The Additional Cost of Tax Compliance

Penalties for Non-compliance with Ancillary Obligations

Abstract

This paper seeks to demonstrate that, in addition to the uncertainties arising from the tax legislation itself, there is considerable insecurity when dealing with the applicable penalties for non-compliance with ancillary obligations, particularly concerning the interpretation and application of the fines provided by Presidential Provisional Decree No. 2,158/2001 and Law No. 8,218/1991. For such purposes, the paper will focus on the practical example of the PIS and Cofins Tax Return (EFD-Contributions). It is concluded that the numerous law amendments and changes in administrative interpretations have led to tax assessments that violate the principles of legality, legal certainty, proportionality, and non-confiscation in the application of fines as defined by the Federal Supreme Court (STF). Therefore, the authors adopted the hypothetical-deductive method through a bibliographic, legislative, and jurisprudential survey.