STF Authorizes Automatic Disregard of Res Judicata Decisions Without Modulation of Effects


On February 8th, the Supreme Federal Court (STF) concluded the judgment of two Extraordinary Appeals (RE 949,297 and 955,227) in which the possibility of decisions protected by res judicata being disregarded due to changes in the understanding of higher courts in cases of concentrated or diffuse control actions with recognized general repercussions was discussed.

Thus, the STF established the understanding that it is possible to automatically annul decisions made before the change in understanding, protected by res judicata, allowing their immediate disregard without the need for rescissory or revisionary actions.

Faced with a majority unfavorable to companies, taxpayers requested the modulation of the effects of this decision in an attempt to minimize the harmful tax effects resulting from this understanding. Unfortunately, the appeal was not accepted, and the modulation was dismissed by a narrow majority of 6 votes to 5.

Therefore, favorable decisions obtained by taxpayers may be automatically annulled without the need for rescissory actions, allowing the Tax Authority to retroactively collect unpaid taxes for the past 5 years.

The main topics in which taxpayers may suffer from the reversal of the STF’s understanding include: the deduction of the Social Contribution on Net Income (CSLL) from the Corporate Income Tax, the Industrialized Product Tax (IPI) on the resale of imported goods, employer contributions on vacation pay, and the requirement of the Contribution for the Financing of Social Security (Cofins) for single-professional companies.


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