Supreme may return to deal with res judicata in tax matters – 05/10/2023 – What tax is this

The Federal Council of the Brazilian Bar Association and other taxpayer representatives have submitted requests for the STF (Federal Supreme Court) to once again discuss the validity of the so-called res judicata.

In February of this year, the court decided that final decisions (final and unappealable) on tax matters lose effect from the moment there is a different judgment by the STF.

As a result, a taxpayer who has obtained a favorable decision in the past, but whose situation is later changed by the Supreme Court, can be sued by the Federal Revenue Service without the need for a rescission action.

The judgments of this decision were published on the 2nd of May. The appeals (request for clarification – clarification of parts of a decision) were presented this week by the OAB council and other taxpayer representatives.

The Order points to three questions. The first refers to a 2011 report by the National Treasury, binding on the tax administration, which would set the initial milestone from which the Treasury could resume the right to collect the tax.

By the decision of the STF, it would be possible to demand payment from 2007, in the case of payment of CSLL (Social Contribution on Net Income), the date on which the Court considered this tax constitutional.

“It should be noted the need to establish an objective time frame compatible with the legal certainty that emanates from the res judicata, so that everyone (taxpayers and tax authorities) have the necessary predictability as to the moment when the effects of court decisions passed in judged”, says the entity in the embargoes.

The appeal also points out the omission of the judgment in relation to a decision of the STJ (Superior Court of Justice) of 2011. In it, the superior court states that the fact that the Supreme later manifests itself in the opposite direction to the final and unappealable decision in no way change the thing judged.

“What is not conceivable, however, is that a decision by the STJ —taken in the seat of a representative of controversy and unanimously— can represent nothing, even if, much later, this Federal Supreme Court has stated, as can be seen from the judgments embargoed parties, the cessation of the effects of res judicata”, states the OAB council.

The third point is the request to prevent the application of any penalty to taxpayers who, in good faith and supported by final and unappealable court decisions, failed to pay the respective tax and, subsequently, were assessed by the Revenue due to the new understanding of the Supreme. Among them, charging interest and updating the monetary value of the calculation basis.

Despite criticism from lawyers and businessmen, STF ministers have maintained that the court’s decision did not create legal uncertainty and ensured equality between taxpayers.

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