Supreme Court concludes judgment on validity of setting SAT contribution

On December 14, 2022, a judgment was published that dismissed the motion for clarification filed within Extraordinary Appeal No. 677.725, General Repercussion Subject 504, of the Federal Supreme Court.

It is important to recall that, in a virtual trial finalized on November 10, 2021, the opinion of the court, in contrast to that of taxpayers, validated the Accident Prevention Factor (“FAP”) methodology by means of a decree, establishing the argument that “The Accident Prevention Factor, provided for in article 10 of Law No. 10,666/2003, as regulated by Decree No. 3,048/99 (RPS), complies with the principle of tax legality (article 150, I, CRFB/88).”

Following the unanimous decision, the reporting justice Luiz Fux affirms that the FAP does not integrate the concept of tax rate, but is rather only a multiplier, “external to the legal tax relationship.” Therefore, analyzing it by means of a secondary normative act would not violate the principle of legality. In addition, as recorded in the summary of the judgment, “the FAP is sufficiently structured as a rule, since its standards, parameters, and control markers have been established, which leads to a regulated calculation methodology and compliance with the principle of tax legality (article 150, I, CRFB/88).” Based on these considerations, the taxpayer’s appeal was denied.

In view of the above decision, a motion for clarification was filed for due consideration of the claim that a supplementary law is required to regulate the FAP, as well as the non-retroactivity of the law, which means it would not be applicable for taxable events occurring prior to 2009.

In the decision published on December 14, the reporting Justice, Luiz Fux, followed the unanimous decision of the Supreme Court to dismiss the motion for clarification. As such, he overruled the omissions pointed out in the motion, arguing that there is no violation of the principle of non-retroactivity of taxes, since Decree No. 6957/09 duly established the methodology for determining the FAP. Fux also considered that a supplementary law to regulate the FAP is not required, since it is merely a multiplier, external to the legal tax relationship.

With the consolidation of this opinion, which will impact all Brazilian lawsuits involving such matter, taxpayers will not succeed in challenging the legality/unconstitutionality of the multiplier to be considered in the Occupational Accident Insurance (SAT) rate assigned. Therefore, taxpayers can only question any possible mistakes in the calculation of the FAP, which requires a term extension for production of evidence.

Demarest’s Social Security and Tax team are available to provide any further clarifications that may be necessary.