The Regional Federal Court of the 4th Region (TRF4) in Brazil opened a new precedent for taxpayers by removing the incidence of the Corporate Income Tax (Imposto de Renda da Pessoa Jurídica – IRPJ) and the Social Contribution on Net Profit (Contribuição Social sobre o Lucro Líquido – CSLL) on the drawback regime (Case No. 5029307-92.2020.4.04.7200).

The decision was made by the 2nd Panel of the TRF4 and equated the tax incentive to the ICMS (Tax on Circulation of Goods and Services) benefit, extending the scope of the thesis established in Repetitive Topic No. 1182, which was already outlined by the Superior Court of Justice (Supremo Tribunal de Justiça – STJ) in Brazil.

It is important to highlight that the drawback is a fiscal disbursement mechanism used in Brazil, allowing for the suspension or exemption of taxes on imported inputs, as long as they are destined for the production of goods for export. Its objective is to make Brazilian products more competitive in the international market by reducing the final cost of exported goods. However, despite its relevance to foreign trade, the regime had never been directly addressed in previous STJ decisions regarding tax benefits in Brazil.

The milestone for this new interpretation was STJ Topic 1.182, judged in 2023, which authorized the exclusion of ICMS tax incentives from the calculation base of IRPJ and CSLL. Although the ruling did not explicitly mention the drawback, the TRF4 understood that the reasoning could be extended to the regime, broadening the scope of the thesis and benefiting new cases.

The rapporteur of the case, Federal Judge Eduardo Vandré Oliveira, emphasized that the STJ precedent could apply to any type of tax benefit in Brazil, as long as legal conditions, such as the formation of profit reserves, are observed. Thus, the decision, in addition to declaring the right of the taxpayer to exclude various ICMS tax benefits from deemed credits (in this specific case exemptions, reductions of the calculation base, rate reductions, deferral, and drawback-suspension) from the calculation bases of IRPJ and CSLL with effects until December 31, 2023, allowed for the recovery of overpaid amounts in the last five years, with effects limited until December 31, 2023, when the new Subsidies Law (Law No. 14.789/2023) came into effect in Brazil.

In this sense, the TRF4 precedent can be seen as an advancement in interpreting Repetitive Topic 1.182, thus allowing for greater flexibility in applying the STJ’s understanding for exporting companies in Brazil, as it now allows the possibility of claiming the exclusion of drawback benefits from the calculation base of IRPJ and CSLL, in addition to recovering overpaid amounts until December 2023.

Furthermore, it is important to reiterate that this understanding reinforces the logic of tax disbursement for exports in Brazil by equating the drawback to other ICMS tax benefits, even without express provision in the STJ ruling. Thus, the central point lies in the interpretation of the requirements of Article 30 of Law No. 12.973/2014, which, if met, legitimizes the exclusion of these amounts from the calculation base of IRPJ and CSLL in Brazil.