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The Brazilian Federal Supreme Court (STF) has resumed the judgment of ADI 5161, which discusses the constitutionality of the penalty imposed on legal entities that distribute profits, bonuses, or profit-sharing payments to shareholders and managers while they have outstanding debts with the Federal Government.
During the virtual session held between June 19 and June 26, 2026, a majority of the Court concluded that the penalty is constitutional. However, it may only be imposed when the tax debt has been definitively assessed and registered as active debt (dívida ativa), its enforceability has not been suspended, and it is not secured by a guarantee.
Although the decision was reached by majority vote, all Justices agreed on the constitutionality of the penalty. The divergence concerned only the wording of the legal thesis to be established and the specific circumstances under which the penalty should not apply. The case is still awaiting the formal announcement of the outcome and the publication of the court’s opinion (acórdão).
In light of this decision, it is important for companies to carefully review their tax position before formally approving the distribution of dividends and other bonuses.
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.
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