Donovan Lessa speaks to VALOR about discussing compensation in tax enforcement actions

The newspaper Valor Econômico reported that the STJ will judge an appeal that deals with the possibility of taxpayers discussing compensation in tax enforcement actions. The newspaper highlighted that the appeal was presented by the company Raízen, and heard Dr. Donovan Lessa as the company's representative in the action.

STJ will judge use of tax enforcement to discuss compensation

Analysis of the case by the 1st Section is scheduled for Wednesday

By Joice Bacelo — From Rio

Image: Rapporteur, minister Gurgel de Faria, will discuss the correct interpretation of article 16 of the Tax Execution Law — Photo: Lucas Pricken/STJ

25/10/2021

The Superior Court of Justice (STJ) will analyze, this week, the possibility of taxpayers discussing compensation – the use of credit to pay taxes – in tax enforcement actions. The ministers will deal with cases in which accounts were found, the Treasury did not approve it, as it understood that the credit was undue, and filed a lawsuit to collect the tax that was uncovered.

They will tell you whether these lawsuits are specific to discussing outstanding debts or may address administratively denied credit. Lawyers say that if tax enforcement is restricted to debt, taxpayers will have no chance against the tax authorities.

Compensation alone, they say, would be a confession that the tribute is due. In addition to losing and having to pay the amounts to the government, they add, the credits they believe they are entitled to and were denied by administrative decision will also be compromised.

The trial is scheduled for Wednesday and will be held in the 1st Section. The collegiate standardizes the understanding that must be adopted in the STJ's public law classes and, despite not having binding effect, these decisions are generally considered by regional and state courts.

This topic will be analyzed through an appeal presented by Raízen Combustíveis, which lost the discussion in the 2nd Panel. It involves the National Treasury and its rapporteur is Minister Gurgel de Faria (EREsp 1795347).

The correct interpretation of paragraph 3 of article 16 of the Tax Execution Law (nº 6,830, of 1980) is discussed. This provision states that compensation cannot be dealt with in tax enforcement actions.

Lawyers understand that there is an impediment for the taxpayer to request the extinction of the tax due to compensation to be made – proposed in the enforcement action itself. It is different from compensations already made and not administratively recognized. For this second hypothesis, they argue, there would be no fence.

“It is a vital issue for the full exercise of taxpayer defense”, says lawyer Luiz Gustavo Bichara, tax attorney at the Brazilian Bar Association (OAB). The Federal Council acts as an interested party in the process that will be judged by the STJ (amicus curiae).

Representative of Raízen in this case, Donovan Lessa, from Maneira Advogados, states that the STJ judged the issue on a repetitive basis in 2010 in a manner favorable to the taxpayer. But, since then, the Treasury has been interpreting that only approved compensations could be dealt with in enforcement actions and this understanding has been considered by the ministers.

“It just makes no sense. If the compensation is approved, there will be no tax enforcement action because the debt will have been covered by the credit”, he says. He highlights that the case judged in 2010, moreover, dealt with administratively rejected compensation. "And this appeal was provided. If the STJ decides now that it cannot, it will be changing what it decided back then on a repetitive basis."

The understanding, in the Attorney General's Office of the National Treasury (PGFN), is that there is an express prohibition in law and only through a legislative change could it be possible to deal with compensation in tax executions.

“This does not mean that the taxpayer will not be able to discuss the credit. He can do so through an annulment or ordinary action”, emphasizes attorney Marcelo Kosminsky, head of the PGFN Special Monitoring Center at the STJ.

Gabriel Bahia, the attorney handling the case, adds that a different understanding, to allow compensation to be dealt with, “would generate a huge delay” in tax executions both by the Union and by States and municipalities. He also understands that the case involving Raízen could not even be admitted.

“It is under embargo of divergence. Therefore, divergent decisions on the subject must be presented in the STJ groups and this divergence does not exist. The 1st and 2nd Panels have the same understanding”, states Bahia.

Company lawyers, however, say that this understanding puts the credits involved in these discussions at risk. Leonardo Gallotti Olinto, partner at Daudt, Castro e Gallotti Olinto Advogados, states that “there is a great chance” that the taxpayer will lose the right to use due to prescription.

Leonel Pittzer, from Fux Advogados, also a specialist in the tax area, draws attention to another jurisprudence of the STJ, which says that the request for compensation or reimbursement at the administrative level does not interrupt the statute of limitations for actions for the repetition of undue debts – to recover undue payments to the government.

The taxpayer has up to five years after paying the undue tax to recover the credit. "If you compensated, discussed it at the administrative level and lost, the execution came and you were unable to claim compensation as a defense, you will probably fall into this other jurisprudence of the STJ. It's a snooze."

https://valor.globo.com/legislacao/noticia/2021/10/25/stj-vai-julgar-uso-de-execucao-fiscal-para-discutir-compensacao.ghtml