Breaking a tax decision does not create insecurity, says STF – 02/22/2023 – Market

Despite criticism from lawyers and businessmen about the judgment that broke definitive decisions on tax issues, ministers of the STF (Federal Supreme Court) have maintained that the court’s decision did not create legal uncertainty and ensured equality between taxpayers.

In public and behind the scenes, members of the court have pointed out that there was no surprise in the understanding signed by the Supreme Court on the 8th.

On the occasion, the ministers defined that final decisions (transacted in rem judicata) on tax matters lose effect from the moment there is a different judgment by the STF.

In practice, this means that a taxpayer who has obtained a favorable tax decision in the past, in a case that later has a different decision by the Supreme Court, can be sued by the Federal Revenue without the need for a rescission action.

The understanding was unanimous among the 11 ministers and there were only disagreements regarding when the collection of taxes that were not collected should start to be made: whether from this month’s decision —which would create a “time frame”— or from of past judgments, on occasions when the STF applied a new understanding regarding a certain tax.

The last understanding prevailed, in a close vote, by six to five. The majority current was composed by ministers Luís Roberto Barroso, Gilmar Mendes, André Mendonça, Alexandre de Moraes, Cármen Lúcia and Rosa Weber.

Among the companies affected by the judgment are those that, since the 1990s, have managed to stop paying CSLL (Social Contribution on Net Income). In 2007, the Supreme Court decided that this tax was constitutional, when judging an ADI (direct action of unconstitutionality).

STF ministers have pointed out that companies that had final decisions would have to start paying CSLL after the 2007 decision, which recognized the validity of the tax – and that businessmen who acted responsibly, in their view, did so .

Braskem, one of the companies that had taken advantage of not paying the CSLL, for example, resorted to the STF to maintain this situation. However, after the 2007 decision, he took precautions and did not fail to collect the tax, even with the possibility of winning the case in court.

“Since 2007, the year in which the STF reestablished the possibility of charging this contribution, it has regularly collected the ‘CSLL’, having no outstanding amounts to be collected”, said Braskem in a note after the judgment. According to the company, the decision does not imply any impact for the company.

A part of the Supreme Court points out that the final and unappealable decisions that allowed taxpayers not to collect taxes for years created a “privileged caste” and that the decision of the last 8th corrects this distortion.

They also point out that the understanding of the STF must be followed by the Tax Authorities when a certain tribute is invalidated by the court. In other words, it goes both ways.

After the trial on the 8th and criticism from lawyers and businessmen, Minister Luís Roberto Barroso decided to go public to state that there was no legal uncertainty created by the STF decision. He was the rapporteur of one of the actions that led the STF to sign a thesis on the subject.

“The legal uncertainty was created by the decision, even after the Supreme Court’s guidance that the tribute was due, to continue not to pay it or not to provision it”, stated Barroso.

“From the moment the Supreme Court says that the tribute is due, those who did not pay or provision made a bet”, said the minister.

Barroso highlighted the importance of a certain tax being levied on all players in the market, because, if this were not the case, whoever obtained an old res judicata would have a competitive advantage over competitors.

In Congress, part of the deputies who criticized the Supreme Court’s decision presented proposals with the intention of reversing or mitigating the effects of what was decided by the court.

The subject was even addressed by the mayor himself, Arthur Lira (PP-AL), on the 15th.

Lira defended that issues like these should have an absolute majority in the Supreme Court and stated that he already has on his radar “a couple of PECs [Proposta de Emenda à Constituição] and about six bills” to discuss the decision.

“These issues, when they affect a range of aspects of investors, companies, the financial life of the country, by 6 to 5 weaken the decision. In my point of view, they should, by obligation, have a minimum quorum of three fifths, a majority superabsolute decision of the Federal Supreme Court with a pacified thesis regarding such a delicate subject”, said Lira.

The first parliamentarian to address the issue was federal deputy Pedro Paulo (PSD-RJ). He introduced a bill and a complementary bill.

The first, in the words of the parliamentarian, is to “reestablish res judicata”. The text proposes a modulation by creating a timeframe that delimits the period over which the decision will take effect.

The parliamentarian justifies the PL by stating that the court’s decision is a “harmful scenario for legal certainty” and mentions that it is necessary to “guard trust and predictability”. “It is not convenient to introduce the biggest fiscal surprise of the decade to taxpayers.”

“The practical consequences of the decision, without modulation of effects, should have been considered by the eminent ministers, given that one must always strive for stability, reliability and predictability of the actions of the Public Power, this being the maximum revelation of the principle of the Rule of Law” , says the text.

In the complementary bill, which the parliamentarian claims to be a kind of “plan B” if it is not possible to reverse the decision of the STF —although it is a more likely proposal to be approved—, Pedro Paulo proposes the installment of the amounts.

In this case, the debtor who adheres to the transaction will have up to 84 months (seven years) to settle the balance with a 100% discount on interest and fines, preserving the monetary correction.

If the taxpayer eliminates the liability in 12 months, in addition to interest and fines, he will also be free of monetary correction.

The three federal deputies on the Novo bench, in turn, presented two bills. One of them also deals with the possibility of paying in installments the debt of the taxpayer who is affected by the court’s decision.

Another PL aims to make the Federal Revenue have to trigger the taxpayer who already has a decision concluded through a rescission action. Thus, the effect of the decision of the STF will not be automatic.

Still on this front, deputy Fábio Garcia (União Brasil-MT) suggested a PEC (Proposed Amendment to the Constitution) which, according to him, is to “guarantee legal security in the country”. 171 signatures are needed for the proposal to pass through the Chamber.

The text proposes that changes in the jurisprudence of the STF and STJ (Superior Court of Justice) must be approved by two thirds of its members and that the decisions will only produce effects “to facts that occurred after their utterance”.