Income tax should not be levied on alimony, decides STF

Income Tax should not be levied on amounts received as alimony, according to a decision by the Federal Supreme Court (STF) on Friday night (3).

The understanding of the rapporteur, Minister Dias Toffoli, prevailed, who defended that the alimony is not a new income or equity increase, since income previously taxed for its receipt is used.

“(…) Ensuring the minimum conditions of existence of financial dependents with taxed income when they entered the patrimony of the alimony is income insusceptible to one more taxation, true double taxation”, said the rapporteur.

The judgment’s score was 8 votes to 3. Minister Gilmar Mendes had a dissenting vote, justifying that the decision would generate a distortion in the system, violating the principle of ability to pay. “In the current format, there is a single incidence (and not double), only for those who receive the pension”, he said in the vote, adding that there is reasonable doubt about the constitutionality of the single incidence in the current format.

The Attorney General’s Office (AGU) declares that the decision will lead to a reduction of approximately R$ 1.05 billion in annual revenue. “The impact is likely to reach 6.5 billion, considering the current year and the previous five,” Mendes said in his vote.

The decision was based on the judgment of ADI 5244, a direct action of unconstitutionality proposed by the Brazilian Institute of Family Law (IBDFAM) in 2015 regarding articles of Law 7,713/1988 and the Income Tax Regulation (RIR).

What changes with the decision of the STF?

Richard Domingos, executive director of Confirp Consultoria Contábil, explains that before the trial, alimony was taxed monthly by Carnê Leão, which changes with the decision of the STF.

“Now, those who receive alimony will no longer need to pay the Carnê Leão monthly, and this income will no longer be considered taxable income on their income tax return.”

Domingos says that it is necessary to wait for the modulations of the judgment, including to verify if there will be a recovery of the tax paid in the last five years through a rectifying declaration, excluding alimony from taxable income.