The Brazilian Federal Revenue Service (RFB) has expressed its position, through Solution of Consultation No. 206/03 and No. 232/07 and SRF Interpretative Declaratory Act No. 25/03, to the effect that it suffices to have the final and unappealable decision in an action recognize the right to restitution of amounts to call for the levying of IRPJ and CSLL for legal entities submitted to the accrual method.
Specifically in SRF Interpretative Declaratory Act No. 25/03, the RFB presents two scenarios for tax assessment purposes when the court decision does not define the amount to be refunded: the date of sending of the judicial payment order or, if a motion to stay execution is filed, the date of the final and unappealable judgment.
In this scenario, with the growing number of final and unappealable cases that recognize the right to repetition, many taxpayers have opted to go to court to litigate the time when the IRPJ and CSLL are levied, if whether:
- at the time of the final and unappealable decision that declared only the right to set off, the calculation/settlement of which will occur administratively;
- at the time of registration of the administrative claim; or
- in the transmission of setoff declarations (DCOMPs).
The federal circuit courts have been providing different solutions for the issue and have, in general, analyzed the issue according to the concepts of asset increase and economic and legal availability, and the (i) liquidity of the credit recognized by the final and unappealable decision, for the purposes of levying IRPJ and CSLL.
Recently, the Federal Court of Appeals for the 3rd Circuit expressed its position in favor of the taxpayer's theory and set aside the levying of IRPJ and CSLL, inasmuch as the final decision had only assured the right to offset, without identifying the amount actually due. The court established that IRPJ and CSLL are due only when the tax authorities approve the offset.
Along the same lines, there is the recent decision by the Federal Court of Appeals for the 5th Circuit, which found that IRPJ and CSLL will be levied if, on the date of the final and unappealable judgment, the decision defines the amount to be returned. If only the right to offset is recognized, taxes are not required at the time of the final and unappealable judgment.
The Federal Court of Appeals for the 2nd Circuit, in turn, has precedents to the contrary, since it concluded that "once the taxpayer's right to a setoff credit is recognized by a final and unappealable decision, the legal availability of the revenue (asset increase) will already be accrued, and the triggering event for the IRPJ and CSLL is established.
Along the same lines argued by taxpayers, the Superior Court of Appeals (STJ) reviewed an analogous claim and recognized that mere expectation of right and indebtedness resulting from the final and unappealable decision does not represent an asset increase to be taxed by IRPJ and CSLL, as established in article 43 of the National Tax Code.
Considering the divergent decisions rendered by the federal circuit courts regarding the interpretation of federal legislation, it will be incumbent on the STJ to give the final word on the matter, in order to provide legal certainty to taxpayers as to when they will offer the tax credits to the tax authorities.
TRF 3rd Circuit, Ap 5004691-74.2019.4.03.6114, opinion drafted by Federal Appellate Judge Antonio Carlos Cedenho, decided on July 24, 2020; AI 5010177-15.2020.4.03.0000, opinion drafted by Federal Appellate Judge Marli Marques Ferreira, decided on July 20, 2020.
Ap 08107154820194058400, Federal Appellate Judge Rogério de Meneses Fialho Moreira, 3rd PANEL, decided on July 2, 2020.
TRF 2nd Circuit, 3rd Specialized Panel, Appeal 5004097-22.2019.4.02.5101, opinion drafted by Federal Appellate Judge THEOPHILO ANTONIO MIGUEL FILHO, decided on December 3, 2019; TRF 2nd Circuit, 3rd Specialized Panel, Appeal 5035622-22.2019.4.02.5101, opinion drafted by Federal Appellate Judge MARCUS ABRAHAM, decided on August 10, 2020.