The ministers of the 1st Section of the Superior Court of Justice (STJ), unanimously, maintained the understanding that has been adopted by the Court in the sense that taxpayers cannot, in the tax execution phase, discuss tax compensation – with the use of tax credit to pay debts with the tax authorities – not recognized by the National Treasury previously in the administrative route.
The justices decided not to hear the divergence appeal filed by Raízen Combustíveis. This is EREsp 1795347/RJ. The panel understood that the divergence on the subject between the 1st and 2nd Panels had already been overcome and that, therefore, according to Summary 168 of the STJ, there is no room for further discussion of the matter.
The rapporteur, Justice Gurgel de Faria, stated that, although there had been a divergence on this issue before, the two panels aligned their position, in light of article 16, § 3, of the Tax Enforcement Law (LEF). According to this provision, in the objections to tax enforcement, “counterclaims or compensation will not be admitted, and the exceptions, except those of suspicion, incompetence and impediments, will be argued as preliminary matters and will be processed and judged with the objections”.
Thus, the STJ understands that the tax compensation that can be alleged in the tax enforcement phase is that which has already been recognized administratively or judicially before the filing of the tax enforcement action.
The rapporteur noted, however, that this does not prevent taxpayers from questioning the Treasury's refusal to accept their tax credit to pay the debt, but that this must be done through “appropriate judicial channels” other than the execution embargoes.
According to lawyers interviewed by JOTA, this judicial route would be an annulment action. “It is true that the execution embargoes are not the appropriate route to investigate such issues, which should be discussed in the appropriate judicial environment, since the tax execution must move forward, and it is not lawful for the judge, due to the obstacle of article 16, § 3, of the LEF, to approve compensation in execution embargoes when such a request was administratively denied by the tax authorities”, stated the rapporteur.
“The control of the legality of the administrative act that rejected the request for tax compensation must, therefore, be carried out through the appropriate judicial channels. The taxpayer does not have the right to demonstrate in his defense, in objections to execution, the lack of certainty and liquidity of the active debt certificate (CDA) for this reason, according to the interpretation given by this court”, concluded the rapporteur.
For tax lawyer Gustavo Vita Pedrosa, from Ogawa, Lazzerotti e Baraldi Advogados, by maintaining the understanding of both groups in the sense of prohibiting the claim of compensation in objections to tax execution, “the STJ ends up endorsing that administrative decisions that do not approve companies' compensations are final, which certainly does not comply with the Federal Constitution”.
The expert highlights that several decisions by the Treasury, in the sense of denying the right to compensation, are issued electronically, through simple operational cross-referencing of data and without a concrete analysis of the taxpayers' credit.
“In numerous cases, just a few months after the end of the discussion in the administrative sphere, there is the filing and citation of the tax execution against the taxpayer, which, based on the interpretation of the STJ, will make it impossible to discuss the illegitimacy of the collection by embargoes to the tax execution”, criticizes Pedrosa.
He notes that there is not always time to file an annulment action. “The prosecutor’s office files the tax enforcement action, the company is summoned and then is forced to file an objection to the tax enforcement action,” says the lawyer.
Tax lawyer Bárbara Cristina Romani Silva, from Rolim, Viotti, Goulart, Cardoso Advogados, said that the outcome of the trial was surprising. She stressed that the STJ’s previous understanding was to accept discussing this compensation in the tax enforcement phase, and that the Court was expected to return to its “decades-old position”. “The decision is very bad for taxpayers, as it makes tax litigation more complex and could lead to greater costs,” says Bárbara.