Effects Of The New Brazilian Code Of Civil Procedure On Tax Proceedings

The new Brazilian Code of Civil Procedure (CPC) enacted by Law nº 13105/2015 and enforceable as of March 2016 will affect all pending civil claims, including those of tax nature that are also governed by the rules of said code.

We must remind that the tax matters in Brazil represent a very high amount in dispute, and the new code will help the tax disputes to have an earlier closing in a more safe procedure.

The procedural law has been, in general terms, modernized to make court performance more expeditious meanwhile the certainty, according to which procedural acts need to be performed, is ensured as it is also ensured the adversary system and legal defense.

Although one only type of appeal has effectively ceased to exist - the "agravo retido", an interlocutory appeal whose trial is postponed until the final judgment is appealed -, some of the created mechanisms may be time-saving solutions that will not affect the legal certainty. As a main example, we mention the trial of repetitive claims in a single proceeding (incidente de resolução de demandas repetitivas), which will certainly be useful for tax law cases.

This system might be largely used in tax litigation, specially those involving principles. Under said system, the judge, the court, the parties in the case and even the Public Prosecution Office and the Office of Public Defenders may plea for this kind of proceeding, and such plea is referred to the Presiding Judge. The proceeding is only launched if it is proved that the suits are effectively a repetition and that they discuss one same subject matter that is exclusively a legal question and there must exist risk to equal protection and legal certainty simultaneously.

Meanwhile the Court reviews the legal question discussed in the proceeding, all claims over the same subject matter are stayed and, once the Court has a ruling on the proceeding, the legal principle set therein will apply to all individual or class suits concerning the same legal question being judged within the jurisdiction area of the respective Court as well as to suits in the future that might discuss the same legal question that is decided in this type of proceeding.

Therefore, in case of a tax subject matter, the party itself may petition that such subject be tried pursuant to this type proceeding and the judgment on one single case will automatically apply to cases of past and future and the dispute over the right is settled (currently, every and all repeated...