STF determines modulated effects of the decision on one-third premium

On August 31, 2020, the justices of the Brazilian Federal Supreme Court (“STF”) established that “the levy of social contribution on the amount paid as one-third premium – Subject 985/STF – is legitimate”. In view of this position, which reversed the case law consolidated by the Brazilian Superior Court of Justice (“STJ”) years ago, a motion for clarification seeking to modulate the effects of the decision, given the high economic impact that companies could face if the option of collecting the sums that have not been paid in the past is approved, so that the new position can only be applied in the future.

On June 12, 2024, this motion for clarification was finally analyzed, on which occasion the justices determined that the social security contribution be levied on the one-third premium only as of the publication of the judgment’s minutes on the merits – which took place on September 15, 2020 –, except for the contributions already paid and not challenged in Court until this date. The minutes were released as follows:

Decision: (Separate Voting of the Virtual Plenary) The Court, by a majority, partially granted the motion for clarification, with ex nunc effect in relation to the judgment on the merits, as of the publication of the judgment’s minutes, except for contributions already paid and not challenged in Court up to that date – which will not be returned by the Federal Government. All of which took place under the vote of Justice Luís Roberto Barroso (president and author of the judgment under discussion), against the dissenting opinion of Justice Marco Aurélio (rapporteur) and Justice Ricardo Lewandowski – who voted in the session in which there was a motion for separate voting –, as well as of Justice Gilmar Mendes and Justice Alexandre de Moraes. Justice André Mendonça, Justice Cristiano Zanin and Justice Flávio Dino, successors to Justice Marco Aurélio, Justice Ricardo Lewandowski and Justice Rosa Weber – who had also voted in the session in which there was a motion for separate voting – did not vote, in line with Justice Luís Roberto Barroso. Plenary, 12.6.2024.”

Therefore, the payment of social security contribution on the one-third premium became mandatory as of September 15, 2020, and companies can compensate or be reimbursed for the amounts unduly paid until this date, provided that these payments have been challenged in Court.

Demarest’s Social Security team remains available to provide any clarifications that may be necessary.