Brazilian courts rule on administrative sanctions and tax penalties

The Superior Court of Justice (STJ) and the Administrative Council of Tax Appeals (CARF) have issued significant rulings regarding the application of laws and administrative sanctions in Brazil.

In a ruling by the STJ, the court determined that administrative sanctions under ANTT Resolution 5.847/2019 do not retroactively apply to conduct occurring under previous regulations, even if the new rule is more beneficial. The court upheld the principle of 'tempus regit actum', stating that more beneficial norms only apply retroactively if there is specific and express legal authorization.

Separately, CARF applied the principle of benign retroactivity to a tax case. The council reduced a qualified fine for income tax evasion from 150% to 100% for a taxpayer. This decision was based on the National Tax Code, which allows for the retroactive application of less severe penalties to past taxable events.