SUPREME COURT DECIDES FOR THE CONSTITUTIONALITY OF ACCIDENT PREVENTION FACTOR (FAP)
The Supreme Court (STF) decided that the regulation, by decree, of the Accident Prevention Factor (FAP) is compatible with the constitutional principle of tax legality. The issue was discussed in two lawsuits: Extraordinary Appeal No. 677725, topic 554 of general repercussion; and Direct Unconstitutionality Case No. 4397.
The FAP is the factor that may increase or reduce the rate of the social contribution for the Work Accident Insurance (SAT), which is intended to fund the special retirement allowance due to unsuitable working conditions and allowance for labor-related accidents. The SAT rates are 1%, 2% and 3%, and the FAP may reduce it by up to 50% or increase it by up to 100%, depending on the company’s performance in relation to the average degree of risk of its economic activity.
In his vote, Justice Luiz Fux highlighted that the legislative delegation for the Executive branch to set the criteria for the reduction or increase of rates refers only to the definition of technical criteria, and not to the essential elements to its collection, as the definition of the taxable event, calculation basis and rates.
Thus, he concluded that the definition of concepts such as “preponderant activity” and “degree of risk” by the Decree does not imply an offense to the constitutional principle of legality.
STJ DECIDES THAT A PARTNER/MANAGER WHO WITHDREW FROM THE COMPANY BEFORE ITS IRREGULAR CLOSURE CANNOT BE LIABLE FOR TAX DEBTS
The Superior Court of Justice (STJ) decided that the partner/manager of the company at the time of the triggering event of the unpaid tax should not be liable for tax debts when such liability is based on irregular dissolution of the company if the partner/manager withdrew regularly from the entity prior to such dissolution. The understanding was established in the judgment of Topic 962 of repetitive appeals of the Court, and has binding effects.
The Reporting Justice Assusete Magalhães highlighted that such understanding presupposes that the liability of the partner/administrator is not based on violation of the law, contract or bylaws, but only based on the irregular dissolution of the company.
Still, the Court has not yet concluded the judgment of three appeals listed in Theme 981, which also deal with the liability of partners in cases of irregular closure of companies. On this subject, the STJ discusses two specific hypotheses: (i) whether the partner who was a manager both at the time of the taxable event and at the irregular dissolution must be liable for the tax debts; and (ii) whether the partner at the time of the irregular closure of the company must be liable for the tax debts, even if he did not manage the company at the date of the taxable event.
In this judgment, Justice Assusete Magalhães voted that the partner with managing powers at the time of the irregular closure of a company must be liable for the tax debts, even if he did not exercise management at the time of the taxable event. Judge Og Fernandes followed. The judgment was suspended by request of Justice Regina Helena Costa.
STJ DECIDES THAT INPUTS APPLIED IN NON-TAXED PRODUCTS SHOULD GENERATE IPI CREDITS
The Superior Court of Justice (STJ) decided that the taxpayer is entitled to Tax on Industrialized Products (IPI) credits on the purchase of taxed inputs that are subsequently applied in the industrialization of non-taxed products.
The court already had an understanding that the law allows the crediting of IPI when the referred inputs are applied in the manufacturing of products that are exempt or taxed at a zero rate. The discussion, however, remained in relation to the extension of such understanding in the industrialization of “non-taxed” products.
The winning thesis was proposed by Justice Regina Helena Costa, who diverged from reporting Justice Assusete Magalhães. In her vote, Regina Helena highlighted that the article 11 of Law 9.779/99 does not exclude the possibility of granting the tax benefit in the case of non-taxed products, but rather has an open redaction that leads to the understanding that the credit should apply in any situation of non-taxation of the manufactured products.
OFFSET AS A DEFENSE MATTER IN MOTION TO STAY TAX FORECLOSURES
The 1st Section of the Superior Court of Justice (STJ) decided that the taxpayers cannot use tax offsets dismissed at the administrative level as an argument of defense in motions to stay tax foreclosures.
Tax offsetting allows companies that have tax credits to use them to settle other tax debts (especially at the federal level). In this sense, if the tax authorities analyze an offset request and reject it, the offset debt is subsequently charged through a tax foreclosure.
The taxpayer can file Motions to Stay Tax Foreclosures, but, under the terms of the STJ decision, if the offset was not administratively recognized by the Federal Revenue, it cannot be brought as a matter of defense in the lawsuit. Thus, the taxpayer could only discuss the matter if the offset was granted by the tax authority, but for some reason the debts was being improperly charged in tax foreclosure.
In practical terms, the decision implies a restriction of the taxpayers’ rights of legal defenses, who will be obliged to file their own lawsuit to discuss possible rejection of the offsets. It is recommended that taxpayers analyze whether they currently have Motions to Stay Tax Foreclosures based on this argument and consider alternatives for the defense.
SENATE APPROVES CONSTITUTIONAL AMMENDMENT PROJECT (PEC) RESTRICTING APPEALS ADMISSIBILITY FOR THE SUPERIOR COURT OF JUSTICE
On November 03, the Brazilian Senate approved the PEC 10/17, which establishes additional requirements for the admissibility of special appeals by the Superior Court of Justice (STJ).
According to the bill, for the STJ to examine a special appeal, the parties will need to demonstrate the relevance of the issues discussed in the case. The proposal brings some hypotheses in which the relevance is presumed.
Criminal cases and administrative misconduct lawsuits, for example, will automatically be considered relevant to be judged by the STJ. When the appealed decision contradicts prevailing jurisprudence in the STJ, the case will also be considered relevant.
As it underwent changes in the Senate, the text will return to the House of Representatives for new vote. If approved, it should be regulated by ordinary law, which should effectively establish all the criteria of relevance for the purposes of admissibility of the appeals.
Despite being a measure to rationalize the use of the special appeals, it is necessary to evaluate whether such new criterion does not restrict the effective access to the Judiciary and the citizens’ right to defense.