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07 August 2013
Provisional Presidential Decree 601/2012 is no longer in force, after Congress failed to approve it within 120 days. The president of the board of Congress has therefore issued Declaratory Act 36/2013, which sets forth that the decree expired on June 3 2013.
Provisional Decree 601/2012 had stipulated a number of rules, including:
With the expiration of Provisional Decree 601/2012, these rules no longer apply. As a practical consequence of this change, those working in the construction, retail, maintenance and repair of vessels would have reverted to the payroll taxation system.
However, on April 4 2013 Decree 612 was issued, which mitigated the expiration of Provisional Decree 601/2012 by including several sectors in the social security contribution on gross revenues - among them:
Thus far, the 3.5% withholding rate on services rendered on the assignment of manpower set forth in Article 8 of Law 12.546/2011 has not been restored. As a consequence, unless a new legal provision restores this reduced percentage, such activities will revert to being subject to 11% withholding tax from June 2013 onwards, even if the contribution due is 1% on receipts, leading to a significant overpayment. There are sound legal arguments in relation to such excessive taxation with the purpose of voiding it.
The services set forth in Article 8 of Law 12.546/2011 include:
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