Companies have the right to deduct, when calculating the real profit that will serve as the basis for calculating Corporate Income Tax, the fees paid to their directors and advisors, regardless of whether they are monthly and fixed.
With this understanding, the 1st Panel of the Superior Court of Justice ruled that the restrictions imposed on companies by the Federal Revenue Service rules for collecting IPRJ were undue. The case was judged on Tuesday (16/8), with a narrow majority of 3 votes to 2.
This is the first time that the STJ has taken a position on the issue, although this finally occurred in an action filed in 1999 and which took almost 20 years to reach the ordinary court, in 2018. The precedent may motivate the filing of new actions by taxpayers throughout Brazil.
The trial assessed whether changes to legislation since the 1940s would allow the Treasury to conclude that the fees of administrators and advisors of the legal entity could only be deducted from the IRPJ calculation base when they are fixed and monthly.
The law should veto deductibility
The nodal point is the incidence of article 43, paragraph 1, item 'b' of Decree-Law 5,844/1943.
The rule states that amounts withdrawn from companies that are not debited as general expenses and also those that, even if recorded in these accounts, do not correspond to the fixed monthly remuneration for the provision of services will be added to the real profit for IRPJ taxation.
For Minister Regina Helena Costa, this rule does not apply to fees paid to administrators and advisors, even if occasional, because they are classified as operating expenses of the company.
Since all costs and expenses are deductible from the IRPJ tax base in real profit, the restriction on this deduction should be provided for by law. Instead, the restriction appears in article 31 of Normative Instruction 93/1997 of the Federal Revenue Service, an infra-legal act that does not have such power.
The ministers Benedito Gonçalves and the summoned judge Manoel Erhardt voted with the rapporteur and formed the majority.
The law should allow deductibility
The dissent was opened by Minister Gurgel de Faria, who was defeated by Minister Sergio Kukina. For them, article 43, paragraph 1, item 'b' of Decree-Law 5.844/1943 does not make any distinction in relation to the withdrawal of values from companies.
Therefore, it also applies to cases of fees paid to administrators and board members. In this case, deductibility should be expressly provided for by law, which is not the case. Therefore, they understand that Normative Instruction 93/1997 is valid and fully applicable.
“From the reading and interpretation of the normative context that governs the matter, it is clear that the inclusion of any withdrawals of fees for administrators and advisors of the legal entity in taxable income is mandatory, and there is no exception in the governing legislation regarding the matter,” stated Gurgel de Faria in a separate vote read on Tuesday.
Repercussion
For attorney Janssen Murayama, partner at Murayama & Affonso Ferreira Advogados, the position corrects the violation of the systematic integration of taxation of legal entities and individuals. Since 1995, Brazilian tax legislation has provided for a rule that, if a certain income was taxed by a legal entity, it should not be taxed by an individual and vice versa.
“In this case, such amounts are taxed, and are subject to personal income tax. They are taxed to the extent that the administrators and boards receive these amounts. Since these amounts are already taxed on the individual, they cannot be taxed again on the legal entity, under penalty of violation, in this area of taxation of legal entities and individuals”, explained the specialist.
He also pointed out that the concept of income was violated. “The Constitution itself establishes a concept of income for the purposes of income tax and, in this case, if this expense were taxed — these amounts paid to administrators and board members —, it would be taxing an expense and not income, violating the constitutional principle of income,” he concluded.
REsp 1,746,268
Source: https://www.conjur.com.br/2022-ago-19/nao-incide-irpj-honorarios-pagos-administradores-stj