On September 24, the Supreme Court (STF) concluded the judgment of the Extraordinary Appeal no. 1,063,187, with binding effects (theme no. 962 of general repercussion), establishing the thesis that the levy of IRPJ and CSLL on amounts related to the Selic rate applicable on refund of overpaid taxes is unconstitutional.
Most of the Justices followed the understanding of the reporting Justice Dias Toffoli, who stressed that the interest on late payments is not under the scope of IRPJ and CSLL, as such rate aims, mainly, to recover an effective loss, not representing an increase of the creditor’s patrimony.
This decision represents an important victory for taxpayers, who defended the illegitimacy of this taxation, while most of the other Courts in the country were unfavorable to the thesis.
It is important to note, however, that although the STF has not modulated the effects of such decision (that is, limited its effects in time), that modulation can still be pleaded by the National Treasury. It is also important to follow up on any motions and internal guidelines of the Brazilian Federal Revenue on how such decision will be applied in the inspection and assessment procedures.
While there is no institutional ruling of the Federal Revenue, and whilst there is a risk of a possible request for modulation of effects by the National Treasury, taxpayers may still be subject to such taxation, reason why it is important to evaluate the convenience of filing a lawsuit to reduce such risk or to recover any IRPJ and CSLL paid in connection with interest on the refund of any taxes.