Publications

Category: Tax

Law No. 13,655/2018, published in early 2018, included new general principles in the Law of Introduction to the Norms of Brazilian Law - Lindb (Decree-Law No. 4,657/1942) and since then, much has been said about the applicability of the changes in all areas of law, especially tax law.

This is because one of the amendments, promoted by article 24, provides that "review, in the administrative, oversight, or judicial spheres, of the validity of an act, contract, agreement, process, or administrative rule whose production has already been completed shall take into account the general guidelines of the time, it being thus forbidden to, based on later change in a general guideline, declare invalid situations already entirely established."

This provision was included in the rule as a new instrument in favor of legal certainty of the system. In the same spirit, the mandate of article 23 came about,^[1] which provides that, when an administrative, oversight, or judicial decision addresses the interpretation adopted in relation to an undetermined legal norm, it is the duty of the judge to provide for a transitional system, thus ensuring adequate time for subjects to adapt to the new interpretation.

When the two articles are analyzed together, it is clear that the legislator's intent was to bring in new normative provision that, based on comprehensive and clear wording, guarantee legal certainty to the subjects in all areas of Brazilian law.

This article intends to analyze the scope of the effects brought in by article 24 of Law No. 13,655/2018 and of the argumentative combat inherent to its application in administrative tax procedure.

From an objective interpretation of the provision reviewed, it is noted that its wording establishes that administrative and judicial courts, when carrying out a reassessment of acts performed by private individuals, must take into consideration what the majority guidance given in the period reviewed was. Specifically in the tax context, the issue has frequently been raised by taxpayers in judgments handed down by the Administrative Council of Tax Appeals (Carf)^[2] in order to request the cancellation of tax assessments, on the grounds that the taxpayer adopted the guidance in effect at the time.

The Attorney-General of the National Treasury opines in favor of the inapplicability of article 24 of the LINDB in administrative tax procedure. One of the points raised by the Attorney-General's Office is that it is not possible for ordinary law (Law No. 13,655/188) to prescribe general guidelines on tax law, since article 146^[3] of the Federal Constitution of 1988 establishes that regulation is within the exclusive competence of complementary laws.

The taxpayer argues that article 146 only applies to special and specific rules of tax law, that is, rules that regulate tax matters such as conflicts of jurisdiction, limitations on the power to tax, and applicability of taxes, among many other issues. The requirement of a complementary law is not unrestricted, that is, for any and all tax law rules. That being the case, rules of public law in general that do not deal with the specific situations of article 146 of the Federal Constitution may not be imposed via ordinary law. Also along these lines, the taxpayer argues that Law No. 13,655/2018 came to regulate the LINDB, which is imposed on the entire legal system, not excluding tax law.

To refute the application of article 24 of the LINDB, the National Treasury affirms that only accounting courts are under its scope, on the justification that the LINDB governs exclusively administrative law.

However, from a reading of the justification of the bill that gave rise to Law No. 13,655/188, one notes that the main concern of the legislator was the fact that, the more the legislation and the State's actions advance, the more legal security recedes due to uncertainty and unpredictability regarding the processes and controls of the Public Administration.

Thus, the main purpose of the legislator was "to include in the Law of Introduction to the Norms of Brazilian Law (Decree-Law No. 4,657/1942) provisions to raise the levels of legal certainty and effectiveness in the creation and application of public law."

Public law, as is well known, encompasses various branches of law, such as constitutional, financial, environmental, social security, and, above all, tax law. Thus, the National Treasury’s interpretation in a restrictive manner that the amendment promoted by Law No. 13,655/2018 would not cover tax matters is unreasonable. The norm introduces general provisions for and on the application of public law, which includes tax law.

Even if there were any doubts about the applicability of article 24 of the LINDB in the analysis of tax issues, professors Carlos Ari Sundefeld and Floriano de Azevedo Marques Neto, authors of the bill that was converted into Law No. 13,655/2018, insisted on clarifying the question once and for all.^[4] In articles published on the subject, scholars emphasized that tax law is a branch of public law, the primary application of which is done the Public Administration, being fully subject to articles 20 to 30 of the amended Law of Introduction to the Norms of Brazilian Law.

From there, it is concluded that the applyer of the law, including tax law, must observe the guidelines brought in in the new rule. Regarding the discussion held here, article 24 obliges Carf to confirm the majority rule at the time of the facts during the review, such that, if it is proved that the understanding was favorable to the taxpayer at that time, the levy must be rejected.

