3/2/2023
In recent weeks, the Federal Supreme Court (‘STF’) concluded the judgment of General Repercussion Issues No. 881 and 885, both addressing the future effects of res judicata of a different constitutional interpretation that was subsequently adopted by the same Court. As can be expected, the judgment caused an extreme stir in the tax world, in view of the countless impacts that the decision may generate, in addition to the huge questioning of the legal security of this fundamental institution of tax law.
Issues 881 and 885 arose from a discussion related to the declaration of unconstitutionality of the Social Contribution on Net Income (CSLL) that occurred in 2002, when several taxpayers filed lawsuits and obtained final and unappealable favorable decisions in the courts. At this specific moment, the winners of the legal battles were granted decisions exempting them from paying the CSLL, which had the force of res judicata before the STF Plenary declared the constitutionality of this contribution.
Therefore, this controversy relates to the possibility of the Tax Authorities resuming the collection of amounts whose discussion already has force of res judicata, even after the deadline for filing a rescissory action. Theme 881 analyzes the cases in which the STF decides, in general jurisdiction (‘concentrated control’), the constitutionality of a tax previously declared unconstitutional, whilst Theme 885 deals with decisions that take place in specific jurisdiction (‘diffuse control’), subject to the general repercussion system.
It is known that the guarantee of res judicata is provided for in Article 5, item XXXVI of the Federal Constitution: “(…) the law shall not prejudice the vested right, the perfected legal act and the res judicata; (…)”, however, as determined by the STF’s decision, the res judicata may not be final if the STF’s judgment invalidates it.
In this way, the Plenary understood that a decision is only valid as long as the factual and legal context that gave rise to it remains intact, and should there be any changes, the decision will lose its effect and the new understanding consolidated by the Supreme Court can be applied.
One of the arguments used to defend the thesis is the principle of isonomy, which can be illustrated by the fact that a certain taxpayer, due to a favorable decision of the STF, may enjoy tax exemption, while the other taxpayers are required to pay it. The Supreme Court held, therefore, that maintaining a scenario like the one described above constitutes an advantage for one taxpayer over the others.
The decision that dealt with the loss of effects of a final decision (res judicata) was unanimous and is valid only for taxes collected on a continuous basis, i.e., those whose collection is renewed periodically, such as the Social Contribution on Net Profits (‘CSLL’). In the case of taxes collected once, such as Inter-Vivos Property Transfer Tax (‘ITBI’), for example, the right remains even after the STF’s decision on the matter.
There are still several points that were not specified by the Supreme Court decision, which should be defined in a Motion for Clarification.
Our tax team is available to provide clarification and guidance on the subject addressed.
Co-authored by: Enrico Sarti and Beatriz Rossi Proença.
