Brazil’s Supreme Court Rules that Tax Debt Installment Plan Halts Criminal Proceedings for Tax Offenses


On August 14, the Supreme Federal Court (STF) of Brazil, in the case of Direct Unconstitutionality Action No. 4273, ruled that the installment of tax debts prevents the continuation of a criminal action arising from these debts.

This issue resurfaced following a revision request made by Minister Alexandre de Moraes in May of the current year. In the judgment on the 14th, the Court unanimously sanctioned the constitutionality of Articles 67, 68, and 69 of Law No. 11.941/2009 and Article 9, §§ 1 and 2, of Law No. 10.684/2003. This decision establishes that the State’s punitive intention regarding crimes against the tax order can be postponed as long as the installment agreements are in effect. Moreover, if the debt is fully settled, the punishability is extinguished.

Minister Nunes Marques, the rapporteur of the action, who was followed by all other ministers, argued that the tax installment, as well as the full payment of tax credits, plays a crucial role in restoring the damages inflicted on the public treasury. These mechanisms encourage the economy and lead to a significant increase in tax collection, thus enhancing the performance of the state function.

The Attorney General’s Office (PGR) defended maintaining the punitive intent. However, the STF understood that if a company was complying with a tax installment agreement and was still the target of an accusation for a crime related to the same debt, there would be a clear lack of just cause to proceed with a criminal action, as advocated by the Code of Criminal Procedure. Thus, the STF’s position provides taxpayers with greater security and predictability in their legal interactions with the public power.


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