Regarding this issue, the National Treasury also states that the law was silent in not determining what the majority case law would be and that, given the structure of Carf and the constant change in the composition of the adjudicatory panel, it would not be possible to determine what the "majority understanding" of the body would be.^[5] However, it would not be necessary for legislators to be concerned with establishing what majority case law would be, since the majority is based on common sense, the largest part of the whole.

Nor is the argument valid that the possibility of changing the composition of the adjudicatory panels of the body precludes the implementation of majority case law. Taxpayers have already been successful in demonstrating that some matters had a consistent understanding during a certain period within the Carf,^[6] proving the current understanding regardless of change in the composition of the members.

Even in view of these and many other considerations that confront the arguments against the application of the rationale of article 24 of the LINDB to administrative tax procedure, it is verified that the current tendency of the Carf is to rule out its applicability.

The three adjudicatory panels of the Carf’s Superior Chamber, responsible for consolidating the administrative case law of the body, have already ruled in favor of the inapplicability of article 24 of the LINDB, although on different grounds.

The 1st Panel is of the understanding that article 24 of LINDB would not be applicable to the Carf, believing that that body does not exercise the activity of review, but rather of judge.^[7] In turn, the 2nd Panel argues that administrative adjudicatory bodies could not determine what the majority position is for the entire Tax Administration.^[8] The 3rd Panel was the last one to rule on the subject, expounding an understanding to the effect that the legal text of the instrument refers to review of the validity of an act, process, or norm, and not to review of acts in the sphere of administrative litigation.^[9]

The ordinary panels of the Carf, although they do not have settled case law on the controversy, for the most part follow the same tendency, in favor of inapplicability of the provision.

Despite this, taxpayers still have hope. There are already judicial decisions on the matter, such as the judgment^[10] conducted by the Court of Appeals of the State of São Paulo (TJSP) in September of 2018, which dismissed a levy done at the time when the case law moved in the opposite direction. In the decision, it was evident that the interpretation regarding the application of article 24 of the LINDB was instrumental in forming the judge’s persuasion.

This indicates the need for the Carf to recognize the guidelines drawn by article 24 of Law No. 13,655/8 and respects the intent of the legislator to preserve legal certainty, at risk of being a dead letter of the law. These are times of change, which will certainly bring more benefits to the legal system.

^[1] Article 23.  The administrative, oversight, or judicial decision that establishes a new interpretation or guideline regarding a rule of undetermined content, imposing a new duty or new condition of law, should provide for a transitional system when indispensable for the new duty or condition of law to be complied with proportionally, equitably, and effectively and without prejudice to general interests.

^[2] Administrative court of appeals that definitively reviews the validity of tax credits of taxpayers at the federal level, whether individuals or legal entities.

^[3] Article 146. The following is incumbent on complementary laws:
I - govern conflicts of jurisdiction, in matters of taxation, between the Federal Government, the States, the Federal District, and the Municipalities;
II - regulate the constitutional limitations on the power to tax;
III - establish general rules in matters of tax legislation, especially on:
(...)

^[4] Sources:
https://www.jota.info/opiniao-e-analise/artigos/lindb-direito-tributario-esta-sujeito-a-lei-de-introducao-reformada-10082018
https://www.conjur.com.br/2018-jun-01/opiniao-lindb-direito-previsibilidade-mudancas-interpretativas

^[5]  Except for provisions relating to Carf’s restatements of law, the reproduction of which is obligatory.

^[6] For example, the issue of limitation on the percentage of 30% for the offsetting of tax losses or negative calculation bases in merger operations, deductibility of amortization with goodwill, among others.

^[7] Appellate Decision No. 9101-003.839, of October 3, 2018.

^[8] Appellate Decision No. 9202-007.145, of August 29, 2018.

^[9] Appellate Decision No. 9303-006.839, of May 17, 2018.

^[10] Judgment handed down by the 6th Chamber of Public Law of the Court of Appeals of the State of São Paulo - Administrative Proceeding No. 0013375-90.2014.8.26.0224 - Opinion drafted by Appellate Judge Reinaldo Miluzzi.

Category: Tecnology

Presidential Decree 881/2019, called the Declaration of Economic Freedom Rights, is organized into five chapters and changes a series of laws, among which the most relevant are the Civil Code and the Brazilian Corporations Law. It has gained repercussion as a bet to catapult entrepreneurship, de-bureaucratize economic activity, and contribute to innovation, freeing startups from some bottlenecks caused by the Public Power.

