Enacted in 2023, Law No. 14,689 reinstated the tie-breaking vote (voto de qualidade) at Brazil’s Administrative Council of Tax Appeals (Carf), resulting in significant changes that Mattos Filho closely monitored. Granted to the president of the court in the event of a tie among the judges, the tie-breaking vote had previously been abolished in 2020. Now that it has been reinstated, the tie-breaking vote is also applicable to different cases heard at the court.
The most notable change stemming from this development concerns the waving of fines and late fees for taxpayers who express their intent to pay outstanding tax debts stemming from an unfavorable tie-breaking vote within 90 days. Payments can be made in up to twelve installments, utilizing tax losses, negative calculation bases and court-ordered payments.
The system for tax fines has also undergone significant changes, with the fine for serious offenses reduced to 100% – except in cases of recidivism, where the percentage has been increased to 150%.
“To put it simply, this vote resolves potential deadlocks within the panel of judges at the court. The president of the panel breaks the deadlock by submitting a second vote. With the new legislation, if a tie is resolved via this vote and it goes against the taxpayer, they stand to enjoy certain benefits that were not previously available. Non-payment fines are canceled, and if the taxpayer makes the payment within 90 days of the decision, late fees are also waived. The remaining amount – the principal – can be paid in up to twelve installments”
“Carf plays a fundamental role in Brazil‘s tax system and is comprised of highly qualified experts. Many issues brought before Carf are resolved there, and other courts often make reference to the court‘s decisions”
