The Superior Chamber of Tax Appeals, the last instance of the Board of Administrative Fiscal Resources (Carf), made a decision of great relevance to taxpayers, but must be analyzed with prudence.

The 1st Panel of the Superior Chamber acknowledged the possibility of deducting fines of a non -tax nature of the legal entity's income tax basis - IRPJ (Judgment No. 9101-006.652, published at the end of September 2023). /P>

The case involves a company based in Bahia that deduced fines imposed by the State Environmental Institute. The IRS disagreed and filed the company, claiming that the fines did not represent expenses necessary for the driving of business and, therefore, could not be deducted from the calculation base.

Members of the Superior Chamber, by five votes to three, rejected the inspection arguments, and concluded that the fines in question regarded the requirements for deductibility, (article 41, §5, of Law No. 8.981/95) . The decision also emphasizes that companies face diverse and unpredictable risks in their operations, including penalties, thus justifying the need to consider these expenses as an integral part of business activities.

This decision gains importance due to the fact that it was made by the last instance of Carf and its potential to serve as precedent in similar cases. However, it is important to note that the IRS currently maintains the position that non -tax fines are not deductible, which implies a risk of assessment if the deduction is performed.

Eduardo Rosa Franco

Head of the Tax Team