Understand what Carf is and what are its duties

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Body judges tax disputes between government and taxpayers on taxes. Counting holders and alternates, CARF has 90 directors, divided into three sections. Understand what CARF is and what are its attributions The Chamber of Deputies continues this Tuesday (4) the concentrated effort to vote on economic proposals. One of the bills to be analyzed — and that locks the voting agenda — is the one that restores the tie-breaking vote in favor of the government in CARF decisions. Understand what Carf is: What is it? Administrative Board of Tax Appeals What does it do? Judges disputes between government and taxpayers on taxes Who is part? Treasury and taxpayers’ representatives The Administrative Board of Tax Appeals emerged in May 2009 from the unification of three taxpayers’ councils. CARF’s main role is to adjudicate disputes between the government and taxpayers related to taxes. As it is a collegiate body, CARF is made up of representatives of the Treasury and taxpayers. CARF’s main role is to adjudicate disputes between the government and taxpayers related to taxes. Reproduction/ GloboNews Appointment Board members are appointed through a triple list. The names go through a selection committee, which verifies that they have knowledge and experience in tax law and federal and customs taxes. Afterwards, the nomination must be endorsed by the Minister of Finance. Only then can the councilor assume the mandate. Counting holders and alternates, CARF has 90 directors, divided into three sections. Processes According to the Ministry of Finance, the volume of disputes that end up at CARF is enormous. In 2023, more than 400,000 cases were opened, representing, in financial terms, almost BRL 4.5 trillion. From January to April, Carf concluded around five thousand processes, which added up to more than R$139 billion, according to the Ministry of Finance. What can change with the vote in the Chamber Deputy Beto Pereira (PSDB-MS) presented this Monday (3) his opinion on the project that establishes a rule favorable to the government in the case of ties in judgments at CARF. The changes in the rules are a central part of the economic area’s package to get around the public deficit forecast this year, of R$ 231.5 billion. Understand the main points of the proposal below: Quality vote The end of the so-called quality vote was approved in 2020 in the Legal Taxpayer MP, and started to favor the taxpayer in case of a tie. In January, the tie-breaking vote came back into effect as a provisional measure, but generated criticism. That’s because the final vote rests with the president of the class — a position occupied by a tax auditor. In theory, the change would benefit the Tax Authorities. By agreement, the parliamentarians decided to let the MP expire. The government then sent a bill, which will be analyzed by Congress. Treasury Agreement and OAB The rapporteur included in the text an agreement signed between the government and the Brazilian Bar Association (OAB). According to what was agreed upon, when a company or individual loses a case at CARF due to the casting vote, the fine and interest will be canceled, provided that the taxpayer pays the principal amount within 90 days. The debt can be paid in 12 consecutive monthly installments. In the event of non-payment or default of any of the planned installments, default interest will be resumed. The rapporteur also added the possibility for the taxpayer, if he does not agree with the waiver of the fine and interest, to appeal to Justice without having to present a guarantee, as is done today. According to the text, “taxpayers with payment capacity may be waived from presenting a guarantee for the judicial discussion of credits resolved in favor of the Public Treasury by the casting vote”. The ability to pay will be assessed considering the taxpayer’s equity. In cases where the taxpayer is unable to prove the ability to pay and needs to present a guarantee, the text guarantees the execution of the guarantee only after the final and unappealable decision of the judicial measure – when there is no longer any possibility of appeals. Active debt The rapporteur extended from 30 to 90 days the period for registering the taxpayer’s debt in the Union’s active debt. According to the rapporteur, this breaks the exclusivity of the Attorney General of the National Treasury (PGFN) in transacting with the taxpayer and allows the Federal Revenue to act. This opens up the possibility that the legislation will cover the collection of debts administered by the Federal Revenue Service that have not yet been registered as active debt. “What we are bringing is the possibility of transactions taking place at the Revenue before enrollment in the active debt. Today, registration can be done from 30 days. We brought it in for 90 days. It increased the deadline for the taxpayer to be enrolled in the active debt and within that period we allow the Federal Revenue to sponsor this transaction, something that was exclusive to the PGFN”, explained Beto Pereira. Appeal to Carf Pereira kept the limit at 60 minimum wages (79.2 thousand), unlike what the government had proposed in the initial text, which provided for 1,000 minimum wages (1.32 million). Limit of jurisdiction is the minimum value of the dispute that defines the competence of CARF to judge an administrative process — that is, it is the value from which the taxpayer can appeal to the council. “There was an appeal from the productive sector, parliamentary fronts and several confederations, a very big questioning about curtailing a taxpayer’s right with a limit of one thousand minimum wages. The step was too big”, said the rapporteur. “This could somehow make it impossible to access the demand, to be able to seek a decision at the last administrative level due to a limitation of jurisdiction. So, we decided to maintain the limit of 60 minimum wages for CARF approval”, he added. Oral support The text also ensures the oral support of taxpayers at the Federal Revenue Judgment Offices (DRJ), the first instance of the tax administrative process. Currently, , this is not possible. Another point is the linking of the DRJs to Carf’s precedents of case law. ALSO READ: Carf’s Rapporteur sees ‘with great difficulty’ voting on the project this Tuesday From January to April, Carf concluded about five thousand processes , which added up to more than R$ 139 billion Reproduction/ GloboNews

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