PGFN Tax Settlement.
Public Notice 11/2025 — discounts up to 70%, deadline 05/29/2026.

What the PGFN Tax Settlement is

Law 13.988/2020 — legal framework and regulation

Law 13.988/2020 authorized the Federal Government to settle with taxpayers — before the statute, debts registered as Overdue Tax Liability could only be paid in installments (REFIS) or in full. The initial regulation came through PGFN/ME Ordinance 6.757/2022, with successive updates. The instrument replaces the “all or nothing” logic with a technical negotiation, with discounts tied to the company’s payment capacity and to the debt’s degree of recoverability.

Difference between settlement and ordinary installment payment (REFIS)

The classic REFIS split the debt into long installments, with a modest reduction of fines and interest. The settlement goes further: it renegotiates the principal amount through discounts on interest, fines and legal charges — capped at 65% of the total amount (70% for individuals, MEI, ME, EPP, Santas Casas charitable hospitals and cooperatives). Another difference: the settlement requires an analysis of payment capacity and of the debt’s degree of recoverability, whereas REFIS is a closed regime with uniform rules.

When the settlement is advantageous

The settlement is particularly advantageous when: (i) there is a hard-to-recover debt in Overdue Tax Liability, with a real risk of tax foreclosure; (ii) the company does not have a strong tax thesis for a court dispute; (iii) the effective discount exceeds the opportunity cost of the allocated capital. For companies with a consolidated tax thesis (an STF precedent, settled STJ case law), tax litigation or a writ of mandamus may yield more than enrolling in the settlement.

The 4 modalities of PGDAU Public Notice 11/2025

Modality 1 — Payment capacity (CapaG)

Aimed at taxpayers with a debt of BRL 1 million or more. The PGFN assesses the company’s payment capacity (CapaG) based on financial statements, revenue and net worth. The effective discount is set by the difference between the debt amount and the assessed capacity. It requires complete accounting and tax documentation for the five preceding years.

Modality 2 — Small value (up to 60 minimum wages)

Applies to debts registered as Overdue Tax Liability for more than one year with a consolidated value of up to 60 minimum wages (in 2026, approximately BRL 91,200). It is the simplest modality — standardized discounts, installment payment over up to 60 months, with no need for an individual capacity analysis.

Modality 3 — Hard-to-recover or unrecoverable debts

For debts classified by the PGFN as hard to recover (rating C) or unrecoverable (rating D). These are old debts, with a low real probability of full payment. Discounts can reach 65% of the total amount (70% for individuals and ME/EPP). Main criterion: the age of the registration as Overdue Tax Liability and the absence of guarantees.

Modality 4 — Debts secured by a surety bond or bank guarantee

Specific to debts disputed in court whose enforceability is suspended by a surety bond or bank guarantee. It allows ending the court dispute via a settlement, with discounts calculated on the secured amount. Useful when the litigation is long and costly.

Discounts and conditions by company size

Individuals, MEI, ME, EPP, Santas Casas and cooperatives: up to 70%

These taxpayers have a maximum discount of 70% on interest, fines and legal charges. The rule recognizes the lower economic capacity and the disproportionate impact of tax liabilities on small-scale operations.

Other taxpayers (medium and large companies): up to 65%

Companies that do not fall into the categories above have a maximum discount of 65%. For a debt of BRL 10 million with 60% in interest and fines (BRL 6 million), the discount can reach BRL 3.9 million — reducing the total debt to approximately BRL 6.1 million.

Effective limit of the discount

The discount applies to interest, fines and charges — the principal amount (the tax originally owed) is not discounted. For this reason, in debts with a low proportion of interest and fines (recent debts), the absolute impact of the settlement is smaller. In old debts with a long accumulation of interest and fines, the discount can represent 50-65% of the total debt.

Payment structure — down payment + installments

6% down payment payable over up to 6 months

Enrollment requires a minimum down payment of 6% on the consolidated post-discount debt amount. The down payment can be split into up to 6 monthly installments. On a post-discount debt of BRL 1 million, the down payment is BRL 60 thousand — divisible into six installments of BRL 10 thousand.

Balance in up to 114 installments

After the down payment, the remaining balance is paid in up to 114 monthly installments (133 installments for MEI/ME). Interest accrues on the installments at the Selic rate. The exact number of installments is set case by case based on the assessed payment capacity.

