Brazil: Citizen Suits Filed Against CARF’S Decisions

The press has recently reported1 that decisions favorable to taxpayers, rendered in tax administrative proceedings by the Administrative Council of Tax Appeals (CARF), have been challenged before the Judiciary through Citizen Suits filed based on Law no. 4,717/65.

These actions claim, in general, that the cancellation of tax assessments by the CARF were illegal and mistaken, which seriously damaged the public coffers and property, as well as offended the administrative ethics, for which reason they seek that the taxpayers be ordered to reimburse the Federal Government.

We believe that the grounds of these actions are not very consistent, since they are based on the thesis that the interpretation made by the Plaintiff of the Citizen Suits as to the tax rules on which the assessments canceled by the CARF are based must prevail over the one that was legitimately rendered by the representatives of the Federal Tax Administration, in the performance of the duty and power granted on them.

The doctrine considers unacceptable the maneuver of a Citizen Suit that "objects to the validity of an act practiced by a proper agent, in accordance with the law and the regulations approved by the legitimate Constitutional Powers, only based on the vague concept of immorality", because "if the administration acts under the law, without deviation of purpose, it is not possible to accept the intervention of the Judiciary through a citizen suit"2.

Despite the above, generally speaking, we believe that such actions can mean a serious legal uncertainty in the relationship between the tax authorities and taxpayers, in case the Judiciary agrees to prosecute these claims3, as well as a clear risk of financial losses to companies in the event the action is held to be valid. The situation is even more worrying due to the fact that companies may be obliged to maintain provisions, for years, of sums that the Federal Government (creditor) itself has already recognized are not due.

The Superior Court of Justice (STJ) has already ruled, in a similar case, that the decisions of the former Taxpayers' Council are definitive, once the administrative proceeding has been completed4. Furthermore, the same Court was clear when affirming that disrespecting CARF's definitive decisions takes away the credibility and usefulness of the council, therefore these attitudes are to be rejected5.

Moreover, we consider that such citizen suits, in progress in the Judiciary, do not represent the interest of the collectivity, but private interests, albeit named as 'homogenous' individual interests, which have also been repealed by the STJ6. This is because there is no effective demonstration that serious damage was caused to the public coffers and property.

After all, there doesn't seem to be any seriousness or even damage in the cancellation of tax assessments through the procedure provided for in the legal rules of the Brazilian Legal System, which govern tax administrative proceedings of the Federal Government.

As known, the Administration is entitled to self-protection, verifying the validity, legality, and legitimacy of its own acts. Hence the validity of CARF's activity, which decides on the correction of the tax administrative proceedings that led to the notices requiring the payment of taxes, interests, and fines. Therefore, it seems to us that the possibility of the tax administration performing such a self-protection activity, within the limits of legality, is more interesting for the collectivity, ensuring the taxpayers' legal and tax certainty, than removing this right, wiping out the operation of a entity with almost 88 years of activity, mainly because such Citizen Suits do not indicate any fraud or crime.

In this line of thought, the first favorable decision to the taxpayers was rendered (in one of the 59 actions filed recently), in which the Judge dismissed the proceeding without judgment on the merits, as the plaintiff lacked standing to sue, in cases in which there is no definitive decision yet from the mentioned administrative body (in the decided case, appeals in the administrative proceeding are still pending decision).

The judge stated that: "the citizen suit did not mention any act that is harmful to the public property claimed to be practiced by the councilors (...), and was limited to stating that they had judged the matter incorrectly. It was the lawmaker's choice to create tax administrative proceedings, so that the Administrative itself would carry out an internal control of the legality of the tax assessments, creating for such a number of judgment bodies (...). And in the system created, provided there is a tax administrative decision, the tax credit is then ended, since the Administration itself will have concluded the original assessment lacked grounds"7.

Lastly, we inform you that our Firm has already been working with such proceedings, for which reason we are available to assist you in this matter and in any further questions you may have.


1 Valor Econômico of Feb. 8, 2013, and Consultor Jurídico's (CONJUR) homepage of Feb. 6, 2013, de ( , consulted on Fe. 8, 2013)

2 Hely Lopes Meirelles, citing Castro Aguiar. In Mandado de Segurança, Ação Popular, Ação Civil Pública, Mandado de Injunção, Habeas Data. Malheiros, 21ª Edição, Atualizada por Arnoldo Wald, SP, pp. 120/121.

3 We know of a similar action in progress with the TRF of the 3rd Region, in which the judge ruled out all the preliminary arguments presented by the Defendants, which claimed the citizen suit had no grounds to challenge the cancellation of tax assessments by the Council, but agreed with the merits of the administrative decision, ruling against the pleading of the citizen suit (Proceeding n. 0004796-31.2003.4.03.6104).


1. Pursuant to the principle of legal certainty, the administered party cannot be at the mercy of a posterior review of a definitive decision in an administrative proceeding that was rendered regularly.

2. Special appeal dismissed. (REsp 572358/CE, Reporting Justice JOÃO OTÁVIO DE NORONHA, SECOND PANEL, judged on 10/10/2006, DJ 12/106/2006, p. 239)

5 Writ of Mandamus n. 8.810/DF, Reporting Justice HUMBERTO GOMES DE BARROS, FIRST SECTION, judged on 08/13/2003, DJ 10/06/2003, p. 197.

6 "This is because the purpose of the citizen suit is not the defense of private interests or even individual property interests, albeit homogeneous". (REsp 776.857/RJ, Reporting Justice LUIZ FUX, FIRST PANEL, judged on 12/16/2008, DJe 02/18/2009)

7 Proceeding n. 60.948-05.2012.4.01.3400

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.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.