The House of Representatives approved, in plenary session on July 7, the Bill of Law 2.384/23, which resumes the casting vote at the Administrative Tax Court (Carf). The approved text is the replacement suggested by the rapporteur, Mr Beto Pereira (PSDB / MS).

The Bill of Law, an initiative of the President, was being processed under an emergency regime and was blocking the agenda of the plenary, according to constitutional determination. It was presented after the end of the validity of Provisional Measure 1.160/23, which had resumed, in January, the casting vote at Carf.

These are the main points addressed by the substitute approved by the House of Deputies:

  • The resumption of the casting vote in Carf. Under the terms of the initial wording of the Bill of Law, the tie-breaking vote in the Carf judgments must be declared by the president of the judging panel, which is always a representative of the National Treasury.
  • The rapporteur added to the text of the Bill of Law the provision for the exclusion of penalties, interest and possible representation for criminal purposes to proceedings whose result is favorable to the Public Attorney by casting vote. The change promoted by the rapporteur stems from partial acceptance of an agreement made between the government and the Federal Bar Association at the beginning of the year.
  • The payment of the tax credit determined by casting vote may be made, with the reduction of fine and interest, through the use of NOLs (for both IRPJ and CSLL), including from controlled or controlling company.
  • The qualified penalty in cases of evasion, fraud and collusion is limited to 100% and, depending on the taxpayer's compliance history, can be reduced to 1/3 or no longer applied. The percentage of 150% will be applicable only in cases of recidivism.
  • The limit of 60 minimum wages is maintained for the purpose of filing a voluntary appeal to Carf. The original wording of the Bill of Law included an increase of this threshold to one thousand minimum wages.
  • The possibility of conducting oral argument in trials held at first instance. Until then, the trials held in the first instance were not public, neither was it possible for the representative of the taxable person to follow up the discussions of the oral defense.
  • Dismissal from the presentation of a guarantee, until the judgment, for the judicial discussion of the tax credits resolved favorably to the Public Attorney by casting vote, provided that the taxpayer proves the ability to pay the tax credit under the terms defined in the law.
  • Provision, during the four months following the conversion of the bill into law, of special conditions for the payment of tax credits not yet constituted. The goal is to encourage regularization by taxpayers.

Regarding the resumption of the casting vote and the reduction of penalties and interest in judgments decided by this mechanism, the bill makes reference to the tax administrative proceeding, but does not make it clear whether such changes will also be applied to customs proceedings.

Another point that draws attention is the lack of isonomy upon granting of benefits to cases of up to 60 minimum wages. By the provision of the bill, only cases that reach Carf will have the reduction of penalty and interest if the result is favorable to the Public Attorney by casting vote. The benefit is no longer granted to the cases of lower values judged at the first instance.

After the consolidation of the substitute approved by the plenary of the House of Representatives, the project will be submitted to the analysis by the Senate. Due to the request for urgency, the proposal must be analyzed within 45 days, counted from the date of receipt. After this period, all other legislative deliberations of the Senate will be suspended until the analysis of the bill of law (according to article 64, paragraph 2, of the Federal Constitution).

The legislative recess will take place between July 18 and 31, which may interfere with the consideration of the text by the Senate.