Newsletter no. 51 Year V May 2012

Transcription

1 Tax Bulletin tax report we enjoy and believe in our work Newsletter no. 51 Year V May 2012 We are pleased to present the fifty-first edition of our TAX BULLETIN, the newsletter whereby we update clients, as well as those interested in the most recent tax issues. Enjoy your reading. Case Law STF IR and CSLL controlled or associated company abroad General Repercussion The Federal Supreme Court ( STF ), in the case records of Extraordinary Appeal ( RE ) no , recognized the existence of the General Repercussion concerning the moment of levy of the CSLL and IRPJ taxes on earnings deriving from equity variation of investments of the legal entity based in Brazil in foreign companies (associated or controlled companies). The discussion revolves around the constitutionality of article 74 and the sole paragraph of Provisional Measure ("MP") no /01, which adopt the date of the balance sheet on which the profits were ascertained in the controlled and associated companies as the moment the income is considered available, regardless of the effective payment or credit. Justice Joaquim Barbosa, reporting on the case, defended the recognition of the General Repercussion of the matter, taking into account the competitiveness of the domestic companies in the international arena. The possibility of the judgment of an Extraordinary Appeal being affected with the recognition of a General Repercussion, with the purpose of having the final position reflect that of the current Justices of the STF, was confirmed. The reason is that in ADI (Action for the Declaration of Unconstitutionality) no , which judgment was postponed in the session of 08/17/2011, Justices Luiz Fux, Cármen Lúcia, Dias Toffoli, and Gilmar Mendes, all of whom currently integrating the Supreme Court, did not vote. That is, of the eleven Justices of the Court, four did not express their positions. ssplaw@ssplaw.com.br.

2 STJ Telecommunications Companies may use credits arising from the ICMS paid at the acquisition of electrical energy The 1 st Section of the STJ, in the judgment of Special Appeal ( REsp ). no , concluded that telecommunications companies may use ICMS credits arising from the acquisition of electrical energy. The Special Appeal was brought by the State of Rio Grande do Sul in May of 2006, and since then it has been subject of several requests for examination by the Justices composing the First Section. The Reporting Justice, Luiz Fux (currently in the STF), had already rendered his position dismissing the State s Appeal, as he viewed that electrical energy represents an essential resource for the provision of telecommunication services. For most Justices, the manufacturing process is not limited to the transformation of tangible assets, and may also be developed by a service rendering company. The relevant issue of the debate was limited to equating telecommunications companies with industries. According to Justice Castro Meira s opinion, the Law of Telecommunications classified the activities as service provision, whereas Decree no. 640/62 classifies telecommunications services as basic industry. In the Justice s view, a 2 legislative act is not contrary to the other, as in fact, the activity of the appealing company, Brasil Telecom S/A, is typically that of service provision, but by force of law, it equates with industries for all purposes. Justice Herman Benjamim was the only one to render a dissenting opinion, because to him, the mentioned Decree was repealed by the National Tax Code, preventing the use of the ICMS credits. Therefore, the First Section of the STJ, by majority vote, dismissed the Special Appeal brought by the State of Rio Grande do Sul and ensured the right of Brasil Telecom S/A to use the credits deriving from the ICMS paid at the acquisition of electrical energy necessary for the rendering of telecommunication services. STJ Substantive Limits of Res Judicata Civil Procedure IPTU Tax Rate Progression The Second Panel of the Superior Court of Justice ( STJ ) in the case records of Special Interlocutory Appeal (AgRg) in AREsp /PR, dismissed the Appeal filed by the Municipal Treasury of Londrina seeking the overruling of the decision rendered by Justice Humberto Martins who, in reinforcing the Court s case laws, reaffirmed the position that the effect of the final and unappealable decision (res judicata) of tax matters is extended to future assessments, when the decision deals with substantive law,

