On April 8, 2022, the Brazilian Supreme Court (STF) concluded the trial of the Direct Action of Unconstitutionality nº 2466 and declared, by a majority, the constitutionality of art. 1 of Complementary Law nº 104/2001 adding the sole paragraph to art. 116 of the National Tax Code.

This rule authorizes tax authorities to disregard legal acts or transactions performed with the purpose of disguising the occurrence of the taxable event or the nature of the constitutive elements of the tax obligation, instead observing the procedures to be established in ordinary law.

According to the vote of the Rapporteur Minister Cármen Lúcia, such disregard, authorized by the law, is limited to acts or legal transactions carried out to dissimulate or conceal the tax triggering event.

The publication of the court's decision is pending.

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