On trials held on last August, the Federal Supreme Court (“STF”) judged the incidence of the INSS on maternity pay, deciding on its exemption, as well as judging constitutional the taxation of the constitutional third wages on employees vacation.

Regarding the maternity pay, the decision was that this amount would be out of the hypothesis of the incidence of the social security contribution, provided for in art. 28, paragraph 2, of Law No. 8,212/91. Thus, the STF proposed the fixing the following thesis: “The incidence of the social security contribution paid by the employer on the maternity pay is unconstitutional“.

With the aforementioned decision, employers will be able to administratively offset the amounts of social security contributions from the employer collected over the maternity pay, in relation to the last five years, with the application of the Selic rate, in addition to not being obliged to collect this contribution for the prospective period.

With regard to the constitutional third wages on employees vacation, in turn, the majority of the plenary session of the STF accepted the argument of the National Treasury, defending, in their vote, the thesis that the habituality and the remunerative character of the third of vacations legitimates its taxation.

The result represents an importante victory by the National Treasury over taxpayers, changing the understanding from the Superior Court of Justice (STJ) established in February 2016, due to the non-incidence of the INSS on these funds.

In addition, this decision will represent the formation of a greater liability for several companies that failed to collect the INSS on such amounts backed by the STJ decision.

Our team is available to assist in this and other tax law issues. Further information by e-mail: rmarques@zaslaw.com.br or zaslaw@zaslaw.com.br.