Infrastructure & Energy

The Brazilian Electrical Sector is subject to intensive and complex regulation. As an additional challenge, there are numerous regulatory issues that impact the calculation of taxes owed by companies in the sector.

To navigate this landscape, a multidisciplinary approach is essential, combining a detailed analysis of tax legislation, an understanding of regulatory issues, and knowledge of the accounting peculiarities of the electrical sector.

VBSO Advogados’ services for the electrical sector encompass both advisory and litigation work, with a focus on the following activities:

• Advisory on the tax impacts resulting from IFRS-based accounting standards;
• Analysis of electrical sector regulations and identification of relevant tax aspects;
• Active participation with industry associations and in public consultations by the Ministry and ANEEL;
• Identification and analysis of the tax impacts arising from M&A transactions and corporate reorganizations in general;
• Preparation and submission of inquiries on the interpretation and application of tax legislation to competent municipal, state, and federal authorities;
• Advisory on compliance with audit procedures;
• Sponsorship of applications for special tax regimes (e.g., REIDI);
• Preparation of defenses and appeals in administrative proceedings and oral arguments before administrative courts, particularly the Administrative Council of Tax Appeals (CARF);
• Sponsorship of judicial actions involving specific issues for the electrical sector, such as challenges regarding the initial adoption of Law No. 12,973/14, tax treatment of commercial losses, and identification of the presumed profit percentage applied to transmission activities.

Key Cases in Which We Have Acted:

• Issuance of legal opinions on the tax aspects of IFRIC 12 (ICPC 01), fiscal repercussions of the recognition of regulatory assets and liabilities, deductibility of fines imposed by ANEEL, and presumed margins applied to power transmission companies, among various other topics;
• Engagement with various representative entities in the sector, such as the Brazilian Association of Electric Power Transmission Companies (ABRATE) and the Brazilian Association of Energy Traders (ABRACEEL);
• Sponsorship of “leading case” judicial actions on various tax issues relevant to the electrical sector, such as the taxation of commercial energy losses by distributors, the unconstitutionality of Article 69 of Law No. 12,973/14 (initial adoption for concessionaires), and the establishment of the ICMS/ST collection deadline for energy trading companies;
• Qualification of infrastructure projects under REIDI, amounting to investments exceeding R$ 10 billion.