This content is from: Brazil

Brazil’s judiciary are set for an equally challenging second half to 2020

Alessandra Gomensoro of Mattos Filho considers how the coronavirus pandemic may cause further discontent for the already overwhelmed Brazilian judiciary.

The Brazilian tax system has always been the subject of many discussions in the judiciary. This is not only due to the difficulty that taxpayers have in interpreting the system given its complexity, but also as a result of the repeated errors of legislative techniques incurred in the issuance of laws, which often disregards the most fundamental tax principles.

On the other hand, the fact that the main tax rules are expressly dealt with in the Brazilian Constitution causes many of the tax disputes to conflict with constitutional norms, and the resolution of which rests with the Supreme Court.

This constitutionalisation of tax rules, which is quite particular in Brazil and is not seen in many other countries, leaves the Supreme Court overwhelmed, and prolongs the definitive resolution of the themes.

While there is no final interpretation on these matters, taxpayers usually continue to pay taxes. Often years later, when the court concludes that levying is improper, it is not uncommon for the government to try to cause embarrassment regarding the refund of amounts on the grounds that the reimbursement will impact the public coffers.

Within this complex context, being aware of the relevance of its decisions and the importance of resolving the main tax issues in the fastest possible way, the Supreme Court included some of the most emblematic and controversial proceedings on the judgment docket of its sessions during the course of the year 2020.

The final judgment of one of the largest tax discussions that the court has ever faced was scheduled for April 1: the exclusion of ICMS from the basis for calculating PIS and COFINS contributions, the merits of which have already been decided favourably to taxpayers in 2017, but had its closure postponed by an attempt by the government to curtail the taxpayers' right to seek refund for what was unduly paid.

The judgment, which would be electronic due to the rules of social isolation arising from the coronavirus pandemic, was postponed at the request of the parties.

Another extremely important issue that should have been resolved on April 30 and which was also postponed, is the definition of the limit of matter’ adjudged in the tax sphere. Basically the analysis concerns whether a subsequent decision of the Supreme Court in concentrated control of constitutionality (i.e. with general effects to all) can override a specific earlier decision that a particular taxpayer obtained in the opposite sense.

This theme is extremely relevant because it essentially deals with juridical security, which is one of the pillars of the Brazilian legal system.

Several other relevant and more specific topics are expected to be judged by the end of the year. Some of them will certainly not be heard due to the fear of analysing such important issues in a virtual environment, which might adversely affect the interaction between justices and oral statements by lawyers.

Just as important as implementing the judgments and bringing closure to these discussions, is the awareness that some issues have been developed by the justices of the Supreme Court, which given their technical and economic relevance, cannot wait too long to be included in the docket.

In September 2020, Justice Dias Toffoli leaves the Presidency of the Supreme Court and the new presiding justice will be Luiz Fux. It is expected that Justice Luiz Fux will give priority to tax matters.

In a country that already has difficulty maintaining its political and economic stability, minimal juridical security will always be welcome.


Alessandra Gomensoro
T: +55 21 3231 8222


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