General issues

The first three chapters of the law are the heart of the bill. The first, in addition to linking the Declaration of the Rights of Economic Freedom to the market system enshrined in the Economic and Financial Order of the Constitution, with the primacy of freedom of labor, initiative, and competition, conducts a balancing exercise to cut the limits of the application and extension of the economic rights declared, with an emphasis on tax law and federalism. In addition, the following basic principles are established: (i) presumption of freedom in the exercise of economic activities; (ii) presumption of good faith of private parties; and (iii) minimal and exceptional intervention by the State in the exercise of economic activities.

The second chapter outlines the economic rights of any individual or legal entity for Brazil’s economic growth and development, with emphasis on: (i) freedom of labor, economic activity, and livelihood; (ii) guarantees against undue intervention and unequal treatment provided by the Public Administration; (iii) presumption of good faith; (iv) the right to innovate and test products without the need for release from economic activity; (v) autonomy of the will in the context of legal business affairs; (vi) guarantees of a reasonable length of time in the context of administrative processes, especially those related to the obtaining of authorizations for the exercise of business activities; and (vii) digitization of the filing of documents.

In the third chapter, the rule is directed to the Public Administration in order to specify the duty to avoid the abuse of regulatory power, which includes obligations with respect to free competition and free initiative, to avoid deviation from function, and to observe legal competences.

In addition, MP 881 makes practical changes to specific legislation in order to implement some of the rights enunciated, including changes to the Civil Code (corporate and contractual issues), the Brazilian Corporations Law, and Cadin regulations, among others.

Changes

The motivation of economic freedom is noble, and the goal of facing paternalism, bureaucracy, and administrative irrationality is unquestionable, but it should not surprise anyone that the enunciation of economic rights lacks large regulatory innovations. Economic rights are, in reality, a logical consequence of the basic rights and principles of the Federal Constitution, such as the dignity of the human person, freedom of work, the pursuit of full employment, the principles of the public administration, private property, free enterprise, free competition, and other principles of the economic order.

The attentive reader should not have found any great novelty in the list of economic rights, because they are all already in the Federal Constitution and, as such, under normal conditions, this declaration of rights would be completely unnecessary.

But, if we are not in normal times, and in fact the Brazilian State has a structural problem in the observance of constitutional commands in general and predictability and legal certainty in particular, as indeed Brazil does have, would MP 881/2019 be able to do what the Federal Constitution has not done to date?

Skepticism is uncomfortable, but the conclusion that we are dealing with a normative text whose practical effect may be quite limited seems to be required, less perhaps due the ideas that motivated the content of the text (which are the same ones present in our Federal Constitution) and more due to a structural problem of the Brazilian State that, unfortunately, the promulgation of a rule will not be able to resolve.

It is important to say what is fundamental, and what MP 881/2019 ends up condescending to in order to change the status quo: the rule in Brazil is that economic activity in the strict sense does not depend on authorization from the Public Power, by virtue of the provisions of the sole paragraph of article 170 of the Federal Constitution. There are obviously conditionalities, requirements, regulations, but the State cannot, under the pretext of "regulating" economic activity, end up conditioning it on the discretion of the Public Administration and its authorization. It is never too much to remember that this is already so, regardless of MP 881/2019.

The most obvious example is related to municipal permits. This power and duty exists through the legislative competence of the local interest in conjunction with the constitutional dictates of urban politics. But the foundation of this power and duty is related to urban land management and the social function of urban property, not to the regulation of economic activity in the strict sense. Although various municipalities believe they have the prerogative of authorizing (or not authorizing) economic activity in their territory, including approving legislation in this sense, this does not change the constitutional framework. Such laws must be considered unconstitutional and not capable of having effects in the legal system.

Some novelties in the text recognize already established factual situations (such as low-risk economic activities carried out in homes) or lack future regulation and therefore do not have immediate application. While recognizing the importance of improving the business environment, the change seems, in principle, rather timid.

Specifically for startups, two provisions call one’s attention: items VI and VII of article 3. Both seem to point to the creation of a regulatory sandbox, a fashion word that simply means a space for experimenting with new products and services within controlled institutional contexts (both from the point of view of commercial scale and legal consequences).

