had decided to postpone the term for the declaration of Income Tax, initially scheduled for April 30th, until June 30th.
By Alexander Salazar
