CETESB’s regulation which requires the implementation of reverse logistics as a condition for the renewal of environmental licenses enters into force next June.
On 03/06/2018, it will enter into force, the Board Decision no. 076/2013/C, of the Environmental Agency of the State of São Paulo – CETESB, published on 04/04/2018. Such Decision establishes the procedures for incorporating Reverse Logistics within the scope of environmental licensing.
In view of the Decision, the reverse logistics implementation is gradually required as a condition for issuing or renewing the operating licenses of the enterprises subject to environmental license process.
The Decision applies, in the first stage, to manufacturers or those responsible for importing, distributing or marketing the following products: (i) pesticides, for the reverse logistics of their empty packages; (ii) automotive batteries; (iii) packages in general (beverages; food, cleaning and hygiene products; cosmetics; and empty packages of outdoor paints); (iv) automotive lubricating oil filter; (v) fluorescent, sodium and mercury vapor and mixed light lamps; (vi) overdue medicines of domestic use; (vii) cooking oil; (viii) used and contaminated lubricating oil and also its plastic packages; (x) portable batteries; (xi) tires; (xii) domestic electronic products and their components with a voltage up to 240 V.
For the purposes of the Board Decision, “manufacturers” are the owners of the brands of the respective products, as well as those who, on behalf of the trademark holders, carry out the packaging, assembly or manufacture of those products.
Deadline for states and municipalities to regulate writ of payments expires
In 2013, the Brazilian Superior Court (STF) decided on the ADIs 4357 and 4425 and declared unconstitutional devices of article 100 of Federal Constitution, which establishes rules on the payment of Writs of Payment(“Precatórios”), and article 97 of the Transitory Constitutional Disposition Act (ADCT), which predicted a special regime of payment. On the effort to regulate the STF’s understanding, Constitutional Amendments n. 94/16 and 99/17 were enacted.
As a result of those amendments, article 105 of ADCT allowed the use of Writs of Payment to offset State and Municipal collectible tax debts registered until 03/25/2015. A 120-day deadline was established (starting on January 1st, 2018) for States and Municipalities to regulate the matter. According to article 105, §3º, once this deadline expires, if there’s no State of Municipal law regulating such payments, Writs of Payment creditors may proceed with the offset.
The deadline expired in the beginning of May, and a lot of States and Municipalities still have no law on the matter. In the State of São Paulo, Bill of Law n. 807/17 has been fast-tracked, but has not been updated since October 2017. Currently, since there is Constitutional authorization, but no regulation, taxpayers who wish to offset Writs of Payment with collectible tax debts in the State of São Paulo can do so judicially.
 “Precatórios” are negotiable debt instruments issued by judicial courts in Brazil that represent monetary non-appealable judgments against Brazilian governmental entities. Historically, Brazil has used precatórios as a means to ease payments on federal, state and municipal longstanding debt, functioning as de factosecurities exchangeable in the market and with fixed payment schedules.
CARF changes internal regulation
Published on the last days of April, Ordinance n. 153/18 has changed the Internal Regulation of the Administrative Tax Appeals Council (“CARF”). Most of the changes are related to the management of the Council and are still pending internal regulation.
CARF can now rule proceedings in batches, gathered by matter in one leading case that best represents the legal controversy. This measure, if well managed, can result in more uniform and faster rulings. If improperly managed, however, it may negatively affect cases with particular elements or different characteristics from the leading case.
The Ordinance also determines that CARF should inform in advance if a proceeding is removed from the Agenda but does not establish a term to do so. As to eventual disqualifications or recusals, it specifies they should be informed by the Judge at least five days before the ruling.
Regarding Judges that had acted as lawyers in Law Firms, the Ordinance reduced the mandatory disqualification or recusal period to rule on proceedings involving former clients from five to two years.
Federal Court in Rio Grande do Sul authorizes the exclusion of PIS/Cofins from its own calculation basis
On May 3rd, 2018, the Federal Court of Rio Grande do Sul issued a ruling that allowed the exclusion of PIS and COFINS (turnover taxes) from their own calculation basis. The decision was based on RE 574.706 / PR, whereby the Supreme Federal Court (STF) decided to exclude the ICMS (state-level VAT) from the calculation basis of PIS and COFINS.
According to the vote, if the ICMS is not a part of the PIS and COFINS calculation basis (since it is not a part of the company’s gross revenues or its total income), for the same reason, PIS and COFINS should not be a part of their own calculation basis.
The decision declared that the inclusion of these taxes within their own calculation basis would be unconstitutional and illegal, since it would be a violation of art. 195, I, “b”, of the Federal Constitutional, and therefore art. 12, § 1, III and 5 of Decree No. 1598/77, which states that the concept of gross revenue includes taxes levied on it, was also declared unconstitutional. As a result, it was determined that the amounts of PIS and COFINS collected within its own calculation basis in the last five years should be reimbursed, as well as the unenforceability of their collection by Federal Tax Authorities henceforward.
Considering that applying this ruling in practice to other claims is plausible and that the prescriptive period for the recovery of values is currently underway, it is worth evaluating the possibility of filing a lawsuit to prevent eventual loss of rights to recover these amounts.
Brazil signs agreements to avoid double taxation with Singapore and Switzerland
In the first ten days of May, Brazil signed Double Taxation Convetions with Singapore and Switzerland. The new treaties were heavily influenced by the 2017 version of the OECD Model Convention, with an important tax-avoidance component, and in line with the BEPS project recommendations. In addition, the new Brazilian treaties contain a new specific article for income originated from the provision of technical services, which will be taxable in the State of residence with the possibility, also, that the source State may tax that income at a rate of up to 10%.
According to the Federal Revenue Service, the agreement with Switzerland is among the main demands from the Brazilian private sector, since Switzerland occupies the sixth position among the countries that most invest in Brazil, with amounts around US $ 22 billion. Singapore also has significant participation in the Brazilian economy, particularly in the oil and gas, infrastructure, real estate, agriculture and transportation sectors.
These treaties still need to be ratified and enacted to produce effects in Brazil, a process that may take a few more years. We will follow the progress of the legislative process of these treaties and return to the subject in due course.
New precedent of the Superior Court of Justice and the theory of the consolidated fact situations in environmental matters
The Superior Court of Justice (“STJ”) has approved the Precedent No. 613, with the following wording: ” The theory of consolidated fact situations it not applicable to matters related to Environmental Law”.
Analyzing this matter, certain insecurity and legal instability may be expected, since the Precedent seems to conflict with legal norms that recognized the consolidation of generic concrete cases on “consolidated fact situations”.
As an example, the Supreme Court has decided by the constitutionality of certain provisions of the Forest Code that translates the applicability of the “theory of consolidated fact situations”, since the Forest Code authorizes the continuation of certain activities and other situations in environmental law – that in theory may cause damage to the environment.
In this scenario, the Precedent could have excepted the legal hypotheses that authorized some “consolidated fact situations”, like others that allow signing commitments to eliminate irregularities, as provided by the recent inclusion of the Article 26 in the Law of Introduction to the norms of Brazilian Law, included by Federal Law No. 13,655/2018.
Although not provided with binding effect, the Precedent can be invoked by the Environmental Control and Protection Entities to question past events, which is why its contents cannot be ignored, mainly because of the prestige of precedents and the approach to Common Law brought by new Code of Civil Procedure, in particular by its Article 489, item VI.