CARF changes and can increase federal government revenue

2023-09-27 19:23:29

On September 21st, with publication in the Official Gazette of the Union, the federal government sanctioned Law 14,689 with vetoes, reestablishing the tie-breaking vote in favor of the government in the votes of CARF – Administrative Council of Tax Appeals.

With the new law, the government sought an alternative that might increase its revenue, as according to the Ministry of Finance, the resumption of the quality vote should avoid an annual loss of R$59 billion for the Union. Previously, with Law 13,988 2020 in force, taxpayers had the advantage in votes that ended in a tie.

“In addition to the casting vote and alleging contradiction to the public interest and unconstitutionality, a total of 14 topics included in PL – Bill 2,384/2023 by senators and deputies were vetoed by the government, part of them providing for the reduction or forgiveness of debts owed by taxpayers and charged by the Federal Revenue”, explains Angel Ardanaz, lawyer at Ardanaz Law Firm and University Professor in the disciplines of Business Law and Tax Law.

In reducing fines, measures to encourage tax compliance were vetoed, such as reducing, by at least one third, the value of official fines applied by the Revenue and reducing late payment fines by at least 50%.

The provision that reduced the value of ex officio fines by one third in cases of excusable error by the taxpayer who expresses the intention to comply with the tax obligation, divergence in the interpretation of legislation and repeated practices adopted by the administration or by the market segment in question was also vetoed. that the taxpayer is included.

Finally, PL 2,384/2023 provided for a reduction in fines for taxpayers who adopted measures to remedy actions or omissions during the course of the inspection, which was also vetoed.

Regarding debt forgiveness, an article was vetoed according to which an official fine might be forgiven according to the taxpayer’s compliance history, as according to the government the generic expression “compliance history” delimits its scope.

The other veto was the article that revoked the possibility of increasing the fine in cases of embarrassment to inspection, when the taxpayer does not respond to a subpoena to provide information.

Inside CARF – Administrative Council for Tax Appeals

O CARF emerged in May 2009, from Law 11,941, with the unification of the three Taxpayer Councils that then existed. It is a collegiate body, formed by representatives of the State and society, with the task of judging disputes in tax and customs matters in the second administrative instance.

“Taxpayer representatives are appointed by national Economic Confederations. Candidates for Councilors are nominated through a triple list, with the requirement of training, knowledge and experience in tax law and federal and customs taxes”, says Ardanaz.

The selection of candidates is carried out by the Councilor Selection Committee and the nomination is endorsed by designation of the Minister of Finance for the term.

“CARF assesses and judges taxpayers’ non-compliance with tax and customs requirements issued by the Tax Administration. The body’s jurisprudence, the result of repeated decisions on the same matter, has relevant weight in reducing litigation”, concludes Ardanaz.

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