Last Wednesday, 06/12/2024, the Federal Supreme Court (“STF”) determined that the incidence of social security contributions on the constitutional third of vacations will only occur after the date of publication of the minutes of the judgment on the merits of the discussion, which occurred on 09/15/2020, except for contributions already paid and not challenged in court until said date, which will not be returned by the Federal Union.

In practice, this means that the Union will only be able to collect the tax from that date onwards. Furthermore, it will only return taxes that were unduly paid in the past to taxpayers who challenged the payments through legal action.

In brief history, we recall that in August 2020, the STF in the judgment of Theme No. 985 established the thesis that “the incidence of social contributions on the amount paid as a third of the constitutional vacation is legitimate”. In view of this decision, there was opposition to the Declaration of Embargoes by the taxpayers who requested, in summary, the modulation of the effects of the decision.

It should be noted that the previous understanding of the Superior Court of Justice (“STJ”) was that the social security contribution would not apply to the vacation bonus.

Given the change in understanding, the STF saw the need to modulate the effects of the judgment, aiming at non-retroactivity. Despite the modulation, the contributions already paid and not questioned in court until September 15, 2020 were left out of the modulation and therefore the amounts will not be returned by the Union. 

Our team is available to provide any clarification on this topic.