A company located in Rio de Janeiro obtained a favorable decision from the Federal Court of the 2nd Region to have a new trial at the Administrative Council for Tax Appeals (CARF), for losing a dispute with the Federal Revenue Service for the so-called quality vote.

The decision is the first known based on Law No. 13,988/20, which ended the practice of the so-called quality vote by the Federal Revenue Service and determines the taxpayer’s victory in the event of a tie, determining return of the case to CARF, despite the fact that the request for annulment of the judgment was submitted by the taxpayer before the enactment of that law.

The case is of a food company that imports inputs to manufacture a kind of dehydrated meat, later exported, which discusses tax assessments due to allegedly not having met the requirements to enjoy, between 2004 and 2007, the benefits of suspension in observation of the drawback regime.

The company managed to overturn the assessment in the 1st Panel of the 4th Chamber of the 3rd Section of CARF, but ended up losing in the Superior Chamber, through the so-called quality vote, which partially restored the tax assessment. After the defeat, the company decided to question the unfavorable decision in the judicial court, with its arguments gaining strength with the edition of Article 28 of Law No. 13,988 / 2020, which determined that in the event of a tie in the vote, the final decision will be in favor of the taxpayer.

In analyzing the case, the trial court found that the regulatory rules that provide for the casting vote cannot override the prescription contained in article 112 of the National Tax Code (CTN), according to which the tax law responsible for the definition of infractions shall be interpreted favorably to the accused, in case of doubt. Such an understanding would have become even more evident from the entry into force of Law No. 13,988/2020.

This is an important precedent favorable to the taxpayer, demonstrating the feasibility of questioning, before the Judiciary, decisions of CARF based on the quality vote.

Our team is available to assist in this and other tax law issues. For further information please contact our Tax Team by the following e-mails: rmarques@zaslaw.com.br or zaslaw@zaslaw.com.br