Brazil and Covid-19: New provisional measures (Update: April 9, 2020)


published on 14 April 2020 | reading approx. time 3 minutes




Labor aspects


Creates the Emergency Employment and Income Maintenance Program (PEMER), with the objective of facing the economic crisis caused by the coronavirus.

The Emergency Job and Income Preservation Benefit was created, to be paid based on the amount of unemployment insurance to which the employee would be entitled, which can be granted in two cases of proportional reduction of working hours and salary or temporary suspension of the employment contract.

Proportional reduction of working hours and wages:

  • The workload reduction can be done for up to 90 days.
  • The reduction in working hours must observe: (i) preservation of hourly wages; (ii)* agreement by individual written agreement between employer and employee; (iii) be carried out in the percentages of 25 per cent, 50 per cent or 70 per cent.
  • The collective agreement or agreement may establish a percentage of workload reduction different from those provided for individual agreement, including less than 25 per cent or greater than 70 per cent.


* Due to the recent position of one Minister of the Brazilian Supreme Court (STF), we suggest that any individual agreement be made with caution and, if possible, with the involvement of the union in order to avoid future problems after a final positioning by the STF.

  • The suspension of the contract can be made for up to 60 days, and can be divided into up to two periods of 30 days.
  • The suspension of the contract must be agreed upon by individual written agreement between employer and employee.
  • The amount of the benefit paid will depend on the company's annual gross revenue in 2019. If below R $ 4.8 million, it will be equivalent to 100 per cent of the unemployment insurance amount (paid in full by the government). If over R $ 4.8 million, it will be 70 per cent of the unemployment insurance amount (paid by the government) plus 30 per cent of the salary paid by the company as monthly compensatory aid.
  • During the suspension, the employee will be entitled to the benefits granted by the employer.


The employee who receives the benefit will have stability during the period of contract reduction or suspension, plus a period equivalent to that agreed for the reduction or suspension.



Instituted the Emergency Employment Support Program, aimed at carrying out credit operations with entrepreneurs, business companies and cooperative societies, except credit companies, whose annual gross revenue, in the year of 2019, was greater than R$ 360,000.00 and less than R$ 10,000,000.00, for the purpose of paying the payroll of its employees.


The credit lines will cover the entire payroll of the contracting company for a period of two months, limited to the amount equivalent to twice the minimum wage per employee. If the salary is above this amount, the difference will be paid by the company.


Financial institutions will be responsible for ensuring that the funds are used exclusively for the processing of contractor payrolls. An interest rate of 3.75 per cent per year will be applied, with a grace period of six months and payment in 36 months.

In addition, the provisional measure establishes that a company that joins the program will not be able to terminate, without just cause, the employment contract of its employees in two months, counting from the last installment received of the loan.


It is expressly forbidden to use funds for purposes other than paying employees. Failure to meet any of the obligations implies the early maturity of the debt.

Tax aspects


Given the extreme foreign exchange variation of the Brazilian currency, if the taxpayer has opted for the accrual principal to tax the foreign exchange variation in Fiscal Year 2020, such may be changed to the cash basis.

Such procedure is not allowed under normal fluctuation circumstances, but considering the oscillation of more than 10 per cent within the same month, the such authorizes the exceptional change on the regime to tax the foreign exchange variation, as foreseen by Article 5-A of Normative Instruction 1.079/2010.



The Ministry of Economy issued on April 3rd, 2020 Ordinance 139, which enables the deferment of the payment of the contribution to PIS/COFINS, which is levied on revenues, as well as the Employer's Social Security Contribution - CPP levied on the payroll and the Domestic Employer's Contribution levied on the salary of the domestic employee at his service.


Contributions due in connection to fiscal periods of  March and April 2020, may be collected together with those from July and September 2020, respectively. 


Normative Instruction 1.932, published on April 3rd 2020,  is exceptionally extended: i) the submission of the Federal Tax Credits and Debits Statement (DCTF) to the 15th  business day of July 2020, related to the DCTF originally scheduled to be transmitted in April, May and June 2020, and ii) the submission of the EFD-Contributions to the 10th  business day of July 2020, related to the EFD-Contributions originally scheduled to be transmitted in April, May and June 2020, including in the event of cancellation, merger, consolidation and total or partial spin-off.


DECREE 10.305/2020

In order to ensure the solidity, stability and regular operation of the National Financial System, the Brazilian Central Bank issued Resolution no. 4.797 on April 6th, 2020, provisionally establishing prohibitions and limits on the distribution of results above the compulsory minimum and the increase in the remuneration of administrators (including the anticipation of such payments) to be observed by financial institutions and other institutions authorized to operate by the Central Bank of Brazil.

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