Angelo Francisco Barrionuevo Ambrizzi
Lawyer at Marcos Martins Advogados
Recently, a number of São Paulo taxpayers received summonses from the São Paulo State Treasury Department (“Sefaz”) to provide clarification on donations sent to the Brazilian Federal Revenue Service via the Individual Income Tax Return (IRPF).
According to Sefaz, these donations were apparently not accompanied by payment of the Causa Mortis or Donation Transfer Tax (ITCMD).
As you know, the Federal Constitution defines that the State is responsible for instituting and collecting ITCMD, and the tax is levied in the following situations: inheritances, legacies and donations. For the state of São Paulo, the rate is 4%.
In view of this, some questions are important:
1 – How did the State of São Paulo obtain the information contained in the Individual Income Tax Return – IRPF?
2 – Is the use of this information legal and constitutional?
The information is obtained and cross-checked as follows: the Brazilian Federal Revenue Service provides the information on donations contained in the Individual Income Tax Return (IRPF) to the State Revenue Service, which in turn analyzes whether there was ITCMD to be paid on each donation transaction provided.
Once an alleged irregularity has been identified, the State Tax Authorities ask taxpayers to clarify the reason for the lack of payment or to justify why the ITCMD has not been paid.
This procedure was set up by means of an agreement signed by the federal and state agencies, which has led to the possibility of cross-checking information in order to identify donations that have not been duly paid the ITCMD.
Having answered the first question, let’s answer the second.
With regard to the validity of the use of information from the State Tax Authorities, it is believed that there is an incompatibility with the legal system, especially with regard to the constitutional guarantee of tax secrecy.
In other words, a taxpayer’s information declared to the Federal Revenue Service is protected by the constitutional guarantee of tax secrecy and this federal agency cannot provide this information to third parties, unless there is a court decision authorizing this.
There is already a decision by the Plenary of the Federal Supreme Court (STF) handed down in December 2010 in the judgment of Extraordinary Appeal RE No. 389.808, ruling out the possibility of the Federal Tax Authorities breaking bank secrecy on their own, and such access to information can only occur if there is judicial authorization.
When protecting bank secrecy, the Supreme Court invoked the inviolability and protection of private life, in which the individual is guaranteed protection of private information relating to their business, thus preventing third parties from knowing this information.
This assertion leads us to conclude that, although the STF’s judgment dealt with the issue of banking secrecy, constitutional protection clearly applies to tax secrecy, because if data involving an individual’s financial life is protected, for more or the same reason, it also applies to tax secrecy.
The big question is whether the taxpayer’s data made available to the Federal Tax Authorities can be appropriated by other spheres of competence, that is, by the State or Municipal Tax Authorities.
Mr. Justice Ricardo Lewandowski of the Federal Supreme Court (STF) recently decided a similar matter when he ruled that the breach of tax secrecy by the competent body, i.e. the Superior Electoral Court (TSE), was constitutional when requested by the Federal Revenue Office. In this sense, it would be unconstitutional if it were requested by an incompetent body (the Public Prosecutor’s Office), as in the case under analysis.
The decision clearly states that the procedure was straightforward, because it was carried out by court order (Superior Electoral Court). See the content of the STF’s decision:
RE 744036 / SC – SANTA CATARINA
EXTRAORDINARY APPEAL
Rapporteur: Justice RICARDO LEWANDOWSKI
Publication: DJe-081 DIVULG 29/04/2014 PUBLIC 30/04/2014
RECTE.(S) : MINISTÉRIO PÚBLICO ELEITORAL
DEFENDANT(S) : J J M A A
[…]
2. This Court has already ruled that it is essential to have judicial authorization to breach tax secrecy, which would not be provided by means of an agreement signed between the Electoral Court and the Federal Revenue Office. Interlocutory appeal not granted.”
In the RE, based on art. 102, III, a, of the Constitution, an offense against article 5, X, of the same Charter was alleged, summarizing the issue as follows: “The disputed issue is limited to defining whether the Superior Electoral Court correctly applied art. 5, item X, of the Federal Constitution, when it ruled that evidence consisting of data relating to a taxpayer’s income was unlawful – due to violation of tax secrecy – because it had been requested directly by the Superior Electoral Court from the Federal Revenue Service, through an agreement signed for mutual cooperation. (…)
We must not forget the path of this information. It is obtained by the Electoral Court itself, which has the power to break the tax secrecy of campaign donors, and passed on by the Electoral Court to the Electoral Public Prosecutor’s Office.
The Electoral Public Prosecutor’s Office, therefore, does not request information from the Internal Revenue Service, nor does it breach the tax secrecy of campaign donors.
It is those who have the powers, recognized by this Supreme Court, to do so, namely the Judiciary itself.” (pages 180-196, emphasis in original).
The appeal does not deserve to be accepted. It is not necessary to analyze the body of evidence in the case file in order to verify, in this case, whether the confidential data used by the Public Prosecutor’s Office – even before the breach of confidentiality authorized by the electoral judge – was obtained directly by the Public Prosecutor’s Office from the Federal Revenue Service of Brazil or whether it was part of the information made available on electronic media by the Superior Electoral Court, based on Joint Ordinance SRF/TSE No. 74, a circumstance that makes the appeal unviable under the terms of Precedent 279 of the STF.
It should also be clarified that, contrary to what the appellant claims, the matter discussed in these proceedings is different from that of ARE 05/11/2014, which had its general repercussion recognized by this Court, and deals with the deadline for filing a representation for donations in excess of the legal limit.
