Newsletter ' May/21 | Tax Law

• Published date: 04 June 2021
• Subject Matter: Tax, Income Tax, Tax Authorities
• Law Firm: Koury Lopes Advogados
• Author: Koury Lopes Advogados

THE SUPREME COURT RULED THAT IMMUNITY OF LABOR UNIONS, POLITICAL PARTIES AND EDUCATIONAL INSTITUTIONS APPLIES TO THE TAX ON FINANCIAL TRANSACTIONS - IOF

The Supreme Court decided, in a trial held on March, 12, that the tax immunity granted by the Federal Constitution to labor unions, political parties and educational institutions applies to the Tax on Financial Operations ("Imposto sobre Operaç'es Financeiras" - IOF).

The National Treasury filed an extraordinary appeal on the grounds that the IOF would be outside the scope of the immunity since it is levied on financial transactions and not on the assets, income or services of the taxpayer, and therefore there would be no connection with the purpose of the entities.

The Plenary Session of the Brazilian Supreme Court found that such interpretation was too restrictive and established the following thesis: "The immunity provided for in the section 150, VI, 'c', of the Constitution of the Republic to political parties, including their foundations, labor unions and non-profit educational and social assistance institutions, which meet the conditions of the law, applies to the IOF, including the IOF levied on financial investments".

WHARFAGE COSTS SHOULD BE INCLUDED IN THE CALCULATION BASIS OF THE IMPORT TAX, SAYS THE SUPERIOR COURT OF JUSTICE

Taxpayers discussed for years the illegality and unconstitutionality of the Federal Revenue's Normative Ruling no. 327/03, which determined the inclusion of wharfage services (services related to the cargo handling in ports) in the import duty calculation basis (and other taxes levy upon importation).

The Superior Court of Justice had a consolidated understanding, both by the First and Second Panels, for the illegality of the inclusion of such expenses in the customs value.

However, those precedents have recently been overturned, since the 1st Section of the Superior Court of Justice finalized the judgment of Theme No. 1014, surprising taxpayers by establishing the following thesis: "Wharfage services are included in the composition of the customs value and are part of the import tax calculation basis".

In addition, the Federal Supreme Court, which on other occasions had determined that the customs value should be that determined by the Customs Valuation Agreement, when analyzing the matter (ARE No. 1.305.313 and No. 1.299.840) stated that the case did not have a constitutional nature, therefore the understanding of the STJ prevails.

SUPERIOR COURT OF JUSTICE DECIDES THAT...