STF: government has 1 extra year to seek assets from debtors – 02/19/2023 – Market

The STF (Federal Supreme Court) unanimously decided that the Union can count on an extra year to locate tax debtors or pledge their assets without this being deducted from the five-year period for collection limitation.

The trial was concluded last Friday (17) in the virtual plenary of the Court.

The period of one year is provided for in article 40 of the Law on Tax Foreclosures. The device allows the judge to suspend the course of execution when the debtor is not located or goods that can be seized to ensure payment are not found.

During the suspension, which can last up to one year, the five-year limitation period for collection is frozen.

If, at the end of 12 months, neither the debtor nor his property have been located, the judge will order the files to be archived, and the statute of limitations will begin to run normally again. If there is no payment within that interval, intercurrent prescription is declared.

The argument of the original action to question the device is that the CTN (National Tax Code) does not provide for the interruption of the limitation period. The appeal, however, was rejected by the plenary.

The rapporteur, Minister Luís Roberto Barroso, argued that, although the inclusion of the extra period of one year was made by ordinary law (while the CTN is a complementary law), “there is no defect of unconstitutionality”.

According to him, the legislator was inspired by the model established in the CTN itself for situations of suspension of prescription, adapting the device to the particularities verified in the course of a collection action. Barroso noted that the deadline for extinguishing the tax credit remains the same in both cases.

The rapporteur was accompanied by all ten ministers. The action has general repercussions —that is, the understanding is applied to other actions that deal with the same theme.

Barroso highlighted in his vote that, after the suspension of execution for one year, the counting of the intercurrent limitation period must start counting “regardless of the shelving of the deed”. That is, even if the judge takes time to pronounce, the five-year period for the Treasury to demand payment of debts begins automatically.

“In several situations, the aforementioned judicial pronouncement never comes to fruition. In these cases, preventing the automatic start of the period counting after the end of the suspension could lead to the eternalization of tax foreclosures, contrary to the principles of legal certainty and due process legal, especially in view of the requirement of a reasonable duration of the process”, said the minister.

He cites data from the CNJ (National Council of Justice), which show that there are 26.8 million pending tax foreclosures in the country. These processes represent approximately 35% of the total pending cases and 65% of the pending executions in the Judiciary.

The congestion rate is 90%, that is, of every 100 tax execution processes that were processed in the year 2021, only 10 were downloaded.