Reversal of tax action decisions by the STF worries companies

Report from the portal Metrópoles shows that recent reversals of decisions in tax actions by the Federal Supreme Court have worried companies. Dr. Donovan Mazza Lessa, partner at Maneira Advogados, was interviewed to comment on the matter.

Reversal of tax action decisions by the STF worries companies

November 24, 2022

STF ministers will judge whether court decisions should automatically override actions that have already become final and unappealable

Bianca Alvarenga

11/24/2022

(Photo: Rafaela Felicciano/Metrópoles)

The Federal Supreme Court (STF) is discussing a sensitive topic for many companies: the maintenance, or not, of judicial decisions on the payment of taxes. The matter, which has been called a reversal of definitive decisions, could impact companies that have already obtained the right to tax exemption in final and unappealable actions.

If the matter is changed by the court ministers, a company that won a legal case to stop paying a tax may have that decision reversed.

Today, for the initial decision to be invalidated, it is necessary for the tax body (Federal Revenue or State Treasury) to initiate a procedure to reinstate the charge, such as a rescission action. If the STF decides to reverse definitive decisions, the collection of the tax will be resumed automatically.

The trial took place in a virtual plenary session until Tuesday (22/11) and the ministers had already formed a majority, by 7 votes, in favor of the immediate reversal of decisions. However, as Minister Edson Fachin requested to highlight, the trial will proceed to the in-person plenary session, with no date yet set for it to take place.

In the plenary session, voting will have to be restarted from scratch. This means that, although unlikely, it is possible that some of the judges will change their position.

CSLL and IPI

According to Gustavo Taparelli, partner at Abe Advogados, if approved, the Supreme Court's decision tends to mainly reach an old discussion about the payment of Social Contribution on Net Profit (CSLL), a federal tax.

He explains that, in the 90s, many companies managed to obtain, through legal actions, exemption from the charge or reversal of tax credits. The problem is that the Supreme Court validated the legality of this tax 20 years ago and, even so, because of the initial decisions, several companies continue without paying CSLL.

“The point is to know how the Supreme Court will modulate the effects of the decision. In other words: whether the collection of the tax will be retroactive, or whether it will only be based on the decision of the ministers regarding the constitutionality of the charge”, says the tax lawyer Donovan Lessa.

Although the CSLL is at the center of the discussion, there are also specific issues about the Tax on Industrialized Products (IPI), such as one that would impact the Havan store chain.

Legal uncertainty

The topic is followed with concern by companies, as any pro-tax decision would have an unexpected financial impact.

“Although some tax theories have become obsolete with the advancement of jurisprudence in the courts, there will be great legal uncertainty for taxpayers, who may be surprised by the demand for a tax charge that they had already excused, due to a favorable final and unappealable decision”, says Roberta Romano, partner at the law firm Neder e Romano.

However, there are lawyers who point out that the STF's decision could supersede tax and competition equality over the risk of legal uncertainty that the issue brings, which would be positive.

This is because previous court decisions create situations of imbalance, such as two companies with the same profile and sector of activity, with one of them paying a certain tax and the other not, having acquired this right through the courts.

“The STF is judging the extent to which the protection of legal certainty surpasses free competition. It is considering two important legal principles. It seems that the ministers will decide that, in the case of tax and competition inequality, the Supreme Court will honor the equalization of rights”, assesses Lessa.

https://www.metropoles.com/brasil/economia-br/reversao-de-decisoes-de-acoes-tributarias-pelo-stf-concer-empresas