Rafael Zanchettin
Lawyer at Marcos Martins Advogados
The amounts of debts received by protest notaries and subsequently passed on to creditors do not constitute taxable income, and any requirement for income tax (IRPF) on these amounts is undue.
In a recent ruling by the 3rd Panel of the Federal Regional Court of the 3rd Region, it was determined that Income Tax should not be levied on debts received by a Notary Public for payment of protested bonds, which are subsequently passed on to creditors.
The matter gained relevance after the General Coordination of Taxation of the Brazilian Federal Revenue Service (COSIT) expressed its opinion through Consultation Solution No. 94/2020, to the effect that all debt amounts passed on to creditors must be recorded as taxable income in the Notary’s cash book, constituting income from the non-salaried work of the servants of justice.
In view of COSIT’s position, the Notary Public of Bebedouro/SP filed a lawsuit requesting recognition that income tax should not be levied on the amounts of debts received by the Notary Public and passed on to creditors, since they do not imply an increase in the servicer’s assets, under penalty of distorting the concept of income.
The notary’s claim was upheld by the lower court, which dismissed the understanding contained in Conflict Solution 94/2020 of the General Coordination of Taxation of the Federal Revenue of Brazil (COSIT).
Following an appeal lodged by the Federal Government with the Federal Regional Court of the Third Region (TRF3), the decision was upheld by Judge Nery da Costa Junior, on the grounds that the amounts received by the Notary temporarily transit his assets and are made available to the creditor on the first day following receipt, and do not constitute income for the Notary.
The Court’s understanding represents an important legal precedent applicable to the interests of Notaries Public, since they will no longer have to pay amounts considered undue to the tax authorities, reducing their tax burden, or even recovering amounts already offered to taxation.
About Marcos Martins Advogados: Founded in 1983, the firm is highly regarded in the areas of Corporate, Tax, Labor and Business Law. Based on values such as commitment, ethics, integrity, transparency, responsibility and the constant specialization and improvement of its professionals, the firm positions itself as a true partner for its clients.
