Pedro Rezek Andery
Lawyer at Marcos Martins Advogados
It is not uncommon for punitive tax fines to have the same value as the tax debt or even exceed it, causing the taxpayer’s tax liability to double in a single assessment.
Because of this, there have been several legal disputes aimed at reducing the percentage of punitive fines imposed by the federal, state or municipal tax authorities.
As a result of the debates, the Federal Supreme Court has already settled on the understanding that the tax fine cannot exceed the amount of the tax, in other words, it has been capped at 100%.
Even in the face of this limitation imposed by the Supreme Court, taxpayers continue to go to court and, recently, the 3rd Public Finance Court of the State of São Paulo reduced a fine from 90% to 20% of the value of the tax.
The judge in charge of the case held that the principle of proportionality (or reasonableness) must be observed, so that the fine is applied taking into account the socio-economic reality of the country, and can have no other function than to repress the tax infringement.
It is of fundamental importance that taxpayers go to court to challenge the fines imposed by the tax authorities (federal, state or municipal), as they often turn out to be abusive, illegal and unconstitutional.
Marcos Martins Advogados puts its tax team at your disposal to answer any questions you may have.
