8/30/2022
The 1st Panel of the Superior Court of Justice (STJ) held, on August 16, 2022, that it is possible to deduct from the calculation basis of the Income Tax (IRPJ) the expenses with the remuneration of administrators and directors, even if not based on a fixed and monthly amount.
The case reached the Superior Court with the filing of Special Appeal No. 1,746,268/SP, by the taxpayer, against a decision held by the Federal Regional Court. The appealed judgment denied the taxpayer the right to deduct unlimitedly from the calculation basis of the IRPJ the remuneration paid to administrators and directors, based on the requirement, established by the Normative Instruction of the Federal Revenue of Brazil No. 93/1997, that their remuneration was established based on a fixed and monthly amount.
In the Superior Court of Justice, however, most Ministers understood that it is not possible to shape the basis for calculation of the IRPJ based on a Normative Instruction, as it institutes an obstacle to deductibility through interpretation conveyed in normative administrative acts.
In this sense, the 1st Panel of the STJ decided that the remuneration paid to managers and directors is deductible, even if not based on fixed and monthly amounts, given that possible requirements regarding the deductibility of the remuneration of managers and directors must be established by law.
Although it does not have an erga omnes effect, the decision may indicate a new position by the Court on the matter, which makes it possible for taxpayers to file new actions in order to benefit from the favorable judgment.
Our tax team is available to provide more information and guidance on these and other topics.
Co-authored by: Enrico Sarti e Guilherme Rodrigues de Matos
