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Brazilian courts have shown greater support for taxpayers in disputes over the taxation of ICMS (Tax on the Circulation of Goods and Services) fiscal incentives. A survey conducted by the law firm Mattos Filho found that, between January and October 2024, companies prevailed in 58% of the 614 first- and second-instance rulings related to the new Subsidy Law (No. 14,789/2023).

Click here and read the article on Valor Econômico International.

The federal government won the majority of its tax cases in Brazil’s higher courts in 2024, prevailing in 18 out of 23 significant disputes and avoiding potential losses of billions of reais. In just three cases, the combined impact was R$86.1 billion. However, the Supreme Court is still set to hear 27 additional cases, leaving the National Treasury exposed to a fiscal risk of at least R$698.7 billion.

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At least 32 critical tax cases against the federal government, states, and municipalities, with a combined estimated impact of R$712 billion on public finances, are currently pending before Brazil’s Supreme Court. Three of these cases are scheduled for this month, including one highly anticipated by taxpayers, known as the “thesis of the century.” It concerns the exclusion of the Services Tax (ISS) from the social taxes PIS and Cofins tax base.
The analysis was conducted by Machado Associados law firm and includes cases mentioned in the Fiscal Risks Annex of the 2025 Budgetary Guidelines Bill (LDO). Although the potential financial impact remains substantial, experts note that the most significant cases have already been adjudicated by the higher courts in recent years. For instance, at the Superior Court of Justice, all items listed in the LDO have been reviewed on their merits, leading to an estimated R$80.4 billion being reclassified as having a “remote risk” of impact.

Click here and read the article on Valor Econômico Internacional.