In this Tax Law Newsletter, you will find:
- STF will analyze general repercussion in relation to ICMS (state vat) due on transfers of goods
- STF analyzes existence of general repercussion in discussion of AFRMM increase
- STF forms majority against levy of ITCMD (inheritance tax) on private pension plans
- STJ defines term to peresent objection against tax foreclosures
- STJ suspends judgment regarding attorney’s fees in favor of the state treasury
- STF to review the constitutionality of special contribution when effective personal protective equipment is provided – the issue of noise
- Attorney general’s office regulates the use of insurance for guarantee of tax debts
1. STF will analyze general repercussion in relation to ICMS (state vat) due on transfers of goods
The Federal Supreme Court (STF) began analyzing Theme 1367 of General Repercussion in the virtual plenary session, which debates the scope of the modulation of effects in the decision that ruled out the levy of ICMS on the transfer of goods between establishments (branches) of the same taxpayer.
The controversy arose from the position adopted by the STF in Theme 1099 of the General Repercussion and Direct Constitutionality Action (ADC) 49; cases in which the Court recognized the unconstitutionality of the ICMS levied on transfers of goods between establishments of the same owner, since they do not constitute a transfer of ownership or an act of trade.
In ADC 49, the STF modulated the effects of the decision, determining that ICMS would only cease to be levied on transfers as of January 1, 2024, except for taxpayers who filed administrative or judicial proceedings by April 29, 2021.
Taxpayers questioned the modulation of effects, especially because the understanding that the tax is not due had already been affirmed by both Superior Courts.
So far, 6 Justices have recognized the general repercussion and reiterated that although the jurisprudence recognizes the non-incidence of ICMS, the tax was due until 12/2023, except for those taxpayers who filed administrative or judicial claims before 29/04/2021.
The Justices can still change their votes, and the judgment is expected to end on February 3, 2025.
2. STF analyzes existence of general repercussion in discussion of AFRMM increase
The Federal Supreme Court (STF) began analyzing Theme 1368 of General Repercussion, which debates whether the tax anteriority rule applies to the full rates of the Additional Tax for Renewal of the Merchant Marine (AFRMM).
The controversy arose due to the revocation of Decree No. 11.321/2022, which established a 50% discount for the AFRMM rates and was published on 01/01/2023. The following day (02/01/2023) this discount was revoked by Decree No. 11.374/2023, which re-established the rates for the AFRMM.
The taxpayers claim that the second decree, which revoked the discount, should have complied with the constitutional principle of anteriority, which stipulates that tax increases can only be levied one year after the publication of the law.
So far, 6 of the 11 Justices have recognized the general repercussion of the discussion and voted against the taxpayers’ claim, i.e. that there was no need to wait one year for the tax to be increased.
Reporting Justice Luis Barroso’s vote, which has been followed by the others so far, is that the decree that granted the discount did not actually come into force, so the second rule has not effectively increased the tax.
The Justices can still change their votes, and the judgment is expected to end on February 3, 2025.
3. STF forms majority against levy of ITCMD (inheritance tax) on private pension plans
On December 16, 2024, the Federal Supreme Court (STF) formed a majority of votes to declare the unconstitutionality of the levy of ITCMD on VGBL and PGBL private pension plans in the event of the holder’s death. The judgment has binding effects on all Courts and Judges.
Reporting Justice Dias Toffoli followed the opinion of the Attorney General’s Office, arguing that VGBL and PGBL are life insurance, not inheritance, highlighting a precedent of the Superior Court of Justice (STJ), which ruled out the taxation of VGBL based on article 794 of the Civil Code, according to which the capital stipulated in life insurance neither forms part of the inheritance, nor is subject to the insured’s debts.
In the Reporting Justice’s opinion, the transfer of VGBL and PGBL amounts to beneficiaries is equivalent to personal insurance.
4. STJ defines term to peresent objection against tax foreclosures
The First Panel of the Superior Court of Justice (STJ) unanimously ruled that the deadline for filing objections to tax enforcements begins only after the formal acceptance of the surety bond by the Judiciary. The decision was rendered in the judgment of Special Appeal No. 2.185.262/RJ.
The controversy revolved around when the deadline to file objections should start: from the submission of the surety bond or from the formal acceptance by the court through the formalization of the lien order. The appealed decision deemed the objections filed by the company untimely, as they were submitted six months after the surety bond was added to the case file.
Minister Paulo Sérgio Domingues highlighted that it is the responsibility of the court handling the tax enforcement proceedings to manage the process and decide on the acceptance of the surety bond, which marks the starting point for the objection period.
