On March 17, 2023, the Federal Supreme Court (STF) judged ADI 4905 and RE 796939, whose general interest has been acknowledged (General Repercussion Topic No. 736 (ADI 4905 and RE 796939), which discussed the constitutionality of article 74, paragraphs 15 and 17 of Law 9430/96, that instituted a 50% fine for taxpayers whose administrative request for tax refund or offsetting is denied.
In this unanimous decision, the unconstitutionality of this rule was recognized, and the following legal thesis was established: “the isolated fine established by the law in the event of a mere refusal to ratify a tax offset is unconstitutional, once it does not constitute an illegal act capable of incurring an automatic penalty”.
It is important to highlight that the thesis in reference was adopted based on the vote of Minister Reporter Edson Fachin, that pointed in his own words: “the mere non-ratification of tax offsetting is not an illegal act capable of generating a tax penalty (…)”.
Moreover, the above-mentioned Leading Case has not yet been definitively concluded. However, because of its binding effect, the understanding adopted there can be used as guidance in the Judiciary and in the Administrative Council of Tax Appeals (‘Carf’).
Our tax team is available to provide clarifications and guidance on the subject adressed.
Co-authored by Thais Ribeiro Bernardes Casado and Beatriz Rossi Proença.
