Brazil: Precedent for Calculation of Debt Balance for “Refis in Crisis”

One of Brazil`s debt relief programs is called “Refis in Crisis” (Refis = Recuperacao Fiscal) as is aimed at companies that want to pay their tax debt in installments. The calculation of the actual debt balance has now become the topic of a precedent court decision.

Until now, the calculation has been carried out (balance plus interest) and afterwards the company has received certain debt reliefs under specific conditions. Now, the First Committee of the Highest Court (STJ) has decided that debt relief needs to be implemented before calculating the interest.

This is connected to when debt relief is granted, namely, if a taxpayer decides to pay his debt in full and right away rather than in installments. In that case, the base for late payment interest is missing, argues Minister Regina Helena Costa who also reports on the case.



Although the case has not been judged before the Highest Court itself, this is an important precedent for all taxpayers because the decision could impact all other tax debt relief programs (such as PERT or other programs based on Law No. 11.941/2009)

However, the issue needs to be judged by the first section of the STJ because the STJ`s second class has already interpreted the Refis-calculation in 2015 contrary to the taxpayer`s interest.