Brazil enacts new law for tax arbitration and mediation

Brazil has enacted Complementary Law No. 236/2026, which introduces new mechanisms for resolving tax and customs disputes through mediation and special arbitration. Published on September 4, the law integrates these possibilities into the National Tax Code (CTN), allowing for binding arbitral sentences that carry the same weight as judicial decisions.

The new legislation also establishes general rules for tax administrative processes and sets limits on tax penalties. Generally, fines for non-compliance are capped at 75% of the tax due, though this can increase to 100% in cases of fraud or evasion, and up to 150% for recidivism. The law also provides for discounts for taxpayers who regularize debts within specific timeframes.

While the law provides a framework for special arbitration and mediation, these procedures are not immediately available. Further specific legislation is required to define the criteria, costs, selection of mediators and arbitrators, and the specific types of controversies that can be addressed. The law originated from a project led by Senator Rodrigo Pacheco and a commission of jurists chaired by STJ Minister Regina Helena Costa, aimed at reducing bureaucracy and increasing efficiency in administrative litigation.