3 declaring the inexistence of a tax and legal relation, ruling out the application of Precedent no. 239, of the STF ( A decision stating that the collection of the tax in a given fiscal year is undue is not deemed final and unappealable in relation to future fiscal years. ). In sum, the taxpayer brought an action seeking the recognition of inexistence of a tax and legal relation with the City of Londrina with regard to the progression of the IPTU rates, in the period from 1997 to The legal arguments presented by the taxpayer were these two: in the period from 1997 to 2000, it claimed the un constitutionality of the collection, since the tax rates should be created at the assessed value of the real estate only; for the fiscal year of 2001, the taxpayer defended the illegality of the municipal legislation that created the IPTU, since it failed to meet the requirements under the City s Statutes (Federal Law no. 10,257/2001), such action being deemed to have grounds and a final and unappealable decision was rendered. Later, without there being no amendment to the legislation that created the IPTU in that city, a Special Enforcement Action seeking the collection of the IPTU for the fiscal year of 2003 was brought. The Court of origin (TJPR) handed down its position no establishing that the decision issued in the cognitive proceedings did not include the period of 2003, determining res judicata only in relation to the periods of 1997 to 2001, 3 therefore applying the position consolidated in Precedent no. 239 of the STF. This decision was reversed by the 2 nd Panel of the STJ which, following other precedents of the Court, viewed that in cases in which the final and unappealable decision deals with a legal relation of substantive law (substantive aspect of the levy event), of cumulative nature, as is the case of the IPTU, and if factual and legal circumstances are maintained, on which basis the inexistence of the tax and legal relation or the unenforceability of the tax was recognized, the res judicata effect is extended to future assessments. With this decision, the STJ is consistent with the issued precedents, seeking the legal certainty of the right and effectively conforming to the ultimate purpose of stabilizing interpersonal legal relations. STJ REFIS Possibility of reducing the amount of the fine by 40% The Second Panel of the STJ, in the judgment of Special Appeal ( REsp ) no , reported by Justice Humberto Martins, viewed that the repealed article 60 of Law no. 8,383/91, which provided for the reduction of the fine by forty percent to taxpayers that entered into installment agreements of their debts within the legal term of opposition, is to be applied to debts

4 included in the Tax Recovery Program ( REFIS ). The Appeal in question was brought by the Federal Government (National Treasury) against an appellate decision handed down by the Federal Regional Court ( TRF ) of the 4 th Region, which upheld the decision of the original court on the grounds that 60 of Law no. 8,383/91 is to be interpreted in accordance with 9 of article 2 of Law no. 9,964/00. In order to decide, the Reporting Justice then established that the reduction of the fine by 40% is not limited to requests of installment payments made within the term of opposition, since article 1 of Law no. 9,964, of 2000, allows the inclusion of all debts of the company into the REFIS program, including those recorded as collectible or which are subject of a tax enforcement action. TRF 3 rd Exclusion of the ICMS from the PIS and COFINS tax bases Due to lapse of term of the last extension of the effects of the injunction which suspended the judgment of judicial actions discussing the possibility of excluding the ICMS from the PIS and COFINS tax bases (ADC no. 18), the Federal Regional Court of the 3 rd Region is proceeding with such judgments. The Third Panel of this Court in a judgment held in the beginning of May, 4 reported by Federal Associate Justice Nery Junior, decided to grant the Appeal filed by the Taxpayer, accepting the thesis that the inclusion of the ICMS into the PIS and COFINS bases should not be accepted. Despite the provisions in Precedent no. 94 of the STJ ( The installment relative to the ICMS is included into the tax basis of FINSOCIAL ), the vote of the Reporting Justice followed the position held by the Federal Supreme Court in the judgment of RE no , thus ruling out the position contained in the precedent. According to the reporting Associate Justice although the judgment had not been concluded, given the request for examination, the line adopted by the Reporting Justice followed by the majority of that Court s Bench is very significant and adjusted to the provisions in article 195, item I, of the Constitution and pursuant to the interpretation given by the Supreme Court to such provision, when setting the concept of delimitation of income and revenue elements. STJ Levy of PIS and COFINS on internal transportation of exported goods In a session held on 05/08/2012, the 2 nd Panel of the STJ concluded the judgment of Special Appeal no /MG, affirming that the internal transportation of goods between the producing

