Tax debt in judicial reorganization: what the plan does not cover

Quick answer: the tax claim is not subject to the recuperação judicial (judicial reorganization) plan or to novation, and the execução fiscal (tax foreclosure) is not suspended by the granting of processing. In return, Law 14.112/2020 created a federal installment plan of up to 120 months and a transação tributária (tax settlement) for the debtor in reorganization, and the STJ began to require tax regularity as a condition of the grant.

Almost every company that reaches judicial reorganization arrives with a relevant tax liability on its back. It is common: when cash tightens, the tax bill tends to be the first one the company stops paying, because it seems to make the least immediate noise. The problem is that tax debt in judicial reorganization does not follow the same logic as the other claims. While suppliers, banks and employees enter the plan and negotiate deadlines and discounts, the Tax Authorities follow a parallel track, with their own rules and a power of constraint that is not erased by the granting of processing.

Understanding this separation is what avoids the most frequent trap. The business owner approves a well-designed plan, breathes with relief, and discovers months later that the Treasury keeps enforcing, that the court will demand tax certificates at the moment of the grant, and that the dormant tax liability comes back to dictate the direction of the proceeding. The good news is that Law 11.101/2005, reformed by Law 14.112/2020, also opened specific tools to handle this liability. They exist, but they need to be triggered deliberately, not discovered on the eve.

Why the tax claim is not covered by the plan

The starting point is in the National Tax Code (Código Tributário Nacional). Art. 187 expressly excludes claims of a tax nature from the effects of judicial reorganization. Add to this the Tax Foreclosure Law, and the design becomes clear: the tax claim is not subject to the concurrence of creditors, is not reached by the novation the plan promotes, and cannot have its amount renegotiated within the creditors' meeting. The Tax Authorities do not vote on the plan and are not bound by it.

In practice, this means that the tax liability survives the reorganization plan intact. All the effort of discounts, grace periods and re-installments negotiated with the private creditors simply does not reach the Union, the state or the municipality. The table below summarizes the difference in treatment that confuses so many business owners right at the start.

This is the origin of a costly mistake. The company concentrates energy on the plan, treats the tax as if it were just another creditor to be diluted, and leaves the tax liability without an address. When the proceeding advances, this hole reappears, and it reappears at the worst possible moment.

The tax foreclosure does not stop: what the reorganization court can do

Because the tax claim stays outside the plan, the tax foreclosure also stays outside the stay period. This is what art. 6, §7-B, of Law 11.101/2005 says, added by Law 14.112/2020: the tax foreclosure is not subject to the suspension of the running of the statute of limitations, the suspension of enforcement actions against the debtor, or the prohibition of acts of constraint. Put plainly, the granting of processing suspends the collections of private creditors, but the Treasury may keep enforcing, entering debts into the active debt registry (dívida ativa) and pursuing attachment.

There is, however, an important brake, and it is the heart of the practical dispute on this topic. The same §7-B reserves the jurisdiction of the reorganization court to order the substitution of the acts of constraint that fall upon capital goods essential to the business activity (bens de capital essenciais), until the reorganization ends. The Superior Court of Justice (STJ) has been applying this rule with surgical precision: the tax foreclosure court decides on the blocking, but it falls to the reorganization court, when the attachment reaches an asset without which the company cannot produce, to order that it be replaced by another guarantee. The purpose is to prevent tax collection from emptying precisely the assets that keep the company running and, with it, the chance of all creditors being paid.

A capital good (bem de capital), in this context, is the tangible asset employed in the productive process, neither perishable nor consumable: the warehouse, the machine line, the fleet. It is not money in an account or inventory for resale. This distinction defines, case by case, what the reorganization court can protect and what remains within reach of the tax attachment. It is one of the points where technical work in tax foreclosure makes a concrete difference in the proceeding.

The reform's tools: installment plan and settlement

Law 14.112/2020 did not leave the debtor without a way out for the tax liability. On the contrary, it reformed Law 10.522/2002 and designed instruments conceived specifically for the company in reorganization. There are two paths, and choosing between them is a decision of strategy, not of paperwork.

