Minister Cristiano Zanin's preliminary monocratic ruling in the Supreme Court (ADI 7633), which suspended Law 14,784/2023, impacts the assessment of the CPRB in April 2024.
UPDATE 20/05/2024
At the end of 17/05/2024 (Friday), Minister Zanin suspended the effects of the injunction for 60 days, after consulting the Senate https://www12.senado.leg.br/noticias/materias/2024/05/17/apos-manifestacao-do-senado-zanin-mantem-desoneracao-da-folha-por-60-dias and so the CPRB is once again available to the opting companies just in time for the payment of the social security contribution to be paid in May for the month of April. If by the deadline (17/07/2024) the Congress has not yet approved and the government sanctioned the (PL 1,847/2024), the CPRB will be overthrown again.
UPDATE 09/05/2024 The Government signed an agreement with the Legislature to maintain the Payroll Exemption (CPRB) until 2028 and for this reason it requires the STF to withstand the effects of the previously granted injunction, with an urgent request not to interfere with the calculation of the CPRB to be declared and paid on May 20. We must await the STF's decision on the issue.
Companies on Alert! The preliminary ruling was based on two main arguments:
Violation of art. 113 of the ADCT : Law 14,784/2023 failed to comply with the provisions of art. 113 of the Transitional Constitutional Provisions Act (ADCT), which requires the submission of an estimate of the budgetary and financial impact for laws that create or amend mandatory expenses or revenue waivers.Risk of fiscal mismatch: The maintenance of the law in force could generate a fiscal imbalance of billion-dollar proportions, according to Minister Zanin's assessment. To avoid this risk, the injunction was granted to reduce the possibility of irreversible tax damages. What has changed? A Payroll exemption (CPRB in April) is suspended as of April 25, 2024, but the Internal Revenue Service understands that the decision has retroactive effect as of April 1, 2024, thus employers' social security contribution (INSS-Patronal) must be checked in full on the payroll and declared so on e-Social.
Stay tuned! The preliminary ruling is provisional and even if it is confirmed by the Plenary of the Supreme Court, it can still be changed when the action is final.
The new understanding of the Brazilian Federal Revenue Service (RFB) is that the CPRB generates monthly income and not in the receipt of each revenue, despite the contribution levied on revenue and the legislation establishing a generative factor on revenue collection (SC COSIT 46/2016). In this case, they argue that all events in April/2024 are affected by the suspension, without considering that it is impossible for companies to go back in time and readjust their prices retroactively to accommodate an absolutely unpredictable tax profile between April 1 and April 25.
Companies can Seek your rights in court if you want to keep the CPRB in April and thus make the payment of the INSS-Employers in court, facilitating your recovery if the STF's final understanding is due to the validity of the law, or the application of the possible nullity, of the law that extended the CPRB, as of another date.
Our team is at your disposal to assist in determining the CPRB and analyzing the best alternatives for your company.
Remember: The information above is a summary of the main changes and is not a substitute for consulting your company's legal advisors. We will try to keep you updated on the latest news and official guidance on the subject. If you have any questions, please contact our tax partner. Luiz Carlos Benner Sources about CPRB in April: BRAZIL. Supreme Federal Court. Suspension of Law 14,784/2023, which extended the payroll exemption of municipalities and various productive sectors until 2027. Brasília, DF, April 25, 2024 at 19:41 p.m. Available in: https://portal.stf.jus.br/noticias/verNoticiaDetalhe.asp?idConteudo=534157&ori=1 . Accessed on: 03 May 2024. BRAZIL. Supreme Federal Court. Plenary. PRECAUTIONARY MEASURE IN THE DIRECT ACTION OF UNCONSTITUTIONALITY 7,633 FEDERAL DISTRICT Rapporteur: Minister CRISTIANO ZANIN. Publication Date: 26 Apr. 2024. Available in: https://portal.stf.jus.br/processos/downloadPeca.asp?id=15366562948&ext=.pdf . Accessed on: 03 May 2024. BRAZIL. Ministry of Economy. Brazilian Federal Revenue Service. Internal Revenue Service clarifies Minister Cristiano Zanin's decision regarding the exemption from payroll in municipalities and various productive sectors. Brasília, DF, May 1, 2024. Available in: https://www.gov.br/receitafederal/pt-br/assuntos/noticias/2024/maio/receita-federal-esclarece-decisao-do-ministro-cristiano-zanin-sobre-a-desoneracao-da-folha-de-pagamento-de-municipios-e-setores-produtivos#:~:text=O%20ministro%20Cristiano%20Zanin%2C%20do,diversos%20setores%20produtivos%20at%C3%A9%202027 . Accessed on: 03 May 2024 BRAZIL. Brazilian Federal Revenue Service. COSIT Consultation Solution No. 46/2016. Brasília, DF, April 14, 2016. Available in: http://normas.receita.fazenda.gov.br/sijut2consulta/link.action?idAto=73723 . Accessed on: 03 May 2024 Material prepared by: Luiz Carlos Benner — luiz.benner@taticca.com.br Faimon Coutinho — faimon@taticca.com.br We love Salinas — amoai@taticca.com.br
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