Brazil’s Supreme Court begins trial regarding CIDE outbound remittances and may declare partial unconstitutionality

On May 29, 2025, Brazil’s Federal Supreme Court (STF) began the trial of General Repercussion Matter No. 914, which addresses the constitutionality of the Economic Domain Intervention Contribution (CIDE) levied on outbound remittances.

Justice Luiz Fux, the reporting Justice, issued an opinion declaring the partial unconstitutionality of Article 2, paragraph 2 of Law No. 10.168/2000, emphasizing that the levy of CIDE is not triggered when the contract does not involve the development of technology. Accordingly, he proposed the following general repercussion theses:

• The contribution for intervention in the economic domain (CIDE), intended to fund the University-Enterprise Interaction Program to Support Innovation, established and regulated by Law No. 10.168/2000, as amended by Laws No. 10.332/2001 and 11.452/2007, is constitutional when levied on outbound financial remittances as compensation under contracts involving the exploitation of technology, with or without its transfer;
• Remittances made for purposes other than compensation for the exploitation of foreign technology—such as payments for copyrights, including software exploitation without technology transfer, and services that do not involve the exploitation of technology and are not covered by contracts within the scope of the tax’s incidence—do not fall within the material scope of the contribution.

It was also proposed that the effects of the decision be modulated so that the partial declaration of unconstitutionality takes effect from the date of publication of the judgment minutes, except in cases involving judicial actions and administrative proceedings pending resolution by that date, as well as tax credits not yet assessed.

Subsequently, Justice Flávio Dino dissented, voting in favor of the constitutionality of levying CIDE even when the respective contract does not involve the development of technology. The trial was suspended and is scheduled to resume next Wednesday (June 4).

Should Justice Fux’s position prevail, the interpretation upheld by the Federal Revenue Service—regarding the levy of CIDE on all outbound payments for royalties and services not involving technology transfer—would be set aside.

The modulation of effects does not prejudice taxpayers who have filed lawsuits by the date established in Justice Fux’s opinion. Therefore, considering the possibility that his vote may be followed by a majority of the Justices, both on the merits and on the criteria for modulation, it becomes important to assess the filing of legal actions to challenge the matter—ideally before the trial resumes—for taxpayers seeking to secure the right to recover CIDE amounts paid over the past five years.

For more information, please contact Mattos Filho’s Tax practice area.