STJ defines application of late interest reduction on tax debts


On November 11th, the 1st Section of the Superior Court of Justice (STJ) once again examined the issue of applying the reduction of late interest in cases of early settlement of tax debts. Unanimously, the STJ, when judging Special Appeals 2,006,663, 2,019,320, and 2,021,313 (Topic 1187), established that the reduction of interest should be calculated based on the original value of the debt after its consolidation, even in situations where there is a 100% reduction in late and official fines.

This decision arose from the interpretation of Article 1 of Law 11,941/2009, which deals with the reduction of fines in cases of cash payment of tax debts. The National Treasury argued that the exclusion of fines should not imply a proportional reduction in late interest. Taxpayers, on the other hand, argued that the complete elimination of fines should affect the calculation of interest.

Minister Herman Benjamin, the rapporteur of the case, proposed the thesis that was accepted by the panel: the reduction of late interest should be applied to the original amount of the debt, without considering the remission of late and official fines. According to Benjamin, there is no legal basis for a proportional reduction in late interest resulting from the exclusion of fines unless the law specifies this clearly.

The judgment sets an important precedent on how late interest reductions should be applied in situations of early settlement of tax debts. The STJ’s decision clarifies the interpretation of Law 11,941/2009, offering greater legal certainty for the National Treasury and taxpayers.


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