In a recent judgment, the Supreme Court reaffirmed its prevailing jurisprudence that “Member States and the Federal District may legislate on monetary correction indexes and arrears interest rates on their tax credits, provided that the percentages do not exceed those set by the Federal Government for the same purpose” in the judgment, in general repercussion, of the Extraordinary Appeal with Interlocutory Appeal (ARE) No. 1216078.
The Extraordinary Appeal was filed by the State of São Paulo aiming at the res judicata rendered by the Court of the same State that authorized the taxpayer to pay the ICMS tax debt without the incidence of arrears interest set by State Law 13,918/2009.
The rapporteur of the case, Minister Dias Toffoli, president of the Supreme Court, acknowledged the general repercussion of the issue, considering the financial impact on the state coffers, and confirmed the Court’s already consolidated understanding that the correction indexes and rates of arrears interest charged by states on their tax credits cannot exceed those fixed for Union tax credits. Most ministers accompanied the rapporteurship, and Minister Marco Aurélio was defeated.
The fixation of this thesis, in the view of tax lawyer Bruno Zaroni, partner of Zaroni Advogados, contributes greatly to the end of the discussion in the State Courts regarding the abuse and/or illegality of the correction indexes and default interest applied by state entities. “Putting an end on this issue will really bring taxpayers greater legal certainty in assessing their tax contingencies”, says the lawyer.