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PROVISION FOR JUDICIAL LIABILITIES | 6 Months Ended
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Jun. 30, 2020
PROVISION FOR JUDICIAL LIABILITIES |
PROVISION FOR JUDICIAL LIABILITIES | 20. PROVISION FOR JUDICIAL LIABILITIES The Company and its subsidiaries are involved in certain legal proceedings arising from the normal course of business, which include tax, labor and civil risks. The Company classifies the risk of unfavorable decisions in the legal proceedings as probable, possible or remote. The Company records provisions for losses classified as probable, as determined by the Company’s Management, based on legal advice, which reflect the estimated probable losses. Contingencies classified as possible loss are disclosed based on reasonably estimated amounts. The Company’s management believes that, based on the elements existing at the base date of these unaudited condensed consolidated interim financial information, its provision for tax, civil, commercial and other, as well for labor risks, accounted for according to IAS 37 is sufficient to cover estimated losses related to its legal proceedings, as set forth below: 20.1. Rollforward of provisions for probable losses, net of judicial deposits
|  | June 30,
|  | 2020
|  | Judicial |  |  |  |
|  | deposits |  | Provision |  | Provision, net
Taxes |  | (130,502) |  | 3,137,046 |  | 3,006,544
Labor |  | (54,975) |  | 234,300 |  | 179,325
Civil and environment |  | (3,337) |  | 258,919 |  | 255,582
|  | (188,814) |  | 3,630,265 |  | 3,441,451
|  | December 31,
|  | 2019
|  | Judicial |  |  |  |
|  | deposits |  | Provision |  | Provision, net
Taxes |  | (124,133) |  | 3,176,503 |  | 3,052,370
Labor |  | (50,464) |  | 227,139 |  | 176,675
Civil and environment |  | 273 |  | 283,159 |  | 283,432
|  | (174,324) |  | 3,686,801 |  | 3,512,477
20.1.1. Changes in the provision according to the nature of the proceedings for probable losses
|  | June 30,
|  | 2020
|  |  |  |  |  | Civil and |  | Contingent |  |
|  | Tax |  | Labor |  | environment |  | liabilities (1) |  | Total
Beginning balance |  | 492,413 |  | 227,139 |  | 64,897 |  | 2,902,352 |  | 3,686,801
Payments |  | (22,706) |  | (16,161) |  | (13,826) |  |  |  | (52,693)
Write-off |  | (25,331) |  | (20,347) |  | (18,807) |  | (4,150) |  | (68,635)
Additions |  | 5,362 |  | 30,920 |  | 5,951 |  |  |  | 42,233
Monetary adjustment |  | 6,969 |  | 12,749 |  | 2,841 |  |  |  | 22,559
Ending balance |  | 456,707 |  | 234,300 |  | 41,056 |  | 2,898,202 |  | 3,630,265
| 1) |  | Amounts arising from lawsuits with probability of loss possible and remote, measured and recorded at the estimated fair value resulting from the business combination with Fibria, in accordance with paragraph 23 of IFRS 3 – Business Combination.
|  | December 31,
|  | 2019
|  |  |  |  |  | Civil and |  | Contingent |  |
|  | Tax |  | Labor |  | environment |  | liabilities (1) |  | Total
Beginning balance |  | 296,869 |  | 50,869 |  | 3,532 |  |  |  | 351,270
Business combination |  | 139,462 |  | 185,157 |  | 64,974 |  |  |  | 389,593
Payments |  | (34) |  | (34,794) |  | (5,532) |  |  |  | (40,360)
Write-off |  | (3,875) |  | (55,730) |  | (13,434) |  |  |  | (73,039)
Additions |  | 46,603 |  | 50,521 |  | 10,100 |  | 2,902,352 |  | 3,009,576
Monetary adjustment |  | 13,388 |  | 31,116 |  | 5,257 |  |  |  | 49,761
Ending balance |  | 492,413 |  | 227,139 |  | 64,897 |  | 2,902,352 |  | 3,686,801
| 1) |  | Amounts arising from lawsuits with probability of loss possible and remote, measured and recorded at the estimated fair value resulting from the business combination with Fibria, in accordance with paragraph 23 of IFRS 3 – Business Combination.
20.1.2. Tax For the six-month period ended June 30, 2020, the Company was a defendant in 46 (forty-six) administrative proceedings as well as tax lawsuits in which the disputed matters related, CSLL, IRRF, PIS, COFINS, ICMS, , among others whose amounts are provisioned for when the likelihood of loss is deemed probable by the Company’s external legal counsel and the Management. 20.1.3. Labor For the six-month period ended June 30, 2020, the Company was a defendant in 1,180 (one thousand, one hundred and eighty) labor lawsuits. In general, labor lawsuits are related primarily to matters frequently contested by employees in agribusiness companies, such as certain wages and/or severance payments, in addition to suits filed by outsourced employees of the Company. 20.1.4. Civil and environment For the six-month period ended June 30, 2020, the Company is a defendant in approximately 28 (twenty-eight) civil and environmental lawsuits. Civil proceedings are related primarily to payment of damages, such as those resulting from contractual obligations, traffic-related injuries, possessory actions, environmental restoration obligations, claims and others. 20.2. Provisions for possible losses The Company is involved in tax, civil and labor lawsuits, for which losses have been assessed as possible by management with the support from legal counsel and therefore no provision was recorded:
|  | June 30, |  | December 31,
|  | 2020 |  | 2019
Taxes (1) |  | 6,379,823 |  | 7,504,398
Labor |  | 293,904 |  | 279,934
Civil and environment (1) |  | 3,395,437 |  | 2,995,576
|  | 10,069,164 |  | 10,779,908
| 1) |  | The amounts above does not include the fair value adjustment allocated to probable contingencies of R$2,865,364, which were recorded at fair value resulting from business combinations with Fibria, in accordance with paragraph 23 of IFRS 3 - Business Combination, as presented in note 20.1.1. above.
Main nature of these contingencies are disclosed in the annual financial statements for the year ended December 31, 2019 and have not been significantly changed during this period.

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