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Among the tax law news from the past month are STF decisions on retroactive ICMS, habitual tax debtors, and STJ rulings on ICMS DIFAL
In this Tax Law newsletter, you will read about:
- STF rules out retroactive ICMS collection on internal transfers
- STF validates special regime against habitual ICMS debtors in Rio Grande do Sul
- STF upholds the understanding on res judicata in tax matters in Themes 881 and 885
- STF determines that the Selic rate applies to all disputes involving the Federal Treasury
- STF maintains the unconstitutionality of ISS on contract manufacturing
- STJ rules out the statute of limitations for writs of mandamus regarding periodic taxes
- STJ affects repetitive appeal on inclusion of ICMS DIFAL in the PIS/COFINS tax base
1. STF rules out retroactive collection of ICMS on transfer between establishments of the same company
The Supreme Federal Court (STF) ruled that the modulation established in Declaratory Action of Constitutionality (ADC) No. 49 does not authorize states to retroactively collect ICMS on transfers of goods between establishments of the same company prior to 2024. The decision was rendered in Extraordinary Appeal (RE) No. 1,490,708 (Theme 1367), with Minister Dias Toffoli's opinion prevailing, rejecting the claims of states such as São Paulo.
2. Supreme Court Upholds Special Regime for Habitual ICMS Debtors in Rio Grande do Sul
The Brazilian Supreme Federal Court (STF) formed a majority to uphold the constitutionality of the provisions of Law No. 13,711/2011 and Decree No. 48,494/2011 of the State of Rio Grande do Sul, which establish a Special Audit Regime for taxpayers classified as habitual ICMS defaulters.
The rules require the public disclosure of these taxpayers' names on the State Treasury Department's website, the indication of their default status on issued invoices, and the presentation of proof of tax payment as a condition for utilizing fiscal credits. Click here to read more.
3. STF Upholds Precedent on Res Judicata in Tax Matters (Themes 881 and 885)
The Supreme Federal Court (STF) formed a majority to reject new motions for clarification filed by taxpayers and by the National Treasury in Themes 881 (RE 949,297) and 885 (RE 955,227), which address the effects of res judicata in tax matters.
The Court reaffirmed that, in tax matters, decisions issued under the system of general repercussion or concentrated constitutional review prevail over individual judgments, even when final and unappealable. However, it held that, specifically regarding the CSLL issue, the subject that originated the precedent, taxpayers with prior final judgments in their favor would not be subject to penalties.
4. STF Rules That Selic Applies to All Disputes Involving the Public Treasury (Theme 1419)
The Supreme Federal Court (STF), in a judgment of general repercussion under Theme 1419, established that the Selic rate, as provided in Article 3 of Constitutional Amendment No. 113/2021, applies to the monetary adjustment of amounts in any dispute or judgment involving the Public Treasury, including the judicial collection of tax receivables.
5. STF Upholds Unconstitutionality of ISS on Contract Manufacturing and Sets 20% Cap on Late Payment Penalties (Theme 816)
On August 30, the judgment of the Supreme Federal Court (STF) became final, fully confirming the general repercussion thesis established under Theme 816, namely: (i) the imposition of ISS on contract manufacturing (subitem 14.05 of Complementary Law No. 116/2003) is unconstitutional when the goods are intended for industrialization or commercialization; and (ii) late payment tax penalties may not exceed 20% of the tax liability.
The STF modulated the effects of the ruling, which shall apply only as of April 30, 2025 (the date of publication of the minutes of the judgment), except for lawsuits filed before that date and cases of proven double taxation (ICMS and ISS), in which taxpayers may recover the ISS.
6. STJ Excludes Statute of Limitations for Writs of Mandamus Concerning Periodic Taxes
The Superior Court of Justice (STJ), unanimously and under the system of repetitive appeals, ruled that no statute of limitations applies to writs of mandamus challenging periodic tax obligations, which may be contested at any time due to their continuing nature. Only the five-year prescriptive period applies as a limit for the recovery of amounts paid in prior periods.
The full decision has not yet been published.
7. STJ Affects Repetitive Appeal on the Inclusion of ICMS DIFAL in the PIS/COFINS Tax Base
The issue under analysis is whether the ICMS differential rate (DIFAL) must be included in the calculation basis of PIS and COFINS, following the precedent established for the main ICMS levy (the "Thesis of the Century"). Until the merits are adjudicated, all special appeals and interlocutory appeals addressing this matter will be suspended nationwide.
No date has yet been set for the judgment.
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.
