The Federal Supreme Court (“STF”) will decide through virtual plenary to be held between December 9th and 16th, whether the Social Contribution to the Rural Worker Assistance Fund (“Funrural”) due by Agroindustries and Producers rural areas is constitutional. Two cases will be analyzed – Extraordinary Appeal No. 611.601/RS (Topic No. 281 of General Repercussion) and Extraordinary Appeal No. 700.922/RS (Topic No. 651 of General Repercussion).

Funrural is unconstitutional in taxpayer’s interpretation because (i) there is double taxation with COFINS, since both contributions are levied on the same economic base (gross revenue) without constitutional authorization (which occurs with PIS, for example); (ii) there is a violation of the principle of isonomy, as a more onerous tax treatment was instituted for Agroindustries; and (iii) the Article 195, I, of the Federal Constitution, before Constitutional Amendment No. 42/2003, prohibit the institution of a substitute contribution to the payroll. It is important to say that the Attorney General's Office (“PGR”) issued a favorable opinion to the taxpayers.

Considering the recent precedents of the STF in relation to the modulation of the effects of its decisions, we recommend filing a judicial measure until December 8th, to protect their right to possibly reimburse the amount unduly paid for the last 5 years.

By Henrique Erbolato