Unfit CNPJ: what it is and how to solve it

Did you know that failure to submit declarations can render your CNPJ ineligible and lead to a series of complications for your company? The Brazilian Federal Revenue Service (RFB) has strict rules which, if not followed, can cause serious fiscal and operational problems for your business.

An unfit CNPJ can lead to a series of tax problems, including high fines, the inability to issue invoices and bank blocks.

In this article, you'll understand what CNPJ inapto means, how to identify this condition, what the main causes are and, above all, how to regularize CNPJ inapto online with the support of an accounting firm.

What is an unfit CNPJ?

O Unfit CNPJ is a status assigned by the Federal Revenue Service to companies that have failed to comply with ancillary tax obligations, such as submitting returns and statements for two consecutive years.

When this happens, the company's registration status becomes unfit, which prevents it from operating regularly.

What does unfit CNPJ mean in practice?

This means that the IRS considers the company to be irregular before the tax authorities. Although the CNPJ continues to exist in the system, it is, in practice, "frozen" for legal operations.

In short, the company becomes unable to issue invoices, participate in tenders, open a bank account and operate securely with suppliers and customers.

In addition, it is very important to note that in some cases, the partners themselves can be held responsible for the debts of the unfit company.

How do you know if your CNPJ is unfit?

The IRS can declare a CNPJ unfit after 90 days of failure to file returns. To check if your CNPJ is in this situation, you can access the Virtual Service Center (e-CAC Portal) and use the Pending Issues - Tax Situation service. If any pending issues are identified, it is crucial to act quickly to avoid further problems.

What are the effects of an unfit CNPJ?

Here are the main negative impacts for those with an unfit CNPJ:

• Impediment to issuing invoices;
• Difficulty in obtaining credit and financing;
• Cancellation of state and municipal registrations;
• Inability to participate in bidding processes;
• Loss of the Simples Nacional;
• Application of fines and interest on overdue obligations;

Consequences of CNPJ inaptitude

The consequences of having an unfit CNPJ go far beyond simply regularizing pending issues. Companies in this situation face difficulties such as:

• Impediment to Participation in TendersYour company is banned from participating in public tenders, which can significantly limit your business opportunities.
• Restriction of Access to Credits and IncentivesWith an unfit CNPJ, the company cannot obtain tax incentives or carry out credit operations involving public funds.
• Inability to Issue Tax DocumentsThe issuing of electronic invoices is blocked, making commercial operations difficult.
• Shareholder liabilityPartners can be held liable for the company's tax debts, which can result in administrative charges and tax foreclosures.

The most common causes of an unfit CNPJ

According to Normative Instruction 2119/2022 of the Federal Revenue Service, a CNPJ can be declared unfit for a number of reasons, among them:

Failure to submit declarations

All companies are obliged to send a series of periodic declarations to the tax authorities:

• Corporate Economic and Tax Information Statement (DIPJ);
• Simplified Corporate Declaration (DSPJ) - Inactive;
• Socioeconomic and Tax Information Statement (Defis);
• Single and Simplified Declaration of Socioeconomic and Tax Information (DASN);
• Simplified Annual Statement for Individual Microentrepreneurs (DASN-Simei);
• Declaration of Federal Tax Debts and Credits (DCTF);
• Withholding Income Tax Return (Dirf);
• Rural Property Tax Return (DITR);
• GFIP (Service Time Guarantee Fund and Social Security Information Collection Form)
• Digital Bookkeeping (ECD);
• Tax Accounting Bookkeeping (ECF);
• Digital Tax Bookkeeping for Contributions (EFD-Contribuições);
• Digital Tax Bookkeeping (EFD);
• E-Finance;
• Digital Bookkeeping of Tax, Social Security and Labor Obligations (eSocial);
• Digital Tax Bookkeeping of Withholdings and Other Tax Information (EFD-Reinf);
• DCTFWeb (Statement of Federal Social Security Tax Debts and Credits and those of Other Entities and Funds)
• Program Generator of the Simples Nacional Collection Document - declaratory (PGDAS-D).

In turn, when the deadlines for submission are not respected by the company, the tax authorities can declare the CNPJ unfit, preventing the legal entity from operating until it is regularized.

Company not located

A CNPJ can also be declared unfit when the company is not located by the tax authorities.

The tax authorities consider a company that is in one of the following situations to be not located:

• Failure to confirm receipt of two (2) or more pieces of correspondence sent by the RFB, as evidenced by the return of the Post Office Acknowledgement of Receipt (AR);
• Is not located at the address listed on the CNPJ, a situation proven by means of a Due Diligence Form; or
• If there is a complaint from an interested third party or a communication from any public body informing that the address on the register has not been found, after the RFB has carried out due diligence.

With irregularities in foreign trade operations

A company can keep unfit status in the CNPJwhen committing irregularities in foreign trade operations.

Companies with irregularities in their foreign trade operations are those that, for whatever reason, are unable to do so:

• Proof of the origin, availability and actual transfer, if applicable, of the funds used in foreign trade operations.

Other hypotheses for a company to be declared unfit

Finally, a company can also be declared unfit, and thus prevented from operating, until it regularizes its situation, in the following cases:

• Is domiciled abroad and has not appointed a legally constituted attorney or representative domiciled in the country;
• Are at a standstill, unless the standstill has been notified;
• Carrying out operations for third parties in order to cover up their real beneficiaries;
• Has participated, according to evidence, in an organization set up for the purpose of suppressing or reducing the payment of taxes or making the collection of tax debts impossible or detrimental, including by issuing tax documents reporting fictitious transactions or assigning non-existent credits or those of third parties;
• It was set up, according to evidence, to commit tax fraud, including for the benefit of third parties;
• Operating with products of an illicit nature, from theft or counterfeiting;
• Adopting illicit practices in the marketing of fuels;
• Smuggling, embezzlement, piracy or other illegal acts related to international trade; or
• Suspended for at least one (1) year;
• Late payment of taxes such as IRPJ, CSLL, PIS, COFINS, among others.

