The Common Interest and Tax Liability of Economic Groups according to the Jurisprudence and the Norit Report COSIT n. 04/2018 of the Federal Revenue of Brazil

Abstract

The tax liability is understood by the change of passive subject of the tributary obligation that was originally occupied by another person, called taxpayer, so that the legal relationship is integrated by the third party and the tax authority. Underpinning the issue, the Brazilian tax law provides for certain situations in which there will be this change, aiming to support the public collection of taxes when the impossibility of enforcing the taxpayer’s obligation occurs. Given the need for effective application of tax liability, the theory of disregard of legal personality veil was developed through flexible equity autonomy of the partner and the company, which was previously absolute. However, legislation and case law also considered and limited which hypotheses such a disregard will be valid. Moreover, with the advent of globalization and the development of the economy, meetings of companies that have joined efforts to achieve good market placement and higher profits have become commonplace. However, the business conglomerates experience an unsafe scenario, once it began to be solidarity co-responsible for tax debts to other group companies without express legal determination. This paper aims to analyze the current scenario of tax liability, which hypotheses in which liability could be extended to third parties based on the “common interest” set forth in art. 124 of the Brazilian National Tax Code, and, in particular, to examine the possibility of redirecting the debt to the economic group, due to a debt of one of its companies, considering the understanding adopted by the Internal Revenue Service in its internal acts, as well as administrative and judicial jurisprudence.