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Brazilian Supreme Court judges important tax issues unfavorable to taxpayers

Brazilian Supreme Court judges important tax issues unfavorable to taxpayers

On August, the Brazilian Supreme Court (STF) judged important tax issues unfavorable to taxpayers. Among them, four deserve to be highlighted:

  • Fiscal War of ICMS – RE nº 628,075 (Theme 490)

The topic 490 of the General Repercussion brought to the discussion the fact that the State of destination may or may not deny the company acquiring goods the right to credit ICMS incurred in an operation originating from another federated entity that unilaterally grants tax benefit.

The Court, by majority, dismissed the Extraordinary Appeal as it understood that Article 8, item I, of Complementary Law No. 24/1975, does not violate the constitutional principle of non-cumulativity. In this sense, the following thesis was established: “The proportional reversal of ICMS credit carried out by the State of destination, due to the presumed tax credit granted by the State of origin without authorization from the Farm Policies National Council (CONFAZ), does not violate the principle constitutional principle of non-cumulativeness “.

  • Additional 10% to FGTS – RE nº 878,313 (Theme 846)

The subject deals with the constitutionality of the social contribution provided for in article 1 of Complementary Law 110/2001 (10% contribution on FGTS deposits). In the Appeal, the Appellant had argued for the exhaustion of the purpose for which the Union instituted the referred contribution, namely, the full settlement of the debt in the FGTS accounts arising from inflationary purges.

In this sense, the majority of Ministers understood that the contribution is constitutional, following Minister Alexandre de Moraes, who highlighted in his vote that the tax did not exhaust its purpose, and that the contribution under discussion “was created to preserve the social rights of workers provided for in art. 7, III, of the Federal Constitution, this being its genuine purpose. ”. As a result, the Extraordinary Appeal was dismissed, with the following understanding being established: “The social contribution provided for in Article 1 of Complementary Law No. 110, of June 29, 2001, is constitutional, in view of the persistence of the object for which was instituted “.

  • Social security contribution on overtime and additional hours – RE nº 1,260,750

In this case, in which the incidence of social security contributions on overtime and additional night hours, unhealthy work, dangerous work and transfer was discussed, the Ministers acknowledged the lack of general repercussion of the issue, as it was not a constitutional matter, so that it would be up to the Superior Court of Justice (STJ) to define the topic.

With this decision, the STJ’s understanding is maintained, in the sense that it levies social security contributions on overtime and nighttime hours, unhealthy, dangerous and transfer.

  • IPI levied on the resale of imported products – RE No. 946,648 (Theme 906)

 The topic deals with the controversy about the collection of the Tax on Industrialized Products (IPI) in two moments: the customs clearance of industrialized goods and the first exit of the importing establishment for sale in the domestic market. The Court, by majority, followed the vote of Minister Alexandre de Moraes, who understands that, although they are operations carried out by the same taxpayer, two different generating facts are configured.

The Minister also defended that “if there were no IPI in the second stage, imported products would have a price advantage in competitiveness with the national product (…).” As a result, the Extraordinary Appeal was dismissed, and the following understanding was established: “The incidence of the Tax on Industrialized Products – IPI is constitutional in the customs clearance of industrialized goods and when the importing establishment leaves for sale on the domestic market”.

Our Tax practice team is ready to provide guidance and further information on this topic.

Author: Amanda Cochito Boffo

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