On September 21, Law 14.689/23 was sanctioned, with 14 vetoes, altering the voting system in the Administrative Council of Tax Appeals (Carf). The primary change is the reinstatement of the casting vote, which, in the event of a tie in decisions, will favor the tax authority.
Carf, established in 2009, primarily adjudicates second-instance administrative cases involving tax and customs matters. It has a balanced structure, with an equal number of representatives from the National Treasury and taxpayers. With the new law, the casting vote ensures that the presidents of Carf’s divisions and chambers, representing the National Treasury, have the power to break ties always in favor of the Union.
This change highlights the government’s ongoing efforts to optimize tax collection and meet fiscal targets. The reinstatement of the casting vote in Carf could have significant implications for resolving pending tax disputes.
The legislative amendment proposal emerged in May of this year when the Executive submitted a bill to the National Congress. This action followed the expiration of a provisional measure on the subject. The law’s journey through Congress was swift, approved by the Chamber in July and then by the Senate in August.
Vetoed Points:
Fines: The section proposing a reduction of the 75% fine in certain situations was vetoed.
Guarantees: Other vetoed changes relate to the Law of Tax Executions (6.380/80), particularly the liquidation of guarantees until final judgment and the value of guarantees covering only the principal debt, excluding interest and penalties.
Tax Transaction: Exclusions were made in the provisions on tax transactions in cases decided by the casting vote in Carf.
CCAF and Self-Regularization: Proposals directing specific disputes to the Federal Public Administration Mediation and Conciliation Chamber (CCAF) and requiring the Federal Revenue to offer self-regularization mechanisms were vetoed.
Qualified Fine: The section that removed the qualified fine under certain circumstances was vetoed.
Maintained Points: Casting Vote in Carf: The law restores the casting vote, giving Carf’s division presidents the power to break tie votes, usually favoring the Union.
Transaction by Adhesion: Transactions by adhesion can now have discounts of up to 65% and payment terms of up to 120 months.
Tax Compliance: Establishes incentivizing measures for taxpayer self-regularization.
Transgenic Seeds: Companies multiplying transgenic soybean seeds can now deduct 100% of royalties from the IRPJ and CSLL tax base.
The sanctioning of Law 14.689/23, bringing significant changes to the Carf voting system, signals a move towards maximizing tax collection and achieving fiscal targets. The reintroduction of the casting vote, favoring the Union in tie decisions, is particularly emblematic of this intent. The vetoes, especially those regarding fines and guarantees, also reinforce this perspective of maintaining fiscal rigidity.
Conversely, measures like transactions by adhesion and incentives for self-regularization indicate an openness to negotiations and adjustments. Despite the new legislation reflecting a tendency, albeit nascent, to optimize tax collection, it continues to maintain high operational costs that excessively burden the taxpayer, especially regarding the early execution of offered guarantees in judicial proceedings, thus consolidating an increasingly uncertain and inhospitable environment for businesses.