The first is the federal installment plan (parcelamento). Under art. 10-A of Law 10.522/2002, the business owner or business company that files for or is granted judicial reorganization may pay its debts with the National Treasury in up to 120 monthly installments, against the 84 of the previous regime. The installments are staggered, starting at smaller percentages of the consolidated debt and growing over time, and the law also allows part of the balance to be settled with tax loss credits and negative CSLL basis. It is a relevant lengthening for those with tight cash flow in the first years of the restructuring.

The second is the tax settlement (transação tributária), provided for in art. 10-C of Law 10.522/2002 and governed by Law 13.988/2020. Unlike the installment plan, which only lengthens payment, the settlement allows negotiating the very amount of the registered debt, with a term that also reaches 120 months and a reduction that may reach 70% of the debt for the debtor in reorganization. It is not an automatic discount or a guaranteed right: it depends on a proposal, on an analysis of the company's payment capacity, and on fitting into the modalities opened by the Attorney's Office (Procuradoria). The table helps separate the two instruments.

A warning that many ignore is worth making: default on the tax installment plan has a serious consequence. Law 11.101/2005, in the wording of the reform, provides that failing to honor the installment plan may lead to the conversion (convolação) of the reorganization into bankruptcy (falência). In other words, adhering without real breathing room to pay the installments does not solve the problem, it only transfers the risk forward. The detailing of each modality is in the material on the PGFN installment plan and tax settlement.

Tax regularity became a condition of the grant

Here is the turning point that changed the strategy of every reorganization in recent years, and the one that most surprises those who prepare the request based on old manuals. For a long time, the STJ's case law waived the presentation of negative tax debt certificates to grant the reorganization, on the argument that requiring them ran counter to the social function and the preservation of the company. In practice, art. 57 of Law 11.101/2005 and art. 191-A of the National Tax Code, which condition the grant on proof of tax regularity, were neutralized by the courts' reading.

This changed. After Law 14.112/2020 expanded the installment plan and the settlement, creating real means for the company to regularize the tax liability, the STJ evolved its understanding and began to require proof of tax regularity as a prerequisite of the grant. The logic is coherent: if the legislature offered instruments to pay or renegotiate the tax, there would no longer be a justification for waiving the requirement. For reorganizations approved before the reform took effect, the prior understanding of waiver still applies. For later ones, tax regularity came to weigh in earnest again.

The consequence is direct. With the plan approved by the creditors, if the company does not present the certificates, the proceeding may be suspended until the requirement is met, with the risk of individual enforcement actions resuming. This is where the instruments from the previous section stop being an option and become a necessity. The debt in an installment plan or settlement allows issuing a positive certificate with the effects of a negative one (certidão positiva com efeitos de negativa), which proves regularity even with the debt still being paid. That is why the tax strategy is not an appendix to the reorganization: it is one of the conditions that define whether the approved plan actually becomes a granted reorganization. Whoever builds the judicial reorganization plan without this tax track runs the risk of having it approved and not being able to have it granted.

Federal, state and municipal: liabilities that are not negotiated together

A precaution that avoids frustration: the most generous instruments, the 120-month installment plan and the settlement with a reduction of up to 70%, belong to the federal sphere, managed by the Office of the Attorney General of the National Treasury (PGFN) and the Federal Revenue Service. They reach federal taxes, such as IRPJ, CSLL, PIS, Cofins and social security contributions.

ICMS debts, which are state-level, and ISS debts, which are municipal, follow programs specific to each entity. Some states and municipalities have structured installment and settlement legislation, others offer more restricted conditions, and the rules vary considerably. A company with liabilities spread across the Union, the state and the municipality must handle each front separately, because there is no single negotiation that resolves everything at once. Debts already entered into the active debt registry have an entry point distinct from those still under administrative collection. It is a coordination job, and the sequence in which each liability is tackled influences the certificate the company will need to present at the grant.

How to structure the tax liability in the reorganization

To turn this theory into practice, the sequence that usually works is the following:

1. Map the entire tax liability. Separate what is federal, state and municipal, what is already entered into the active debt registry and what is still in the administrative collection stage. 2. Check the tax foreclosures in progress. Identify which assets are attached and whether any of them is an essential capital good that the reorganization court can protect. 3. Choose the instrument by liability. Decide, for each front, between installment plan and settlement, based on real payment capacity and the reduction potential. 4. Simulate the installment flow. Confirm that the company can bear the commitment undertaken, since default may lead to bankruptcy. 5. Anticipate the grant certificate. Order the regularization so as to have, at the moment of the grant, the negative certificate or the positive one with the effects of a negative. 6. Coordinate with the plan. Integrate the tax strategy into the plan's schedule, so that the two tracks, the private and the tax, arrive ready at the same time.

