OFFSET PROCEDURE IN BRAZILIAN TAX LAW, PROPORTIONALITY AND LEGAL CERTAINTY

Abstract

In this article, the Brazilian tax offset procedure is analyzed, firstly, from the standpoint of the legal regime provided by Brazilian National Tax Code. The author revisits some concepts that have been supported so far by Brazilian Tax Literature about the tax offset procedure. In this context, the author contends that the power to regulate the tax offset procedure has limits, especially when restrictions and penalties are imposed in order to avoid the abuse of the right to offset taxes against credits. The limits that shall be observed while carrying on the right to regulate tax offset procedure consist essentially on the respect of principle of proportionality. Regarding the limitations and penalties applicable to the offset procedure of federal taxes, one can easily realize that most of them does not comply with the principle of proportionality, subjecting the taxpayer to the risk of losing part of his credits and also to penalties applicable based on a prima facie presumption of abuse (i.e., regardless of his good faith). Consequently, the lack of compliance with the principle of proportionality puts constitutional rights and principles at stake as the right to property, the specific right that gave rise to the credits that can be used by the taxpayer against the Federal Tax Administration and also the principle of legal certainty.