By Marcelo Blecher

In a recent judgment, the 1st Ordinary Panel of the 2nd Chamber of the 1st Section of CARF, unanimously, adopted the understanding that the exemption that benefits companies established in the area of operation of the Superintendence of Development of the Northeast (“Sudene”) applies to Corporate Income Tax (“IRPJ”), but does not extend to the Social Contribution on Net Income (“CSLL”), due to the lack of legal provision.

In the case at hand, the counselors analyzed IRPJ and CSLL assessments relating to the 4 (four) quarters of the 2004 calendar year, plus an official fine of 75% and SELIC, due to discrepancies between the declared values.

According to the vote of the Rapporteur, Counselor Luis Henrique Marotti Toselli, it would be proven and demonstrated that the profit from the exploration of the calendar year of 2004 corresponds to the Real Profit itself, which guarantees the company's right in relation to the exemption from the IRPJ charged.

According to the Rapporteur, the IRPJ exemption applies when the taxpayer, in addition to presenting a specific Ordinance issued by Sudene, demonstrates that the profit from the exploration corresponds, in the assessed period, to the actual profit itself.

Regarding the incidence of CSLL, the Rapporteur adopted the understanding that the STF has already decided that the immunity provided for in art. 149 of the Constitution, introduced by Constitutional Amendment 33/2001, does not cover social contributions, since there is an ontological distinction between the concepts of profit and revenue.

Finally, it is important to highlight that on that same occasion the counselors recognized the non-incidence of IRPJ and CSLL on revenues from sales destined for the Manaus Free Trade Zone (“ZFM”), given that in the case at hand the taxpayer has a final court decision recognizing the right not to offer such amounts for taxation.

The Mazzucco & Mello Advogados tax team is available to provide any clarification on this topic.