Reinstatement and 150% fine on the STF agenda – 10/02/2024 – What tax is this

The STF (Supreme Federal Court) may resume judgment this Wednesday (2) on two tax issues involving large amounts.

Two direct actions of unconstitutionality (ADIs 6040 and 6055) question the reduction in the reimbursement percentage provided for in Reintegra, a program to encourage the export of manufactured products.

The CNI (National Confederation of Industry) and the Instituto Aço Brasil ask that the STF define that the Executive Branch can set the program’s rate, but cannot reduce it after this definition.

The case’s rapporteur, Minister Gilmar Mendes, assesses that the reimbursement percentage is an option of the Executive and that the measure is not unconstitutional. He has already been accompanied by ministers Alexandre de Moraes and Dias Toffoli.

Minister Edson Fachin disagreed with the rapporteur, even assessing that the percentage applied should ensure, in each production chain, the full return of the tax residues present. He was accompanied by minister Luiz Fux.

Leonardo Gallotti Olinto, partner at Daudt, Castro e Gallotti Olinto Advogados, states that the government’s discretionary rate changes affect companies’ planning and prevent the program’s objective of relieving exports from being achieved, in addition to representing a breach of a contract signed with the public authorities.

“I exported, I took into account when setting my price, to be competitive, that I would have a refund of X. Now, I will have a refund of overnight,” he says.

150% FINE

Also on the agenda is the extraordinary appeal against the decision of the Federal Regional Court of the 4th Region on the constitutionality of the qualified fine of 150%, when “the existence of collusion between the legal entities that are part of the economic group, in fact, tending to tax evasion” is verified.

On a previous occasion, the STF decided that any and all fines that exceed the limit of 30% of the tax should be considered confiscatory. The Union claims that this rule does not apply to punitive fines. The theme has general repercussion. The STF began the trial on September 5th, but after oral arguments, the trial was suspended.

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