The legislative innovation is interesting and must be celebrated, but putting it into practice is still uncertain. In addition to the fact that part of it is subject to subsequent regulations, there are controversial points such as the ability to ignore infra-legal norms under certain conditions based on "internationally consolidated technological development." What is the criterion for defining "consolidation"? If it is consolidated, is there innovation? The truth is that changes in the law due to social transformation is not a new subject (it is possible to have legal norms up to the present day, regarding carriages driven via animal traction) and that tension between the established law and social innovation is a healthy part of this transformation process in that there are always losses and gains, benefits and new risks. The fundamental point is that there be fewer legal enunciations and more an attitude on the part of the Public Power to contain its regulatory urge. Frequently, the problem is the inability of the Public Power to receive novelty without wishing immediate intervention, or presuming that actors engaged in innovation are disturbing the order. Unfortunately, legal texts alone are not able to change mentalities and postures, as indeed we are tired of seeing.

On the other hand, there are more structuring initiatives to support startups that are not included on this menu. The chronic problem of legal certainty in the tax field (caused not only by the labyrinth of laws, but also by the inconstancy of the authorities in interpretative changes that produce retroactive effects) and the creation of exceptions in the labor and consumer context (that allow for a better control of the contingencies, responsibilities, and costs) seem to be more effective measures to foster innovation. They would benefit not only startups, but also small and medium-sized businesses.

Next steps

There are advances in MP 881/2019. At the very least, it is an acknowledgment from the public authority itself that the Public Power’s mindset and ways of acting are not in the right places. From a practical point of view, however, it will still be necessary to await supplementary regulations and the actual progress of the presidential decree in the National Congress.

It will be very important to evaluate how the authorities of the other States and the Judiciary will receive and treat the presidential decree. Very little (or nothing) changes immediately. In addition, the argument remains that a large part of the expected consequences would be a logical consequence of the Federal Constitution, which may lead to an initial questioning of the effectiveness of the presidential decree in question: what would one respect MP 881/2019 if the Federal Constitution itself is not observed?

Thus, there is little that may be celebrated as effective, little to be done, and, for now, one must await its further developments. As a final note, one may question whether the vehicle of a presidential decree would be the most appropriate to propose a declaration of economic rights. In the context in which the habit of ignoring logical aspects of the Federal Constitution and its repercussions in the context of economic freedoms is discussed, one has to ask whether the best remedy for this would be to propose a presidential decree with the requirements of urgency and relevance that may be subject to reasoned questioning.

Category: Labor and employment

Startups are, by definition, the work environment of young people, a demanding public when it comes to instantaneousness in relationships and communications, an entirely flexible routine and less bureaucracy. This innovative profile makes day to day work very informal.

It is common, therefore, for these companies to stop adopting measures to control working hours (allowing alternative schedules), to stop requiring the presence of employees at the company, and to stop monitoring meal breaks or minimum breaks between two work days.

But the truth is that labor laws do not exempt startups from complying with the rules regarding work days, and lack of control can represent a risk that exposes startups to substantial liabilities in the case of inspection or labor suit.^[1]

How can the interests of these companies and their employees be reconciled with the legal obligations? Especially after the Labor Reform there are many measures that may be adopted, depending on the profile of the startup.

The first of them is to identify employees who fall within the concept of a "position of trust"^[2] or who have "external work hours,"^[3] for which it is not necessary to control work hours.

Another measure is to identify employees who work on a teleworking basis, predominantly from any location, whether it is a residence, a coworking space, or another place of their choice. These professionals are also not subject to control of work hours, which guarantees broad flexibility for both them and the startup.

Having analyzed the employees for whom control of work hours is not required, one must study the best alternative for control for the other workers, according to the reality of each startup.

Traditional control mechanisms (electronic time cards, for example) do not fit into the work environment of startups. It is against the local culture. An alternative that deserves to be highlighted is the implementation of alternative work day controls through negotiation with the employees' trade union, such as control by exception, which tends to be the least disruptive in this environment. Through this system, employees record only overtime hours, when performed. This increases the practicality of the control, reduces efforts and, consequently, the costs inherent thereto.

Another alternative whose use has been growing is the work hours self-management system. Here, the parties negotiate through the employees’ trade union or individually (in the case of hyper-sufficient workers)^[4] what modality of control will be adopted. Currently, there are, for example, smart phone applications that allow for remote and electronic control. It is also an option that reduces effort and costs, mainly because the process is entirely electronic.

There is also the flexibilization of the modular work day, in which employees fulfill the eight hours provided for within a range established by the company: for example, starting the work day between 7 a.m. and 10 a.m. and completing it after their entrance. With the greatest flexibility in the entry and exit times, employees can organize their personal appointments and the company can count on professionals to work at varied times.

