Brazil tax landscape: Social security revisions and STF compensation rulings

Companies in Brazil may be overpaying social security contributions due to incorrect classification of their National Classification of Economic Activities (CNAE) and risk levels. A technical review of these classifications can identify tax credits spanning the previous 60 months. Such revisions are becoming increasingly urgent due to the upcoming implementation of the Brazilian Tax Reform.

Separately, the Brazilian Supreme Federal Court (STF) is reviewing a significant legal debate regarding tax compensation. The case examines whether taxpayers can use writ of mandamus to declare the right to compensate for undue taxes paid in the five years prior to filing. Currently, the STF is divided into three main legal interpretations: one rejecting the motion for compensation based on existing precedents, one allowing compensation for the five years prior to the filing, and a third allowing compensation only for payments made after the filing.