Angelo Ambrizzi
Lawyer at Marcos Martins Advogados
The Attorney General’s Office of the National Treasury (PGFN) has instituted the Administrative Procedure for Recognition of Liability (PARR), the purpose of which is to hold the partners of irregularly closed legal entities liable to pay the tax debts of these companies.
In general terms, the Attorney General’s Office cannot use an Ordinance to hold the partners of a company liable, making it clear that this is once again a procedure that seeks to undermine taxpayers’ guarantees.
According to the new procedure, provided for in PGFN Ordinance No. 948 of September 25, 2017, the partner of the company considered irregular will be notified by letter with acknowledgment of receipt to file an administrative challenge within 15 (fifteen) days through the PGFN Virtual Service Center (e-CAC PGFN), available on the PGFN website.
The decision on the taxpayer’s challenge must be handed down within 30 (thirty) days, extendable for the same period. If the decision is unfavorable, there can be an appeal without suspensive effect, which means that the decision to hold the taxpayer liable will remain in effect until the appeal is heard.
If the challenge or appeal is rejected, the individual taxpayer will be held liable for the company’s debts, and all the negative consequences of formal default before the tax authorities will ensue (protests, registration with CADIN, inability to issue a CND, etc.).
In this context, what this brief article aims to address are the numerous illegalities in the procedure, from the perspective of the constitution of the tax credit, its registration as an active debt, as well as the principles of legal certainty, due process, adversarial proceedings and a broad defense.
Initially, it should be noted that the administrative act of tax assessment is provided for in article 142 of the CTN, which reads as follows:
Art. 142. It is the exclusive responsibility of the administrative authority to establish the tax credit by means of a tax assessment, understood as the administrative procedure aimed at verifying the occurrence of the triggering event of the corresponding obligation, determining the taxable amount, calculating the amount of the tax due, identifying the taxpayer and, where appropriate, proposing the application of the applicable penalty.
It can be seen that in the tax assessment procedure, in addition to verifying the occurrence of the event giving rise to the obligation, determining the taxable amount and calculating the amount due, the administrative authority must identify the person liable for the obligation.
In taxes subject to assessment by homologation, this assessment procedure is carried out by the taxpayer himself, and may or may not be homologated by the tax authority.
The identification of the person liable for the tax obligation, therefore, is an intrinsic element of the constitution of the tax credit.
The registration as an active debt, in turn, is an administrative act to control the legality of the tax credit and must reflect the data of the tax assessment that has been duly constituted and not paid.
Thus, once the tax debt has been definitively constituted, it is the responsibility of the National Treasury Attorney’s Office to draw up the appropriate term of registration of the debt as an active debt, extracting from it the Active Debt Certificate, the executive title that will support the judicial execution of the tax debt.
For this reason, it is not permissible to make changes to the Certificate of Active Debt that alter the elements of the tax assessment, such as calculating the amount due, determining the taxable amount, identifying the taxpayer, etc.
This is the understanding of the best doctrine:
When there are errors in the assessment itself or in the debt registration, requiring a change in the legal basis or in the taxable person, a new assessment of the tax with the calculation base measured by other criteria, imputation of payment prior to the registration, etc., it will be essential for the assessment itself to be reviewed, if it is still feasible in view of the statute of limitations, giving the taxpayer the right to challenge it, and for the registration to be reviewed, so that it will not be possible to correct the defect only in the debt certificate. The certificate is a mirror of the registration which, in turn, reproduces the terms of the entry. It is not possible to correct defects in the entry and/or registration on the certificate. In these cases, it will not be possible to simply replace the CDA. (Leandro Paulsen; René Bergmann Ávila; Ingrid Schroder Sliwka. Tax Procedural Law: tax administrative proceedings and tax enforcement in the light of doctrine and case law. 5. ed. Porto Alegre: Livraria do Advogado, 2009 p. 205).
The same is true of the Superior Court of Justice, which issued Precedent No. 392 on the replacement of the Certificate of Active Debt: The Public Treasury can replace the certificate of active debt (CDA) until the judgment on the motion to stay the enforcement is handed down, when it is a matter of correcting a material or formal error, with the modification of the subject of the enforcement being prohibited.
Doctrine and case law, therefore, even admit the modification of the Certificate of Active Debt to correct a material or formal error. This does not mean, however, that the Attorney General’s Office can alter the elements of the entry itself.
The executive title must accurately represent the data from the administrative process from which it comes, and the public treasury cannot revise or alter it by amending the certificate.
Changing the subject of the tax obligation modifies the assessment itself, which cannot be done by the PGFN.
Admitting a procedure of this nature as valid would give the PGFN the power to change any other element of the assessment, such as the calculation basis, rate and applicable legislation, which is obviously absurd.
The procedure also violates the principle of due process of law, adversarial proceedings and ample defense, because although there is provision for the submission of a challenge, this is judged by the National Treasury Prosecutor in charge of the decentralized unit responsible for the entry in the active debt.
It is clear that the creditor himself will not be impartial when judging the taxpayer’s challenge, given the revenue interest at stake.
Notwithstanding all this, it is certain that the use of this procedure even hampers the partner’s legal defense, since once his name appears on the active debt certificate, it is presumed that his tax liability is characterized and legitimate, with the taxpayer bearing the burden of proof that there has been no violation of the law.
Finally, it should be mentioned that the procedure in question violates the principle of legal certainty, as there is still no consensus in the case law as to which partner should be liable for the debts of the closed company or even the end of the limitation period for the partner’s liability, issues that are the subject of Themes No. 444, 962 and 981 in the system of Repetitive Appeals.
It is not difficult to foresee that in the application of the PARR all partners will be held liable by the PGFN, regardless of their management power on the dates of the taxable events or on the date of the irregular dissolution, and even if the statute of limitations for redirecting the tax execution has already passed.
The text of the ordinance itself (art. 7, §§ 1 and 2) shows that the PGFN is not concerned with the peculiarities of each debt, since liability will have an effect on all the company’s debts registered as active debt and even those that may be registered in the future, leaving it up to the taxpayer to demonstrate, on a reasoned basis, any factual or legal peculiarities that disprove their liability.
It can therefore be seen that the PARR is riddled with numerous illegalities and is likely to cause serious damage to taxpayers included as liable for tax debts in the Federal Government’s active debt control systems.
In this context, it will be up to the taxpayer to seek judicial recognition of the illegality of the procedure so as not to suffer all the negative consequences of tax default.
