Published on December 30, 2022, the Decree 11,322/22 reducedPis and Cofins rates levied on financial revenues from companies subject to the non-cumulative regime. The rates went from 0.65% and 4% to 0.33% and 2%, respectively.

According to the Decree, the reduction of the rates would take effect from January 1, 2023. However, on January 2,  Decree 11,374/23 revoked Decree 11.322/22, reestablishing the Pis and Cofins rates on financial revenues to their original values.

Although Decree 11.374/23 provides for its validity on the date of its publication, there are good legal grounds to discuss the immediate increase of the rates, as Decree 11.322/22 came into force and produced effects in the legal system, even if for a short period of one day.

In legal terms, the repeal of Decree 11.322/22 resulted in the increase of the social contributions rates in question, resulting in the applicability of the constitutional principle of nonagesimal anteriority (section150, item III, "c", combined with section 195, § 6, both of the Federal Constitution), which prevents the collection of taxes before 90 days of the rule that increased them:

Art. 150. Without prejudice to other guarantees of the taxpayer, it is not allowed to the Federal Union, the States, the Federal District and the Municipalities: (...)

III - collect taxes: (...)

(c) before ninety days since the date on which the law that established or increased the tax has been published, in accordance with item(b);

Art. 195. Social security will be financed by the society, directly and indirectly, in accordance with the law, through resources from the Federal Union, the States, the Federal District and the Municipalities, and the following social contributions: (...)

  • 6 - The social contributions related in this section may only be required after ninety days after the date of publication of the law that have established or modified, not being applicable the provisions of section 150, III, "b".

The recent jurisprudence of the Supreme Court (STF) establishes compliance with the nonagesimal anteriority principle even in cases in which the modifications  in the Pis and Cofins rates have been promoted by means of rules other than ordinary law, as decided in Direct Action of Unconstitutionality 5,277 (ADI 5,277):

Direct action of unconstitutionality. Tax Law. Principle of tax legality. Need for analysis of each tax species and each specific case. Contribution to PIS/PASEP and Cofins. Paragraphs 8 to 11 of section5 of Law No. 9,718/98, included by Law No. 11,727/08. Sale of alcohol, including for fuel purposes. Fixing, by the Executive Branch, coefficients to reduce the rates of these contributions, which may be changed more or less in relation to the class of producers, products or their use. Presence of extrafiscal function to be developed. Nonagesimal anteriority. Need for observance.

1. Compliance with the principle of tax legality is verified according to each tax species and in the light of each specific case, and there is certainly no broad and unrestricted freedom for the legislator to dialogue with the regulation regarding aspects of the main rule of tax incidence.

2. In order for the law to authorize the Executive Branch to reduce and reinstate the rates of contributions to PIS/Pasep and Cofins, it is essential that the maximum value of these matters and the conditions to be observed are prescribed by law in the strict sense, as well as there is in such taxes extrafiscal function to be developed by the authorized regulation.

3. The contested provisions deal with the possibility of the Executive Branch to fix coefficients to reduce the rates of the contribution to the PIS/PASEP and Cofins on the gross revenue recorded in the sale of alcohol, including, for fuel purposes, rates provided for in the caput and in § 4 of section 5 of Law No. 9,718/98, wording given by Law No. 11,727/08,  which may be changed, to more or less, in relation to the class of producers, products or their use. The law established the limits and conditions to be observed by the Executive Branch. Moreover, the on-screen measurement is closely connected to the optimization of the extrafiscal function present in this matters. It is also verified that the dialogue between the tax law and the regulation takes place in terms of subordination, development and complementarity.

4. The increase of the contribution to Pis/Pasep or Cofins authorized by Decree is subject to the nonagesimal priority provided for in section195, § 6, of the CF/88, corresponding to section150, III, c.

5. Direct action of unconstitutionality judged partiallyfavorable, giving interpretation according to the Federal Constitution to Paragraphs 8 and 9 of section5 of Law No. 9,718/98, included by Law No. 11,727/08, and establishing that the rules issued by the Executive Branch based on these paragraphs must observe the nonagesimal priority provided for in section150, III, c, of the constitutional text.[1]

Therefore, the current jurisprudence of the Supreme Court indicates that it is possible to propose a judicial measure to ensure the applicability  of the reduced rates of PIS and Cofins on financial revenues until April 1st, 2023, in order to respect the principle of nonagesimal anteriority provided for in the Federal Constitution.

Machado Meyer's Tax Department is available to clarify doubts and discussions on the subject.

 

[1] ADI 5277/DF, rel. ministro Dias Toffoli, first section, tried on December 11, 2020, DJe 03/25/2021. Our griffins