OECD supports resumption of government casting vote in CARF

According to the OECD, a group that brings together the economies most committed to the modernization of tax systems, few countries allow the involvement of the private sector in the administrative judgment of tax appeals. Linked to the Federal Revenue Service, Carf judges, at the administrative level, questions from taxpayers about tax collections.

“We have so far identified three jurisdictions with varying degrees of involvement of private sector representatives in administrative appeals in tax matters, although this occurrence is rare in international practice. However, in these cases, private sector representatives do not seem to have the same decisive role in the administrative appeal as they do in Brazil”, highlighted the letter, signed by Grace Perez-Navarro, director of the OECD Tax Policy Center.

According to the organization, the letter was written after a meeting between the Minister of Finance, Fernando Haddad, and Perez-Navarro on March 6. Sent on March 31 to the Minister of Finance, the document was only released this Wednesday (26).

From 2020, to Lei 13.988 grants an advantage to the taxpayer, usually large companies, in judgments ending in a tie in CARF. At the beginning of the year, the government edited a provisional measure to return the tie-breaking vote to the government, but the issue faces resistance in Congress and the Judiciary.

“A return to this process (casting vote) would mitigate the possible negative consequences of the model established in 2020 that were discussed above. This will not have a negative impact on taxpayers’ rights because they will still retain their recourse to independent judicial review, where they will be able to challenge, on a legal basis, the tax assessment as well as the taxes claimed and penalties applied,” the letter stressed.

In February, the Ministry of Finance and the Brazilian Bar Association (OAB) closed a deal to close part of the judicial questions. The Federal Court of Accounts (TCU) also recommended the resumption of the old model.

After the closing of the agreement with the OAB, Haddad said that the resumption of the casting vote would yield BRL 50 billion to the government’s cash.