The Federal Supreme Court (“STF”), in the judgment of Direct Constitutionality Action No. 84, maintained the suspension of decisions that reduced the PIS and COFINS rates on financial income. The matter began to be judged on March 27, 2023, but had been suspended by a request for review by Minister Alexandre de Moraes.

The legal discussion on the reduction of rates occurred due to the publication of Decree 11,322/2022, which occurred on December 31, 2022, and reduced the PIS and COFINS rates on financial income by half (from 0.65% to 0.33% for PIS and from 4% to 2% for COFINS).

The Decree came into force immediately, taking effect on January 1, 2023. However, on the first day of 2023, Decree No. 11,374/2023 was issued, which reestablished the previous rates, although, in theory, the principle of nonagesimal precedence should have been applied, so that the rule that increases tax could only come into force ninety days after publication.

For Rapporteur Justice Ricardo Lewandowski, the reestablishment of the rates could not be subject to the principle of prior notice, since the rates that had already been paid previously were merely maintained. In addition, the PIS and COFINS on financial revenues have monthly billing as their triggering event, so that on the date of the triggering event, Decree No. 11,374/2023 would already be applicable. Given that Decree No. 11,322/2022, having been revoked on the same date it was supposed to take effect, would not have come into force, it could not have been reestablished.

All ministers voted with the rapporteur, with the exception of Minister Rosa Weber, who voted for the decisions that reduced the rates to be maintained, and Minister André Mendonça, who requested that only decisions that applied the decree that reestablished the rates be made before the ninety-day period after publication.