On Monday (March 24th), the Brazilian Federal Revenue Service (RFB – Receita Federal do Brasil) announced the termination of tax benefits from the Emergency Program for the Resumption of the Events Sector (PERSE) established by Law No. 14.148/2021. This decision arises from the non-renewal of the benefit by the National Congress and the enactment of Law No. 14.592/2023, which substantially changed the scheme by reducing the range of activities benefited and setting a global limit on tax exemptions. As a result, federal taxes (IRPJ, CSLL, PIS, and Cofins) will resume collection starting April 2024.

It is important to remember that PERSE was created as a measure to address the impacts of the Covid-19 pandemic, ensuring that companies in the events and tourism sector had a zero tax rate on these tributes for 60 months. However, with the revocation of the benefit, the Federal Revenue has already indicated that businesses must start paying these federal taxes in full from the next period, covering all CNPJs (National Registry of Legal Entities) enrolled in the program, regardless of the date of enrollment.

Notably, the abrupt repeal of PERSE, even before the originally intended period was over, raises concerns regarding predictability, legal certainty, contributive capacity, and even the principle of anteriority. Many companies structured their financial planning based on the full term of the benefit and favorable judicial decisions that ensured its continuation.

In this context, it is important to mention that in the ruling of RE 817.338/DF, overseen by Minister Dias Toffoli, the Brazilian Supreme Federal Court (STF) recognized that the principle of the protection of trust does not prevent the termination of tax benefits but requires that such termination be foreseeable and reasonable, respecting legal certainty and avoiding surprises to taxpayers. Moreover, the STF unanimously decided that the repeal of tax benefits granted for a certain period and under conditions must respect the constitutional principles of tax anteriority — both annual anteriority (Article 150, III, “b,” of the Brazilian Constitution) and ninety-day anteriority (Article 150, III, “c”). This understanding was confirmed in the judgment of RE No. 564.225 brought by the State of Pará against a decision that annulled an ICMS (Goods and Services Tax) charge for March and April 2013 due to the revocation of a state tax benefit.

Given this scenario, it is likely that the premature termination of the tax benefit will be legally challenged by taxpayers, especially those intending to discuss the constitutionality of the measure and safeguard the effects guaranteed by the program.

Finally, the developments within Congress and the Executive branch regarding this matter should also be closely monitored, considering the potential economic and legal impacts of the measure.

Notes:

• IRPJ: Corporate Income Tax.
• CSLL: Social Contribution on Net Profit.
• PIS: Social Integration Program.
• Cofins: Contribution for Social Security Financing.
• CNPJ: National Registry of Legal Entities in Brazil.
• ICMS: Tax on Circulation of Goods and Services, a state-level tax in Brazil.