How do you find out if a company is unfit?

You can check your CNPJ registration status for free on the Receita Federal website. Simply go to the official Receita portal, click on "Consulta CNPJ" and enter your document number.

In the result, you will see whether the CNPJ is active, unfit, suspended or lowered. If the "inapt" condition appears, the reason for the irregularity and the history of omissions will be displayed, which will help you determine which declarations need to be regularized.

Unfit CNPJ: what to do?

If your CNPJ is unfit, the first step is to stay calm and seek expert advice. Here's how to regularize an unfit CNPJ:

1. identify overdue obligations

Through the Receita Federal report, it is possible to check which documents and declarations have not been submitted.

These documents vary according to the company's tax regime (Simples Nacional, Lucro Presumido or Lucro Real).

2. Prepare and send outstanding declarations

After the survey, it will be necessary to transmit all omitted obligations, even those relating to previous periods.

At this stage, having the support of an accounting firm such as CLM Controller is essential, as errors in rectification can lead to further pending issues.

3. Generate and pay the taxes due

In some cases, the IRS system will generate automatic fines for late submission of ancillary obligations.

It is essential to issue the corresponding DARF or DAS forms and make the payment or installment.

4. Wait for reactivation

Once the declarations have been submitted and the fines have been paid, the CNPJ's status will be automatically regularized within 72 hours.

You can check again on the Receita website. If the situation is not normalized, it is necessary to check if there are any outstanding issues.

5. Update registration data if necessary

If there has been a change of address, partners or company activity during the period of inactivity, you will need to update the CNPJ card with your state's Board of Trade and the Internal Revenue Service.

How to regularize an unfit CNPJ online?

Much of the regularization process can be done digitally. With a digital certificate (e-CNPJ), you or your accountant can:

• Access the e-CAC (Virtual Service Center);
• Consult pending issues;
• Send statements;
• Issue DARFs and vouchers;
• Making registration adjustments.

This is even easier when you have an accounting firm that already has integration with the Revenue and City Hall systems.

Tax regime and inapt CNPJ: how the framework influences

When analyzing the issue of inapt CNPJs, it is essential to understand how the choice of tax regime directly impacts the submission of mandatory returns and, consequently, the possibility of inaptitude.

Simples Nacional

Companies opting for the Simples Nacional must submit an annual DEFIS (Socioeconomic and Tax Information Statement) and monthly PGDAS-DIn addition to complying with municipal accessory obligations, such as electronic invoices.

Failure to submit DEFIS for two consecutive years, for example, can result in the CNPJ being disqualified. Therefore, keeping the accounts up to date and the documents submitted correctly is essential.

Presumed Profit

In Presumed ProfitThe company needs to send several declarations:

• DCTF (Declaration of Federal Tax Debts and Credits);
• ECF (Tax Accounting Bookkeeping);
• EFD-Contributions (monthly obligation detailing PIS and COFINS);
• GFIP (in the case of registered employees).

Failure to comply with these obligations also entails unfitness.

Real Profit

Companies in Real Profit have the greatest number of tax obligations. In addition to those mentioned under Presumed Profit, they must submit the ECD (Digital Bookkeeping) and Block K of SPED Fiscaldepending on the sector.

The high level of complexity makes it essential to have constant accounting monitoring by an accounting firm specializing in Real Profit companies, such as CLM Controller.

We offer complete advice, focusing on starting a businesstax planning, as well as consultancy services for pay less tax with total legal certainty.

Inactive CNPJ vs. unfit CNPJ: understand the difference

Don't confuse an unfit CNPJ with an inactive CNPJ. A CNPJ is considered inactive when the company has not carried out any operational, financial or non-operational activities for a certain period. Inaptitude, on the other hand, is a more serious situation, which occurs due to a failure to comply with tax obligations.

Unfit CNPJ: impact on reputation and business

Having an unfit CNPJ doesn't just cause legal and tax problems. It compromises the company's image in the market.

Suppliers may refuse to sell to irregular companies, customers may distrust the security of the business relationship and banks may block credit lines.

Companies that take part in tenders or provide services to public bodies can be disqualified immediately. This generates financial losses and affects business continuity.

How to prevent your CNPJ from becoming ineligible again

Once regularized, it is essential to prevent the company from becoming unfit again. See good practices:

1. Keep active accounts: a good accounting firm keeps track of the deadlines for all ancillary obligations and avoids omissions;
2. Get a valid digital certificate: it is essential for submitting declarations and consulting the e-CAC;
3. Keep an eye on the e-CAC mailbox: the IRS sends out important communications through this channel;
4. Avoid stopping the company without notifying the tax authorities: if you are no longer going to operate, you must formalize the cancellation of your CNPJ so as not to accumulate any outstanding debts;
5. Invest in financial organization: companies with a well-structured cash flow are less likely to neglect their tax obligations.

Conclusion

Now that you know what an inapt CNPJ is, what this condition means and how to solve the problem, it's time to take action to keep your company regularized and safe.

Avoiding this situation depends on organization, commitment to tax obligations and, above all, professional support.

A CLM Controller Accounting is a accounting office which can help your company to get out of inaptitude and remain in compliance with the IRS.

Get in touch with our team and find out how we can regularize your CNPJ and keep your company on the right track.