The return of the casting vote in CARF and unfavorable changes for taxpayers in the field of tax administrative proceedings


At the beginning of the year, the government once again surprised taxpayers by issuing Provisional Measure No. 1,160/2023, reinstating the casting vote in judgments within the Administrative Council for Tax Appeals (CARF), as provided for in its Article 1:

“In the event of a tie vote within the scope of the Administrative Council for Tax Appeals, the judgment result will be proclaimed in accordance with the provisions of § 9 of Article 25 of Decree No. 70,235, of March 6, 1972.”

This procedural measure authorized the president of the judging panel, always a representative of the Brazilian Federal Revenue Service, to cast the so-called “casting vote” in cases of tied votes in the judging panels.

This measure is seen as a setback for companies since the casting vote had been revoked by the National Congress in 2020 with the enactment of Law No. 13,988/20, which established the tiebreaker criterion in favor of the taxpayer, aiming to ensure parity in the chambers and judging panels.

Since then, in the event of a tied vote among the councilors, the decision would be in favor of the audited companies, in an attempt to strike a balance between the prerogatives of the taxpayer and the tax authorities.

It is worth noting that the constitutionality of Law No. 13,988/20, which abolished the casting vote within CARF, was brought before the Supreme Federal Court (STF), which, after several suspensions of ADI 6,399, 6,403, and 6,415, formed a majority to recognize the constitutionality of the law. So far, Justices Marco Aurélio (already retired), Luís Roberto Barroso, Alexandre de Moraes, Luiz Edson Fachin, Cármen Lúcia, and Ricardo Lewandowski have voted in favor of the abolition of the casting vote.

With its return, taxpayers fear that significant victories obtained over the past two years will be reversed in favor of the tax authorities, resulting in considerable tax liabilities that were previously settled in favor of companies. This situation reinforces the sense of legal uncertainty that hinders the development of more efficient strategies for companies to increase their investments in the country.


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