This is the same logic of anticipation we guide in any judicial reorganization process and in tax defense: the tax liability is planned from day one, not discovered in the final stretch. Whoever is going to file for judicial reorganization with a significant tax debt gains time and reduces risk by handling both subjects together.

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Informative content; it does not replace individual legal advice. Each case has particularities that require specific analysis.

Dr. Wendel Ferreira Lopes — Attorney, OAB/MG no. 82.059. Founding partner of WF Advogados, working in Tax, Banking and Estate/Succession Law since 1999. Uberlândia/MG.

Frequently Asked Questions

Is the tax debt covered by the judicial reorganization plan?

No. Art. 187 of the National Tax Code excludes the tax claim from the effects of judicial reorganization. It is not classified at the meeting, is not voted on by the creditors, and does not undergo the novation of the plan. The tax liability is handled on a separate track, with an installment plan or settlement.

Is the tax foreclosure suspended when the reorganization is granted processing?

No. Under art. 6, §7-B, of Law 11.101/2005, the tax foreclosure is not suspended by the granting of processing and is not reached by the stay period. The Treasury may keep enforcing. What the reorganization court can do is order the substitution of attachments that fall upon capital goods essential to the activity.

What are the essential capital goods that the reorganization court protects?

They are tangible assets employed in the productive process, neither perishable nor consumable, such as machines, warehouses and fleet. When a tax attachment reaches one of these assets, the reorganization court can order its substitution by another guarantee, so as not to paralyze the company. Money in an account and inventory for resale do not have this protection.

What is the term of the federal installment plan for a company in reorganization?

Law 10.522/2002, with the wording given by Law 14.112/2020, allows the debtor in judicial reorganization to pay federal debts in up to 120 monthly installments, with staggered amounts and the possibility of using tax loss and negative CSLL basis on part of the balance. The previous term was 84 months.

What is the difference between an installment plan and a tax settlement?

The installment plan only lengthens the payment and keeps the amount owed. The settlement, provided for in art. 10-C of Law 10.522/2002 and in Law 13.988/2020, allows renegotiating the amount itself, with a reduction that may reach 70% for companies in reorganization, subject to a proposal and analysis of payment capacity. They are distinct instruments, with different purposes.

Does the company need a tax regularity certificate for the reorganization to be granted?

Yes, in reorganizations after Law 14.112/2020. The STJ evolved its understanding and began to require proof of tax regularity as a prerequisite of the grant, based on art. 57 of Law 11.101/2005 and art. 191-A of the CTN. Without the certificates, the proceeding may be suspended until the requirement is met.

What is a positive certificate with the effects of a negative one?

It is the certificate the company obtains when the tax debt exists but has its enforceability suspended, for example, by an installment plan or settlement in progress. It allows proving tax regularity even with a debt being paid, which is decisive at the moment of the reorganization grant.

What happens if the company does not comply with the tax installment plan?

Default on the installment plan is a cause provided for in Law 11.101/2005 for the conversion of the judicial reorganization into bankruptcy. That is why adhering to an installment plan without the real capacity to honor the installments transfers the risk forward and may compromise the entire proceeding. The cash-flow simulation precedes adherence.

Do ICMS and ISS debts enter the same federal installment plan?

No. The installment plan of up to 120 months and the settlement with a reduction of up to 70% belong to the federal sphere, administered by the PGFN and the Federal Revenue Service. ICMS is a state tax and ISS is a municipal one, each with its own programs. A company with liabilities across several entities negotiates each front separately.

Does filing for judicial reorganization solve the tax debt?

Not by itself. The reorganization suspends the collections of private creditors and reorganizes the negotiable liability, but the tax follows outside it and requires an installment plan or settlement on a separate track. The reorganization opens access to better conditions for this liability, but the regularization must be conducted actively.