Recently, two opinions involving constitutional matters have been issued by the Federal Supreme Court (STF), which may come to have stare decisis effects as to whether it is possible to collect tax on urban property (IPTU) on government property whose use has been assigned to private legal persons (RE 601.720/RJ); and leased to government-controlled companies (RE 594.015/SP). In both occasions, the Federal Supreme Court (STF) understood that, because it involves exploitation of economic activity, both the assignment of government property to private parties and lease to government-controlled company (in this case, Petrobrás) would involve the possibility of taxation by municipal authorities.
The understanding alters the previous case law trend, whereby the assignment and leasing of government property to private parties generate precarious possession and, even when used for commercial purposes, IPTU would not be levied. In the previous decisions (precedents), the reciprocal tax immunity rule has been applied, according to the Federal Constitution (art. 150, item VI, "a").
The discussion has not yet ended and it depends on a definition issued in a motion for clarification (procedural measure to clarify any missing, obscure or contradictory sections of said decisions). One of the relevant aspects to be defined, according to several votes already given in both judgments subject to motions for clarification, concerns the period/date from which the decision will go into effect – i.e., the modulation of effects of the decision and the corresponding fiscal and contractual effects.
Whatever the final understanding is, it seems to us that the decision may unfold several discussions regarding economic-financial balance of contracts that have already been entered with the government in relation to government property subjected to different legal regimes, as well as regarding whether it is possible that is extends to other concrete cases whose theme may be influenced by these recent rulings.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.