With the main objective of combating delinquent debtors and strengthening the collection of outstanding debt within the federal tax administration, the Ministry of Economy presented to the Chamber of Deputies, in March, Bill No. 1,646/19. Some aspects of the text deserve special attention, such as the extrajudicial procedures applicable to delinquent debtors, defined in the Bill as “taxpayers whose tax behavior is characterized by substantial and repeated tax delinquency.”
The first point to be highlighted concerns the characterization of “substantial and repeated tax delinquency,” defined in paragraph 1 of article 2 as the existence of debts in the name of the debtor or related individuals or legal entities, whether or not recorded as outstanding debt and in the amount of R$ 15 million or more, in an irregular situation[1] for a period of one year or more. The wording of this article may give rise to misinterpretation, since the text does not identify the nature of the legal relationship between the debtor and the individual and legal entity that may justify the calculation of their private debts in order to characterize their repeated default.
The only interpretation compatible with the Federal Constitution and the national tax system, in our view, is that which restricts the possibility of considering the debt of third parties in the calculation of the debtor's debt to the effective existence of a legal scenario for joint and several liability or tax liability of these third parties. In fact, the National Tax Code strictly defines the circumstances in which persons other than the taxpayers themselves may be held liable for tax debts, precisely in articles 124 and 128 to 135.[2]
Any other interpretation will violate the autonomy of the legal entity with respect to its partners, shareholders, or related companies and will be unconstitutional. This is because the Federal Constitution reserves for complementary law, in this case, the National Tax Code, the competence to establish provisions of law governing tax obligations (article 146). An ordinary law cannot therefore create a scenario for presumed legal liability.
The Bill also provides that the bodies of the federal tax administration may institute administrative proceedings against delinquent debtors in order to impose administrative restrictions which, if applied, consist of (i) cancellation of tax registration - CNPJ or CPF; and (ii) prohibition on enjoyment of any tax benefits for a period of ten years.
To initiate the procedure, the Bill is very clear in requiring not only the characterization of the taxpayer as a delinquent debtor but also the presence of evidence of the commission of an unlawful act (willful, fraudulent, or feigned). This is another aspect that deserves attention: it is not the characterization of debtors as delinquent that authorizes the establishment and subsequent application of administrative restrictions, but the existence of effectively inappropriate behavior by them. Incidentally, this is the tonic of the Bill, expressed in its explanatory memorandum: the objective is to reach taxpayers who perform unlawful acts, not those who have only tax debts.
Although the opening of the procedure requires only the presence of indicia, the effective application of restrictions requires proof of the performance of the unlawful acts described in the rule.[3] Despite this provision, it is of doubtful constitutionality to apply such severe administrative sanctions that may prevent individuals or legal entities from exercising their professional or corporate activity without prior judicial control. This seems to use to be clear violation of due process of law. There is no way to consider, in satisfactory compliance with the right to a full defense and adversarial proceeding, a procedure, especially when it involves drastic limitation of rights, in which the judge is not vested with jurisdictional powers and is not impartial precisely because he is an interested party.
Moreover, the measure seems to us disproportionate to the purposes intended. If the idea is to create mechanisms that make receipt of the taxable amount more effective, it is not via the cancellation of the tax identification (CPF and CNPJ) of individuals and legal entities that this objective will be achieved. Quite to the contrary: the creation of restrictions on the exercise of corporate and economic activity prevents the production of wealth and, consequently, the payment of taxes.
It is quite true that alleged exercise of economic activities cannot lend itself to covering up the commission of unlawful acts, which must be stopped. For this, however, the Public Treasury already has very effective mechanisms in the current legal system, such as the tax motion for preliminary injunctive relief, which the Bill itself, in other provisions, seeks to strengthen.[4]
It would be better if the procedure to establish administrative restrictions constituted a preparatory mechanism for the collection of evidence to justify the future filing of a judicial measure against the debtor, even if it is intended to cancel a tax identification (CPF or CNPJ), if deviation of purpose in the exercise of the economic activity is proven in court, used as a subterfuge for the commission of tax offenses.
The Bill also allows the Office of the Attorney General of the National Treasury (PGFN) to offer differentiated conditions for the settlement of debts recorded as outstanding debt and classified by the tax authority as irrecoverable or difficult to recover. In these cases, provided that there is no evidence of a loss of equity, discounts of up to 50% of the consolidated amount of the debt may be granted. Discounts may be applied on fines and interest, for payment in cash or payment within up to 60 installments. Discounts shall not apply to (i) fines that, in the opening of an assessment, are intended to punish tax evasion, fraud, and collusion, as provided for in Law No. 4,502/64;[5] (ii) payable taxes related to the Simples Nacional or FGTS; (iii) payable taxes registered as outstanding debt for less than ten years.
The PGFN is responsible for regulating the setting of discounts, including based on the recoverability of the payable taxes and the term for the repayment thereof.
The proposal here seems reasonable and effectively intended to receive the tax debt. It contemplates the possibility of entering into extrajudicial settlements between the Public Treasury and taxpayers, in the midst of modern and effective alternative means for dispute resolution.
The main criticism concerns the minimum time for which the debt must be enrolled as outstanding debt (ten years) before it may be submitted to an extra-procedural legal settlement. If the objective is to resolve the tax dispute, and if the tax authority is already free to classify the payable tax as unrecoverable or difficult to recover, as well as to set discount percentages based on the degree of recoverability and the time to receive the amounts, this time period may make actual satisfaction of the tax debt unfeasible, even if partially.
It is hoped that during the democratic debate that should permeate the legislative process, these and other aspects will be the subject of greater reflection, so that the collection and receipt of tax debts meet the public’s wishes without violating taxpayers' fundamental rights.
[1] Debts the enforceability of which is not suspended.
[2] Participation in the taxable event, succession, link with the taxable event, responsibility of managers for acts committed in violation of the law or the statutes or with excess of powers, among other situations expressly provided for.
[3] Article 2 of the Bill allows the establishment of an administrative proceeding to establish and apply administrative restrictions in the event that there are indicia that: (i) the legal entity has been established for the commission of structured tax fraud, including for the benefit of third parties; (ii) the legal entity is organized by intermediaries other than the true partners or shareholders or the real owner, in the case of a sole proprietorship; (iii) the legal entity participates in an organization formed for the purpose of not paying taxes or circumventing tax debt collection mechanisms; and (iv) the individual, principal or co-responsible debtor, deliberately conceals assets, revenue, or rights for the purpose of not collecting taxes or circumventing tax debt collection mechanisms.
[4]The purpose of this article is not the part of the Bill dedicated to changes in Law No. 8,397/92, which regulates the tax motion for preliminary injunctive relief. In any case, it is important to clarify that this instrument, as currently regulated, already confers sufficient (perhaps excessive protection for payable taxes. Some of the proposed new rules are clearly unconstitutional, as they once again confuse the person of the alleged debtor with third parties, creating rules of liability for mere non-payment of the tax.
[5] Articles 71, 72, and 73.
