STF Declares Unconstitutional the 50% Fine for Unapproved Tax Credit Offset


The Supreme Federal Court (STF) concluded the judgment of RE 796939 and ADI 4905 on Friday, March 17th, in which the constitutionality of applying a 50% fine by the tax authorities when a taxpayer’s tax credit offset is not approved was discussed.

Unanimously, the Supreme Court ruled that applying a standalone fine solely because it was not accepted by the tax authority is unconstitutional. The justices understood that the fine has a punitive nature and, therefore, can only be applied in cases where the act performed by the taxpayer is subject to sanction, under penalty of violating the constitutional right to petition, which states that “all are guaranteed the right to petition the Public Powers in defense of rights or against illegality or abuse of power¹.”

The mere request for approval or request for offset of a tax credit recognized judicially cannot justify the application of a standalone fine, as such requests do not constitute matters subject to penalties, and they cannot presume bad faith on the part of the applicants. Furthermore, there are legal provisions for the application of various other fines that are related to the commission of illicit acts by the taxpayer, as noted by Justice Gilmar Mendes, the rapporteur of ADI 4905.

In this regard, Justice Alexandre de Moraes made a caveat in his vote to agree with the rapporteur, stating that in cases of proven bad faith on the part of the taxpayer, sanctions could be applied, provided they are proven in the specific case.

At the end of the judgment, the STF established the following thesis: “The standalone fine provided by law for imposition in the face of the mere denial of the approval of tax offset is unconstitutional because it does not constitute an illicit act with the ability to automatically result in a pecuniary penalty².”


¹ artigo 5º, XXXIV, alínea a, CF.



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