Breach of tax decision is valid without the need for rescission action, decides STF

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Final decisions (final and unappealable) on tax matters lose effect from the moment there is a different judgment by the STF (Supreme Federal Court), decided this Wednesday (8) the ministers of the court.

The court established that a new judgment by the STF on the subject immediately breaks the previous decision. That is, a taxpayer who has obtained a favorable decision in the past, but who subsequently has the situation changed by the Supreme Court, can be sued by the Federal Revenue without the need for a rescission action — respecting the principles of anteriority and ninety.

The principle of precedence establishes that increases in certain taxes can only be applied in the fiscal year following the alteration, while the ninety-day principle establishes a period of 90 days. The legal provision exists so as not to surprise taxpayers and give them time to adapt to the new regulation.

After three sessions, the ministers concluded the judgment of two actions of general repercussion —which focus on similar processes— regarding this type of situation, which represent a “break” of previous decisions.

There were, however, disagreements among the ministers. Edson Fachin proposed that this Wednesday’s decision only have future effects, from the publication of the judgment minutes.

However, he was defeated by the majority. The understanding of Justice Luís Roberto Barroso prevailed, for whom the validity of the breach of decisions already starts from the judgments in the opposite direction of the STF.

When voting, the president of the Supreme Court, Rosa Weber, said that Fachin’s proposal “would bring greater legal uncertainty”, especially to those who duly paid the tribute “after the decision of the STF in the opposite direction to res judicata”. She followed Barroso’s understanding.

With this judgment, the Supreme Court defined the so-called “limit of res judicata in tax matters”.

Cases will be impacted by the judgments in which, after these final and unappealable decisions, the Supreme Court itself understood that the taxes were constitutional and should be collected.

The trials had already started in a virtual plenary, a system where ministers cast their votes, but were taken to the physical plenary by Minister Edson Fachin. The trial began on the 1st of the month and ended on Wednesday.

On the one hand, taxpayers argued that the effects of the decisions they had obtained in court —for non-payment of amounts— continued even after the Supreme Court declared the collection of taxes constitutional.

On the other hand, there was the understanding that these decisions are no longer valid after the understandings of the STF.

For example, one of the appeals that reached the STF was filed by the Union against a textile industry that obtained a court order, final and unappealable in 1992, to stop paying CSLL (Social Contribution on Net Income).

The decision that exempted the industry from this collection was taken by the TRF-5 (Federal Regional Court of the 5th Region).

However, in 2007, the Supreme Court decided that this tax was constitutional when judging an ADI (direct action of unconstitutionality).

In the appeal against the industry, the Union argued that the res judicata in tax matters “may be relativized due to the supervenience of new normative parameters for the requirement of the tax” or, even, “due to the supervenience of the decision of the STF that it considers constitutional the normative diploma considered unconstitutional by the final and unappealable decision”.

This was the first of the major cases in the tax area that are pending decision in the STF and that should be analyzed this year. There is no estimate of the impact of these decisions on public finances or on taxpayers.


What did the Supreme Court decide?

The ministers of the STF decided that, in tax cases, court decisions automatically interrupt the effects of previous judgments (even in cases where there was no longer any possibility of appeal), without the need for a rescission action by the Revenue in Justice.

What are the conditions?

For example, the principles of anteriority and ninety must be respected. The first establishes that increases in certain taxes can only be applied in the fiscal year following the alteration, while the ninety one establishes a period of 90 days. The legal provision exists so as not to surprise taxpayers and give them time to adapt to the new regulations.

Which cases are affected?

The STF directly addressed two cases, but the thesis presented by the ministers is valid for judging all similar cases.

In both actions, the Union intended to collect the Social Contribution on Net Profits (CSLL) from companies that, in the 1990s, had won in court, with final and unappealable decision (with no possibility of appeal), the right not to pay the tribute. Then, in 2007, the STF validated the CSLL collection — but there was still discussion about the resumption of the tax collection, which, as decided now, can be restarted even without rescission action from the moment the STF decides to charge it.

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