It is also possible to institute a work hours banking system, where excess work hours in one day may be offset with fewer hours worked in another. The offset may be done (i) in the same month, without any formality; (ii) within six months, per an individual agreement with the employee; or (iii) in one year through a collective bargaining agreement with the employees' trade union. This alternative is sometimes much desired by employees, who may negotiate days off and days around holidays, offsetting them with additional work on other days.

As for breaks for meals and rest, startups may deal with them in two ways. The first of these is pre-annotation of the break time. In this case, employees will not record the actual lunch time, as it will already be filled in automatically. The second possibility is the reduction of the time break, which may be implemented through collective bargaining or agreement between the parties, in the case of hyper-sufficient employees.

^[1] Except if the establishment has less than ten employees, in which case laws and regulations do not require recording and control of work hours.

^[2] Employees who, under the law, hold management positions, who are equated to officers and heads of departments or branches.

^[3] Employees who, under the terms of the law, carry out activities that are incompatible with the fixing of working hours, and such conditions must be noted in the Work and Social Security Ledger and in the employee register.

^[4] Employees who, per the terms of the law, possess a higher-level degree and receive a monthly salary equal to or greater than two times the maximum benefit limit of the General Social Security Regime. This group of employees may individually negotiate the cases listed in article 611-A of the Consolidated Labor Laws and the result of the negotiation will have the same legal effectiveness and preponderance over collective bargaining agreements.

Category: Capital markets

CVM Instruction 606, published on March 25, promoted changes in CVM Instruction 555 in order to regulate the Incentivized Infrastructure Investment Funds (FI-Infra) under the terms of article 3 of Law No. 12,431/11. The objective of the measure was to incentivize the participation of the capital markets in the financing of infrastructure projects, whose progress has been hampered by the conditions of the political and economic scenario.

The FI-Infra will be governed by CVM Instruction 555, duly adjusted to include some rules from Law No. 12,431/11, which limits the investment in certain assets as a requirement for granting tax benefits to the fund's unitholders.

Among other changes, the new text allows the FI-Infra to be targeted also to non-qualified or professional investors, according to specific regulations.

"Individuals, especially in the case of retail investors, will be able to rely on professional management to better assess the risks and returns associated with these long-term assets, as well as greater portfolio diversification, essential for dilution of investment risks," said Antonio Berwanger, Market Development Superintendent of the Brazilian Securities and Exchange Commission (CVM).

Among the changes made, the instruction relaxed the FI-Infra investment limits in other types of funds, such as Real Estate Investment Funds (FII) and Debt Receivables Investment Funds (FIDCs), and assets such as Real Estate Receivables Certificates (CRIs) and Agribusiness Receivables Certificates (CRAs). Thus, the limit per issuer goes from 20% to 40% for funds for qualified investors (with more than R$ 1 million invested) and there will be no limits for professional investors (more than R$ 10 million).

As a consequence of the changes, other types of funds may migrate to the IF-infra system. Article 3 governed this migration, to be carried out by a decision of the unitholders in a general meeting. In such cases, the tax treatment of the income of the unitholders of an FI-Infra and of the unitholders of investment funds in units of investment funds (FIC) whose portfolio consists of at least 95% units of FI-Infras and the capital gains received by such unitholders with the sale of their units will be: (i) 0% income tax in the case of foreign investors not resident in countries that do not tax income or tax it at a maximum rate of less than 20%; (ii) 0% income tax in the case of individual unitholders; and (iii) 15% income tax in the case of a legal entity, in the form of exclusive withholding tax.

In relation to the purchase of assets, FI-Infras directed to the retail public may now acquire assets still in the pre-operational phase, a necessary condition for financing in the infrastructure sector. There was also loosening of concentration per issuer.

Under the new rules, retail FI-Infras, which previously could not have more than 5% in a single asset, that is, they needed 20 assets from 20 different groups to form a portfolio, may invest in only five. The instruction further amends other classification rules and exempts administrators and managers from penalties in the event of passive disqualification.

Experts believe that the changes in CVM Instruction 555 should stimulate the creation of FI-Infra funds, since managers can offer clients a differentiated investment option, as well as flexibility in the portfolio classification. With this incentive, the implementation of the new normative provisions clearly tends to favor expansion of the volume of finds destined to infrastructure projects.