Practical calculation with a numerical example

Consider a medium-sized manufacturer with a debt of BRL 2 million in hard-to-recover status — made up of BRL 800 thousand in principal tax and BRL 1.2 million in interest, fines and charges:

• Applicable discount (65%): BRL 780 thousand on interest and fines
• Post-discount debt: BRL 1.22 million
• Down payment (6%): BRL 73.2 thousand in 6 installments = BRL 12.2 thousand/month
• Balance in 114 installments: ~BRL 10,060/month (not accounting for Selic)
• Effective total to pay: BRL 1.22 million (vs. the original BRL 2 million)
• Absolute savings: BRL 780 thousand (39% of the original debt)

Each scenario has specific variables — the definitive calculation requires an analysis of the company’s tax reports and of the exact composition of the debt in Overdue Tax Liability.

How to enroll — step by step

Step 1 — Access to the REGULARIZE portal

Enrollment is done exclusively through the official portal regularize.pgfn.gov.br. Access is via a digital certificate (e-CPF/e-CNPJ) or a silver/gold-level gov.br account. A legal entity needs the legal administrator’s digital certificate.

Step 2 — Required documentation

Basic documents for the analysis: the company’s up-to-date registration, financial statements for the last five fiscal years, an up-to-date overdue-tax-liability certificate, proof of payment capacity (CapaG modality) or qualification under the chosen modality (small value, hard to recover, secured). For companies under judicial reorganization, the reorganization court must authorize the enrollment.

Step 3 — Critical deadline — May 29, 2026, 7 p.m. Brasília time

PGDAU Public Notice 11/2025 closes on May 29, 2026, at 7 p.m. (Brasília time). Enrollments made after that time are not accepted. The prior technical analysis is an essential part — hasty enrollments, without comparison against alternatives (a writ of mandamus, an ordinary lawsuit, waiting out the statute of limitations), can cause a loss. It is advisable to begin the analysis at least four weeks ahead of the final deadline.

When it is NOT worth enrolling in the settlement

Cases where the statute of limitations has already run

Debts whose five-year statute of limitations has already run (five years without collection or a valid interrupting act) should not be paid — the settlement reopens a debt that could be extinguished. The prior analysis of the limitations period, taking into account interruptions (valid service of process, judge’s orders, prior installment plans), is an indispensable part of the decision.

Debts with a strong tax thesis

When there is a consolidated thesis favorable to the taxpayer — binding STF precedents, STJ repetitive rulings, settled case law of regional courts — a preventive writ of mandamus or an ordinary lawsuit with a judicial deposit may yield greater savings than the settlement. Examples: exclusion of ICMS from the PIS/COFINS base, broad PIS/COFINS credits on inputs (STJ Theme 779), reimbursement of ICMS-ST on a sale below the presumed MVA (STF Theme 201).

Companies under judicial reorganization

Companies under judicial reorganization have their own regime for tax debts (Law 11.101/2005 + Law 14.112/2020), with the possibility of a specific installment plan for tax liabilities in the reorganization plan. Enrolling in the PGFN settlement requires authorization from the reorganization court and may compromise the plan’s approval. An integrated analysis with the reorganization plan is essential.

How TaxUp works on PGFN Settlement

Pre-enrollment eligibility analysis

The process begins with a complete reading of the overdue-tax-liability certificate, identification of the applicable modalities and classification of each debt’s rating (A, B, C, D). In parallel, an analysis of the statute of limitations and of any tax theses sustainable in administrative or judicial litigation. The goal is to assess whether the settlement is the most technically advantageous option — or whether there are alternatives with a higher return.

Direct negotiation with the PGFN across the four modalities

After validating eligibility, technical handling of enrollment through the most advantageous modality. For debts above BRL 10 million, there is the possibility of an individual settlement (not under a public notice) — a case-by-case negotiation model, with greater flexibility on deadlines and conditions. Direct negotiation with PGFN attorneys is part of the technical work.

Comparative assessment: settlement vs. litigation vs. writ of mandamus

Quantitative modeling that compares three paths: (i) settlement — immediate savings but with payment of most of the amount; (ii) administrative litigation via CARF (see the tax litigation pillar) — average time of 18-36 months + an appeal to the CSRF; (iii) preventive writ of mandamus — when there is a consolidated thesis with immediate application. The decision is technical and based on the probability of success, the cost of litigation and the opportunity cost of capital.