On June 9th, in a thematic session, the Superior Chamber of the São Paulo Tax and Fees Court (TIT-SP), reviewing the Precedent n. 10/2017, decided that the application of default interest on state taxes should be limited to the reference rate of the Special System for Settlement and Custody (Selic).
Taxpayers already argued the illegality of the interest rate higher than the Selic rate. However, due to the mandatory force of Precedent n. 10/2017, TIT-SP did not accept the taxpayers’ argument since the precedent allowed the State of São Paulo to apply the required tax debts rate index higher than Selic.
Despite the change has now taken at the administrative level, the Federal Supreme Court (STF) and the São Paulo State Court of Justice (TJSP) had already established the understanding in the judicial level that the Tax Authorities couldn’t establish charges on his tax credits higher than the Selic rate.
The change in Precedent n. 10/2017 will be reviewed by the São Paulo State Treasury Department’s Tax Administration Coordination Office. After approval, it will have a mandatory character in the administrative proceedings.
The alignment in the courts positioning, at administrative and judicial levels, it’s a great advance because it leads to a uniform understanding and a reduction of tax litigation on this issue.
Our tax team is available to provide more information and guidance on these and other topics.
Coauthors: Thais Ribeiro Bernardes Casado and Guilherme Rodrigues de Matos Nascimento
