YEAR 2022 No 2 Volume 28

ISSN 2182-9845

Cooperative Compliance: SWOT Analysis for the Brazilian CONFIA Program

Antonio Lopo Martinez


Cooperative Compliance; Tax Administration; Taxpayer; Tax Advisor; Trust.


Cooperative compliance ensures that the taxpayer–Tax Administration relationship is based on transparency, mutual trust, and preventive actions of assistance and collaboration. These three foundations are formalized into six characteristics, two of which (transparency and disclosure) apply to taxpayers and five of which (commercial awareness, fairness, proportionality, transparency, and responsiveness) apply to the Tax Administration. This article discusses cooperative compliance concepts, requirements, advantages, tax control framework (TCF), tax risk, and governance issues. It then considers some Brazilian initiatives, highlighting the exposure of the CONFIA proposal as a cooperative compliance program of the Brazilian Revenue Service (RFB). Using a SWOT analysis based on international experiences, we discuss the strengths, weaknesses, opportunities, and threat points for success in implementing the CONFIA program. Additionally, we offer recommendations regarding how to ensure an environment of increasing cooperation in the tax field in order to reduce tax litigation, which is a chronic problem of the Brazilian tax system. Cooperation between taxpayers and Tax Administration should be based on the responsibility of both parties operating under mutual trust and not tolerating opportunistic behavior on either side of the tax relationship.

Table of contents

1. Introduction
2. Rethinking the relationship between taxpayer and tax authorities 
2.1. What is cooperative compliance?
2.2. The taxpayer in the cooperative compliance approach
a) Requirements for a successful cooperative compliance program
b) Advantages of a cooperative compliance program
c) Tax risk management and certification policies 
2.3. Cooperative compliance in Brazil
a) Previous experiences in Brazil
b) CONFIA—Brazilian Tax Cooperative Compliance Program
c) Development of the Code of Good Tax Practices
3. SWOT Analysis for Cooperative Compliance in Brazil 
3.1. Strengths
3.2. Weaknesses
3.3. Opportunities
3.1. Threats
4. Recommendations for the Brazilian CONFIA Program 
5. Final Remarks