That said, I dismiss the appeal (CPC, art. 557, caput). Publish. Brasília, April 25, 2014. Minister RICARDO
LEWANDOWSKI – Rapporteur –
(STF – RE: 744036 SC, Rapporteur: Minister Ricardo Lewandowski, Date of Judgment: 04/25/2014, Date of Publication: DJe-081 DIVULG 04/29/2014 PUBLIC 04/30/2014).
Having made these considerations, it is clear that the Supreme Court’s understanding is that the breach of tax secrecy is permitted as long as it has prior judicial authorization.
The Minister of the Superior Electoral Court – TSE, Mr. Gilson Dipp, issued a decision along the same lines, as follows:
DECISION
This is an interlocutory appeal filed by Kennedy de Souza Trindade against a decision that rejected a special appeal based on article 121, § 4, I and II, of the Federal Constitution and article 276, I, a and b, of the Electoral Code. The judgment of the Regional Electoral Court of Goiás reads as follows, verbis (fl. 145):
ELECTORAL REPRESENTATION BASED ON ORIGINAL DIRPF. DONATION BY AN INDIVIDUAL ABOVE THE LEGAL LIMIT. INVALIDITY OF THE RECTIFYING DIRPF. PRELIMINARIES DISMISSED.
1) Rejection of the preliminaries of unlawfulness of the evidence (tax information requested by the MPE), in accordance with the governing legislation (CF/88, art. 5, LVI and art. 129, VI; LC 75, art. 8, II; TSE Resolution 22.250/2006, art. 14, § 4, CPC, art. 332).
2) Configuration of the infraction of art. 23, § 1, I of Law 9.504/97 and absence of cause for exclusion of liability.
3) Recognition of the probative effects of the original DIRPF.
4) Removal, within the scope of Electoral Law, of the effects of the rectifying DIRPF, presented by the individual donor to the tax administration after the donation, the presentation of the representation and the judicial notification for the respective defense, unaccompanied by documentary proof of the legal acts that would allegedly support the rectification.
5) Setting the monetary penalty of §3 of art. 23 of Law 9.504/97 at the legal minimum, given the absence of legal and judicial circumstances for an increase.
The aggravated decision is based on the absence of conditions for admissibility of the special appeal. Firstly, because there would be no question of the case being null and void due to the illegality of the evidence submitted to the case file by the Electoral Public Prosecutor’s Office without judicial authorization, since the alleged defect was not argued during the investigative phase, nor does it constitute the only evidence used by the Regional Court. Two, since analyzing the occurrence of a violation of the principle of objective good faith would require a re-examination of the evidence, which is unfeasible in this special instance.
The aggravating party alleges violation of articles 5, X and LVI, and 129, VIII, of the
Federal Constitution; article 8, II, of Complementary Law no. 73/93; article 198, § 1, II, of Law no. 5.172/66 (CTN); article 14, § 4, of Res. 22.250/2006; and article 332 of Law no. 5. 869/73 (CPC), on the grounds that the breach of tax secrecy by order of the Public Prosecutor’s Office without prior authorization from the Judiciary would be unlawful, resulting in the nullity of all the evidence gathered in the case, in compliance with the Fruit of the Poisoned Tree Theory; articles 113, 167 and 168, sole paragraph, of the Civil Code and article 333, I, of the Code of Civil Procedure, since the regional ruling, when analyzing the rectification of his Income Tax Return, would have presumed, without sufficient evidence, the practice of a simulated legal business.
[…]
Decide.
In view of the reasons for the interlocutory appeal, I grant it and immediately proceed to analyze the special appeal, since it has been duly counter-appealed (article 36, paragraph 4, of the Internal Rules of the Superior Electoral Court).
The appellant is right.
In fact, evidence obtained by breaking tax secrecy without judicial authorization is considered illicit.
I would highlight, among others, a precedent from this Court’s peaceful jurisprudence on the subject, authored by the eminent Justice MARCELO RIBEIRO (AgR-REspe nº 7875839-60/DF), judged at the session of February 3, 2011:
INTERLOCUTORY APPEAL. SPECIAL APPEAL. DONATION OF CAMPAIGN FUNDS. BREACH OF TAX SECRECY. AGREEMENT SIGNED BETWEEN THE TSE AND THE FEDERAL REVENUE OFFICE. PRESERVATION OF THE RIGHT TO PRIVACY. UNASSAILABLE GROUNDS. PRECEDENT NO. 182/STJ. DISMISSED.
1. Evidence obtained by breaking the donor’s tax secrecy without judicial authorization is unlawful.
without judicial authorization. Precedent: AgR-REspe nº 82.404/RJ, rel. Min. Arnaldo Versiani, Session of 4.11.2010.
[…]
4. Even on the basis of Joint Ordinance SRF/TSE No. 74/2006, the right to privacy, including tax and bank secrecy, provided for in art. 5, X, of the Federal Constitution, must be preserved by observing the procedure described above.
5. Interlocutory appeal dismissed. (emphasis added)
[…]
Brasília, February 14, 2012.
MINISTER GILSON DIPP
REPORTER
(TSE – AG nº 8984, Rapporteur: Min. Gilson Dipp, Date of Judgment: 14/02/2012, Date of Publication: Diário de justiça eletrônico, Date: 23/02/2012, Page 16 – 17)
The São Paulo tax authorities’ procedure of requesting and using information that taxpayers are legally obliged to provide to the Federal Revenue Service is a brutal affront to the constitutional protection of tax secrecy.
Taxpayers who receive any summons related to this issue cannot remain inert; they must oppose this harsh affront to constitutional guarantees through the means provided by the judiciary.