Category: Infrastructure and energy

Approved in the Federal Senate in December of 2018 (PLS 484/17) and currently pending in the Chamber of Deputies, Bill 11,247/18, although controversial, may represent an important advance for the expansion of renewable energy sources in the Brazilian energy matrix.

The text provides the regulatory framework for wind and photovoltaic energy generation projects located in inland waters, in the territorial sea, and in the exclusive economic zone. The objective is to encourage the rational economic use of the sea's energy resources and the generation of electricity from renewable sources. To this end, Bill 11,247/18 provides for the granting of a concession or authorization, in the public use modality (UBP), for the installation of a wind or photovoltaic prism in maritime or inland waters, as part of the implementation and operation of offshore wind or photovoltaic projects.

By means of concession auctions, in coordination with transmission auctions for generated electric energy and/or auctions to contract energy destined to the regulated market, incentives and mechanisms would be established for the implementation of offshore renewable projects.

The absence of physical barriers such as vegetation, mountains, or buildings makes the high seas and the winds stronger and more constant, which is an advantage for offshore power generation. Due to the complexity in putting it into operation, however, the exploration of offshore energy faces challenges such as incipient specialized technical support, difficulties in the transportation of wind turbine components, high project cost, and possible interferences with oil and gas exploration and production or sea routes.

In addition, the bill requires the Ministry of Defense, the Maritime Authority, and the Ministry of Transport, Ports, and Civil Aviation to be consulted in defining the wind or photovoltaic prisms to be granted, which may make the bidding process more complex.

Regarding the allocation of funds arising from payment for the use of a public good, Bill 11,247/18 establishes that 45% will be allocated to the states, 45% to municipalities, 3% to the Ministry of the Environment, 3% to the Ministry of Mines and Energy, and 4% to the National Fund for Scientific and Technological Development (FNDCT).

The text has been criticized by players in the industry, arguing that the implementation of offshore wind projects is already feasible under the current regulations promulgated by the National Agency for Electric Energy (Aneel), which includes the procedure for granting new projects for power generation in its Normative Resolution No. 391/2009.

Although controversial, PL 11,247/18 emphasizes the importance of renewable energy sources for the future of Brazil's energy planning and exposes a great potential not yet explored for offshore generation projects. Certainly, with the right incentives and a constructive debate, offshore projects may be the next frontier for investment in renewable energy in Brazil.

Category: Labor and employment

To facilitate and modernize access to information related to all formal professional experiences of workers, the Ministry of Labor launched in late November of 2018 the Digital Employment Record Card, or Digital CTPS, as a free application available on the iOS and Android platforms.

The tool integrates several databases of the federal government so that workers may have in the palm of their hands all information on their working life. It is even possible to issue the document using the app, by inputting personal data and appearing at a job agency within 30 days to complete the process, and request a new physical copy of one’s CTPS.

This change will reduce the volume of visits at the Ministry of Labor and should expedite the response to requests, including in relation to the processes for requisition and issuance of the printed copies of employment record cards.

Employers’ question is whether they will be affected in any way by the new tool. At first, the Digital CTPS does not replace the physical copy of the document. Its submission remains mandatory for some benefits, and the information contained in the app will also not be accepted for civil identification purposes. In case of loss of the card, it is still necessary to request a new copy. The document cannot be replaced by the app.

The existence of the Digital CTPS also does not eliminate the risk of a penalty for retention of the employee's CTPS for more than 48 hours, which is provided for in article 29 of the Consolidated Labor Laws (CLT). Although the app is integrated with the Ministry of Labor database, employers must still proceed with annotation of the employee's professional ledger within 48 hours, counting from the date of delivery of the document to the company. The penalty for retaining the document is equal to one day's salary per day of delay in returning it.

The company will have no liability or obligation in the event that some information on the employee's employment contract is incorrect in the app. This type of error will occur when there is some divergence in relation to the user information contained in the National Social Information Register (CNIS). It will be incumbent on the employee to request that the INSS to correct the information in the CNIS via telephone or directly at a branch of the agency.

The Digital CTPS is part of the federal government's Digital Governance program, which aims to make services to citizens more efficient and economical through the implementation of information and communication technologies in the public sector. With this initiative, it is also possible to increase the participation of society in the decision-making process and simplify access to information.

Other Digital Governance initiatives, such as e-Social and the possibility of digital signatures on contracts, policies, settlements, and agreements, contribute to digitizing labor relations, making them less bureaucratic, expediting the issuance of documents, and increasing the control of government inspections. Companies should prepare for these and other modernizations, as the wave of digitization is only tending to grow.