9/30/2021
On September 27, 2021, the Brazilian Supreme Court (STF) decided that Corporate Income Tax (IRPJ) and Social Contribution on Net Income (CSLL) shall not be levied on interests (SELIC rate) from the refund of undue tax overpayments.
In the judgment prevailed Dias Toffoli Minister’s understanding that the SELIC rate is an indemnity for the taxpayers, given the long time to receive the monetary values. In this way, there is not an asset increase (taxable event for IRPJ and CSLL).
Going further, the Supreme Court decided the decision has great economic, social, and political relevance (General Repercussion). Therefore, the established understanding shall be applied to all the lower courts.
Despite the favorable decision for the taxpayers, it is quite important to analyze the scope of the effects of the decision (Court Effects Modulation), that is, from when the understanding must be put in.
On tax matters, it is a common practice at the STF to condition the effects of the decision only to future events, in view of the economic effects on the federal budget, and also to the ongoing lawsuits related to past events.
Furthermore, the understanding about the SELIC rate may generate new legal discussions, such as the possibility of levying the contributions PIS and COFINS on this monetary restatement.
This discussion, used as an example, may generate savings that, depending on the tax regime adopted by the company, can reach up to 9.25% of taxation on this monetary restatement.
Our tax team is available to provide further information and guidance on these and other topics.
Coauthors: Phillipe da Cruz Silva and Augusto Périco