He also emphasized that, although the Public Treasury may regulate the conditions for accepting surety bonds, the final decision regarding the guarantee of enforcement lies with the Judiciary.
5. STJ suspends judgment regarding attorney’s fees in favor of the state treasury
Minister Benedito Gonçalves proposed a collective review in the judgment of Special Appeal No. 2.032.814/RS, in which the Superior Court of Justice (STJ) is analyzing whether a taxpayer must pay attorney’s fees to the National Treasury upon withdrawing a lawsuit due to adherence to a tax settlement agreement.
Currently, the judgment is tied at 1-1 following the presentation of divergent positions by the reporting justice, Gurgel de Faria, and Justice Paulo Sérgio Domingues.
Minister Gurgel de Faria, in his August vote, held that the Treasury is entitled to attorney’s fees based on Article 90 of the Code of Civil Procedure (CPC), which stipulates that in the event of a lawsuit withdrawal, the withdrawing party must bear the costs and attorney’s fees. He argued that, in the absence of a legal provision excluding attorney’s fees in tax settlements, the CPC rules apply.
Minister Paulo Sérgio Domingues, on the other hand, argued that adherence to a tax settlement agreement implies that the amounts paid or parceled represent the total amount owed, and charging attorney’s fees not provided for in the agreement would contradict the principles of good faith and the prohibition of unexpected surprises. He further noted that, from the taxpayer’s perspective, whether the attorney’s fees are directed to the Treasury or to its legal representatives does not alter the financial impact to the taxpayer, thereby reinforcing his position against the imposition of such fees.
6. STF to review the constitutionality of special contribution when effective personal protective equipment is provided – the issue of noise
The National Confederation of Industry (CNI) has filed Direct Action of Unconstitutionality (ADI) No. 7773, challenging the constitutionality of requiring a special contribution even when effective Personal Protective Equipment (PPE) is provided to workers.
The entity seeks clarification on whether the use of PPE capable of neutralizing or reducing exposure to harmful agents could eliminate the obligation to pay the special contribution, considering the precedent established in General Repercussion Theme No. 555 by the Federal Supreme Court (STF).
In that judgment, the STF defined the following thesis: I – The right to special retirement benefits presupposes the worker’s actual exposure to harmful agents. If the PPE effectively neutralizes the harmful effects, there is no constitutional basis for special retirement. II – In cases of worker exposure to noise levels above the legal tolerance limits, the employer’s statement in the Professional Profile Report (PPP) regarding the effectiveness of PPE does not negate the classification of the time worked as special for retirement purposes.
The Confederation argues that Theme No. 555 has been broadly applied to presume PPE inefficacy, particularly in cases of noise exposure, without considering technological advances in protective equipment. According to the Confederation, the right to special retirement benefits depends on actual exposure to harmful agents. If PPE is capable of neutralizing such exposure, there would be no constitutional basis for the contribution.
The entity further highlights that the special contribution requirement discourages good occupational health and safety practices. It calls for the effectiveness of PPE to be evaluated on a case-by-case basis, considering the specificities of each work environment. The CNI also requests the suspension of administrative and judicial proceedings concerning the special contribution until the STF rules on the case.
The ADI has been assigned to Justice Alexandre de Moraes, but no date has been set for a plenary hearing yet.
7. Attorney general’s office regulates the use of insurance for guarantee of tax debts
On December 31, the Attorney General’s Office issued Ordinance No. 2.044/24, regulating the use of insurance for guaranteeing tax debts. The ordinance ensures immediate acceptance of the insurance policy, provided it meets the specified requirements. This ensures that taxpayers can promptly secure their tax obligations through insurance policies without prolonged court evaluations.
The regulation also permits partial guarantee insurance, covering only a portion of the outstanding tax debt. In such cases, enforcement actions will continue for the remaining, unsecured, portion of the debt. However, this partial coverage neither fully suspends the debt, nor enables the issuance of a tax clearance certificate.
Another noteworthy innovation introduced by the ordinance is the possibility of submitting guarantee insurance directly through the “Regularize” portal. This submission mechanism extends to debts that have not yet been enforced or registered as active debts. After the acceptance of the guarantee in the context of tax enforcement proceedings, the taxpayer may request its registration in the Attorney General’s Office of the National Treasury systems via “Regularize,” if it has not already been registered following judicial notification.
The ordinance also prohibits the common practice of adding a 30% surplus to the guarantee insurance policy to account for potential increases in the tax debt. This practice had previously been adopted in some court cases to cover any potential credit adjustments or interest accrual but is now explicitly disallowed.