5 establishment and the port or airport with Customs for clearance, albeit exported in the future, does not constitute international transportation of cargo, for which reason the PIS and COFINS are charged on income arising from the mentioned transportation. In this case, the discussion revolved around article 14, item V, coupled with 1 of MP /01, which sets forth an exemption of the PIS and COFINS charged on income deriving from the international transportation of cargo. The company sought an exemption of the PIS and COFINS contributions charged on the income earned with the transportation of goods between the producing establishment and the port of Santos, where the goods were exported, under the argument that the internal transportation should receive the same treatment as that of export. The TRF of the 1 st Region had recognized Taxpayer s right, affirming that If the purpose of the rule is to make the domestic product more competitive in the international market, demanding from exporting companies located in the interior of the Country the collection of the COFINS and PIS/PASEP on the cost of internal transportation of the goods to be exported has no legal grounds if the payment of the international transportation is exempted, for which reason the National Treasury filed an appeal with the STJ. company is not an export company, but only transports goods to third parties, which then effectively export them, and that article 14, item V, coupled with 1 of MP /01, is clear that the tax benefit refers only to the income arising from the international transport of cargo or passengers, and that the rules dealing with the granting of a tax exemption are to be interpreted literally and restrictively, pursuant to article 111, item II of the CTN. The appellate decision has not been published yet. Legislation and Response to Inquiries Decree no /2012 Access to information Decree no was published in the Federal Official Gazette (D.O.U.) of 05/17/2012, regulating on the procedures for the guarantee of access to information and for the classification of information of limited access, within the Federal Executive Branch, subject to the level and period of secrecy. According to the Decree under analysis, agencies and entities of Federal Executive Branch must ensure the right of access to information, which is to be provided through objective and fast procedures, with transparency and in a clear manner and language. In the STJ, Justice Castro Meira, reporting on the appeal, affirmed that the 5

6 Social Contribution on Net Income Insurance Companies Divergent Solution no. 4 was published on 05/10/2012, whereby the General Coordination of the Tax System ( COSIT ) standardized the position of the Federal Revenue of Brazil setting forth that for the calculation of the Social Contribution on Net Income ( CSLL ), the insurance companies are to use a 9% tax rate. IRPJ Choice of rate of the Plant, Property and Equipment Through Response to Inquiries nos. 42 and 43, published on 05/09/2012, the Regional Superintendence of the Federal Revenue of Brazil of the 6 th Tax Region decided that legal entities may choose, within the limits set forth in the normative opinion of COSIT no. 79/1976 and in the Income Tax Regulation, the depreciation rate of the assets of the plant, property and equipment. IRPJ Income from collective insurance policies Through Response to Inquiry no. 44, published on 05/09/2012, the Regional Superintendence of the Federal Revenue of Brazil of the 6 th Tax Region decided that legal entities operating as grantors when entering into collective insurance policies are to consider the remuneration deriving from such transaction as taxable 6 income. However, the amounts of premiums received from the insured, transferred to the insurance company, is not to be considered taxable income. SOUZA, SCHNEIDER, PUGLIESE E SZTOKFISZ ADVOGADOS law firm is available to its clients, should they have any questions on the above matters. Team responsible for preparing the Tax Bulletin: Igor Nascimento de Souza (igor@ssplaw.com.br) Henrique Philip Schneider (philip@ssplaw.com.br) Eduardo Pugliese Pincelli (eduardo@ssplaw.com.br) Cassio Sztokfisz (cassio@ssplaw.com.br) Fernanda Donnabella Camano de Souza (fernanda@ssplaw.com.br) Diogo de Andrade Figueiredo (diogo@ssplaw.com.br) Bruno Baruel Rocha (bruno@ssplaw.com.br) Flavio Eduardo Carvalho (flavio@ssplaw.com.br) Vitor Martins Flores (vitor@ssplaw.com.br)

7 Rafael Monteiro Barreto Sidney Kawamura Longo Rafael Fukuji Watanabe Leticia Brandão Tourinho Dantas Wilson Rodrigo Vieira da Silva Carolina Balieiro Salomão Rodrigo Tosto Lascala Ana Paula Medeiros Costa Murilo Bunhotto Lopes Laura Benini Candido Júlio César Soares Rua Cincinato Braga, 340 9º andar São Paulo (SP). Phone: (55 11) Brasília Shopping SCN Quadra 5, Bloco A Torre Norte 13º andar Sala Brasília/DF. Phone: (55 61)