Donovan Lessa comments on the VALOR judgment in the STF that discusses the application of fines for undue compensation

Report published in the newspaper Valor Econômico informs that the STF will decide this week whether the Tax Authorities can charge a 50% fine on the refund, reimbursement or tax compensation amounts considered undue due to undue compensation. The report highlighted Dr. Donovan Mazza Lessa's comment on the topic.

STF decides whether Tax Authorities can charge a 50% fine on undue compensation

Impact for the Union will be R$32 billion if ministers prevent the charge

By Joice Bacelo
Rio

Photo: Nelson Jr,/SCO/STF

The Federal Supreme Court (STF) will decide, next week, the process that discusses the application of a 50% fine on the amounts of refund, reimbursement or tax compensation considered undue by the Federal Revenue – the so-called isolated fine. This is an expensive dispute for the Union. It will be R$32 billion in loss if it can no longer apply the punishment.

Taxpayers contest this fine because they are already subject to the application of another fine, the late payment fine. When the taxpayer understands that he or she is entitled to a credit against the Union for payments made in excess, he or she can make compensation, that is, use this credit to pay current taxes, in an administrative manner.

The Federal Revenue Service has a period of five years to validate this operation. If it is understood that such credit was not due, the compensation will not be approved. The debt that had been paid with the credit remains outstanding and two fines are applied to these amounts: the late payment fine – 20% – and the isolated fine, 50%.

Double Punishment

According to lawyers, this is a double punishment for the taxpayer – and ends up inhibiting compensation. The 20% fine, they say, would be a sufficient penalty.

“The 50% fine for simply not approving compensation, without identifying malicious conduct on the part of the taxpayer, directly violates the principles of proportionality, reasonableness and non-confiscation”, says Donovan Mazza Lessa, partner at Maneira Advogados.

Chances

“The majority of current decisions, from judges and regional courts, are favorable to taxpayers. And, in addition, the rapporteur at the Supreme Court also accepted the thesis”, observes tax expert Leonel Martins Bispo, from the Bispo, Machado e Mussy Advogados firm, betting on a victory for taxpayers.

He cites the rapporteur, Minister Edson Fachin, because this case has already been discussed in the Court's Virtual Plenary. It was in April last year. Fachin opened the trial with a vote against the imposition of the fine and, subsequently, minister Gilmar Mendes asked to be seen, suspending the discussions.

The following month, Luiz Fux, the president of the Court, presented a prominent request, moving the case from the Virtual Plenary to an in-person trial. When this happens, discussions go back to square one. The lawyers once again give oral arguments and all ministers vote – even those who had already taken a position (and may even change their position).

That trial is scheduled for Thursday. There are two actions: ADI 4,905 and RE 796939.

https://valor.globo.com/legislacao/valor-juridico/coluna/stf-decide-se-fisco-pode-cobrar-multa-de-50percent-sobre-compensacoes-indevidas.ghtml