Concepts (CTBA998 - SIGACTB)

What is the Tax Calculation Book?

The Tax Calculation Book, also known by the acronym LALUR, is a tax accounting book, created by the Decree-law n. 1,598/77 for compliance with paragraph 2 of article 177, Law nr. 6,404/76 (S/A Law). It is destined to extra accounting calculation of the taxable income subject to payment of income tax at each calculation period; it also has elements that may affect results of future period calculations (RIR/99, art. 262).

To whom the Tax Calculation Book (LALUR) bookkeeping is mandatory?

To all corporate taxpayers whose income tax is based on taxable income, including those who spontaneously choose this calculation format (RIR/99, art. 246).

How is LALUR composed?

LALUR, whose sheets are typographically numbered, is divided into two parts, each one with same amount of sheets grouped in a bound volume:

• Part A is destined to adjustment entries of net profit of the period (additions, exclusions and compensations), being concluded with the transcription of the taxable income statement.
• Part B is exclusively destined to control of values that do not exist in the commercial accounting but have influence in determining the taxable income of future periods.

Note:

LALUR is meant to register values that, due to their tax nature, must not be in the commercial accounting. Thus, it cannot be used to overcome gaps of the commercial accounting (register expenses not existing in the commercial accounting or barely registered) (PN CST nr. 96/78 and 11/79).

How to execute LALUR accounting?

In part A, the accounting is organized in a chronological order, sheet by sheet, with no intervals or spaces, closed period by period, with the transcription of the taxable income statement. Each period accounting is accomplished with the signature of the person in charge of the corporate taxpayer and the legally qualified accountant.

In part B, the accounting uses a sheet for each account or event requiring a separate control.

Note:

When pages destined to one of the parts of the accounting is completed, the other part is closed according to cancellation of pages not used, proceeding with the accounting, integrally, in a subsequent book.

When should entries be made in LALUR?

In part A, adjustments of net profit in the period are performed during the period itself or in the final date of it (according to the quarterly or annual calculation system), when determining the statement of taxable income.

In part B, concurrently with adjustment entries made in part A, or by the end of each period (quarterly or annual).

Can LALUR accounting be performed through electronic system?

Yes. LALUR may be accounted using the electronic system of data processing, in compliance with rules enacted by Federal Revenue Secretariat. The accounting in continuous forms, whose sheets must be numbered, shall follow the sequential order, on a mechanical or typographical basis, and shall have opening and closing terms (RIR/99, art. 255 and 263; IN SRF nr. 68/1995; Decree COFIS nr. 13/1995).

In which division must LALUR be registered?

The registration of LALUR is excused from any agency or division (IN SRF nr. 28/78, 1,3).

Is LALUR exempt from any authentication?

No. Although excused from registration or authentication by a specific official agency, it must contain the opening and closing terms with date and signature of the company legal representative or a qualified accountant (IN SRF nr. 28/78, 1,3), so that LALUR is effective, together with federal inspection.

Does LALUR have to be presented with the declaration?

No. However, when declaration is delivered and adjustments of net profit are not made in LALUR, as well as taxable income statement, and corresponding records in control accounts, such declaration is not considered as part of an accounting.

When the company calculates its incomes through the taxable income, can the fact of simply not accounting LALUR cause the arbitrage by tax authorities?

Yes, since one of the determining hypothesis of profit arbitrage by tax authorities occurs due to the lack of accounting as established by commercial or tax laws (RIR/99, art. 530), including LALUR when it is not properly accounted.

How to account losses in LALUR? What is your relation to losses registered in accounting?

For better understanding losses, bear in mind that there are two different losses: accounting loss, calculated by the accountancy in the Income Statement, and tax loss, calculated in the taxable income statement.

The absorption of accounting losses follows definitions of corporate legislation. The compensation rules of tax losses are defined by the income tax legislation.

Therefore, the compensative loss, for tax purposes, is the loss calculated in the taxable income statement of a certain period.

This loss is registered in part B of LALUR, for compensation in subsequent periods (regardless of the compensation or absorption of accounting loss). Its control is exclusively performed in part B of LALUR, using a different account (sheet) for the loss corresponding to each period. 

Using this loss for compensation with taxable income previously calculated in subsequent period-basis may be partial or total, regardless of the deadline; in each compensation period-basis, the limit of 30% of the respective net profit adjusted must be respected, following to debit in control account - part B, the value used, transferring it to Part A of the accounting book, to be computed in the taxable income statement, being registered as exclusion.

Note:

The tax loss existing up to 12/31/95, handled in part B of LALUR, is monetarily adjusted only until this date based on UFIR of 1/1/96 (R$ 0.8287).

Is there a term for compensation of tax losses?

No. According to the tax legislation, there is no term for compensation of tax losses, even in relation to those calculated prior to the publication of Law nr. 8,981/95, with editions in Law nr. 9,065/95.

Is there a limit for compensation of tax losses?

Starting on January 1st, 1995, to determine the taxable profit, the net profit adjusted by additions and exclusions anticipated or authorized by income tax legislation may be reduced in thirty percent (30%) at most.

Does the law distinguish compensation of operating and non-operating losses?

Yes. From 1/1/96 on, the article 31 of Law nr. 9,249/95 established restrictions to the compensation of non-operating losses, which must be compensated only with profits of same nature, in compliance with the legal limit of compensation (IN SRF nr. 11/96, art. 36).

In the corresponding calculation period, the non-operating incomes (positive or negative) will compose the taxable income.

Note:

The non-operating incomes of all disposals occurred during the period must be calculated in groups (IN SRF nr. 11/96, art. 36, §§ 3).

For tax legislation, what is considered a non-operating loss?

A non-operating loss is the negative result obtained in the assets disposal or fixed assets rights, which is equal to the negative difference between the value through which assets were disposed and its accounting value (IN SRF nr. 11/96, art. 36, §§ 1 and 2).

Is there any exception to the application of rules relating to comparison and difference between tax and non-operating losses for compensation?

Yes. Rules are not applied in relation to separation of tax and non-operating losses, resulting from write-off of assets or fixed assets rights, since they are not useful anymore, or obsolete, even if they are disposed later as scrap (IN SRF nr. 11/96, art. 36, § 12).