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[BUSINESS] · Brazil · 8 sources

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Brazil Supreme Court rules Funrural tax unconstitutional before 2018

The Brazilian Supreme Federal Court (STF) has ruled that the collection of the Funrural contribution—a tax used to fund social security for rural workers—is unconstitutional for sales made by individual rural employers prior to January 1, 2018.

In a 6-5 decision, the court determined that the legislation governing the tax (Law 10.256/2001) was deficient, lacking clear definitions for the tax's triggering event, calculation base, and applicable rates. The ruling, stemming from a legal challenge by the Brazilian Association of Slaughterhouses (Abrafrigo), invalidates the tax for operations conducted up to December 31, 2017. However, the court upheld the legality of the contribution for all sales occurring from January 1, 2018, following the implementation of Law 13.606/2018.

The decision provides a legal basis for producers, cooperatives, and buyers, such as meatpacking plants, to contest previous tax collections. The court has yet to define the specific scope regarding existing debts, installment plans, and previously paid amounts.

Entities

Associação Brasileira de Frigoríficos · Dias Toffoli · Funrural · Supreme Federal Court

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