TAXATION IN BANKRUPTCIES AND OUT-OF-COURT SETTLEMENTS.
By: Afonso Rodeguer Neto – OAB / SP 60.583.
I – ARTICLE 60 OF LAW 9.430 / 96; ARTICLES 121 and 188 OF THE NATIONAL COURT; ARTICLE 241 OF THE RFB NORMATIVE INSTRUCTION NO. 1700/17 AND INCOME TAX
REGULATION, DECREE 3,000 / 99.
It has been argued that article 60 of Law 9430/96 does not comply with the definition of taxpayer of the tax obligation contained in article 121 of the National Tax Code, whereby “The taxpayer of the main obligation is the person required to pay the tax or monetary penalty. “
It is known that the Broken Mass is not considered a legal person. Therefore, it would not fit the concept of Art. 121 of the CTN. In view of that, the bankrupt masses would not be subject to taxation.
However, article 60 of Law 9430/96 determined that “entities submitted to out-of-court liquidation and bankruptcy regimes are subject to the rules on assessment of taxes and contributions of the Federal Government applicable to legal entities, with respect to transactions carried out during the period in which the procedures for realization of their assets and payment of liabilities persist.
Well, this is ordinary law. The Civil Code that defines or establishes legal entities is also ordinary law. Law 9430/96 is a special law. Special laws prevail over general ones, as it is peaceful. Because it is a special law it was not repealed by the new civil code that continued to treat legal entities in a general manner.
Law 9430/96 would then have equated bankrupt estates and companies in extrajudicial liquidation with legal entities, eliminating the obstacle of article 121 of the CTN (supplementary law).
Moreover, article 188 of the CTN (supplementary law) establishes that:
“Art. 188. Tax credits arising from triggering events occurred during the course of the bankruptcy proceedings are extracurricular. (Text provided by LCP No. 118 of 2005)”.
The National Tax Code thus admits, even if in general, that there are triggering events in the course of the bankruptcy proceedings. In fact, this is uncontroversial, not least because there are IPTU payable, income tax at source, social contributions and other taxes that are extracurricular.
Nevertheless, it is argued that there is unconstitutionality in the referred article 60 of Law 9430/96, but there is no judicial initiative in this regard.
The normative opinions CST – Coordenadoria do Sistema de Tributação (Taxation System Coordination) on this matter predate Law 9430/96. The basic basis of these former normative opinions is that the bankrupt estates are not legal entities and that there is (was) no legal equalization of the bankrupt estates to legal entities.
Certainly, these normative opinions of the Taxation System Coordination Office, originating from tax entities, would not have the same position today, in view of the advent of Law 9430/96, specifically in its article 60, not least because the position of the Federal Revenue Office is clear today in the sense of demanding compliance with ancillary obligations and payment of taxes.
Below is information on the position currently adopted by the Federal Revenue Service, as stated in its website. It is worth mentioning that the Federal Revenue adopts the provisions of article 60 of Law 9430/96, as stated in the Income Tax Regulation, Decree no. 3,000/99.
(RIR/1999, art. 146, § 2 :
Article 146. They are taxpayers of the tax and will have their profits ascertained according to this Decree (Decree-Law no. 5844 of 1943, art. 27):
I – legal entities (Chapter I);
II – individual companies (Chapter II).
§ Paragraph 1 The provisions of this article apply to all firms and companies, whether registered or not (Decree-Law No. 5844 of 1943, art. 27, paragraph 2).
§ Paragraph 2. – Entities submitted to out-of-court liquidation and bankruptcy regimes are subject to the tax assessment rules applicable to legal entities, with respect to transactions carried out during the period in which the procedures for realization of their assets and payment of liabilities persist (Law 9430 of 1996, article 60).
Add Law no. 12,973/14, article 109, as one more recent example of the requirement of taxes by the Federal Government in face of bankrupt estates and extrajudicial liquidations:
Article 109. Legal entities that have been inactive since the 2009 calendar year or that are under ordinary, judicial or out-of-court liquidation or bankruptcy regime may ascertain Income Tax and CSLL on the capital gain resulting from the sale of assets or rights, or any act that gives rise to capital gain, without applying the limits provided for in articles 15 and 16 of Law No. 9065 of June 20, 1995, provided that the proceeds of the sale are used to pay debts of any nature with the Federal Government.
I – Court of Justice – Third Chamber
Civil Appeal No. 37322/2005 / 5th Business Court of the Capital District – RJ. Rapporteur – Luiz Felipe Haddad.
Appellant – Public Prosecutor
Appeal – Block Editores S.A.’s Broken Mass
“Commercial. Tributary. Civil Procedural. Bankruptcy Mass Accountability . . . Disobedience to Decree-law 7661/45, art. 63, XXI, and also to article 60 of Law 9430/96. Corroboration of said rules by Decree 3000/1999, related to the National Tax Code” .
The judgment also states: . .
. . . “Article 60 of Law 9430/96 provides that entities subject to bankruptcy or extrajudicial liquidation are to be subject to the rules of the Federal Government that apply to legal entities in respect of transactions carried out during the period of the relevant proceeding, with a view to realization of assets and payment of liabilities. Decree 3000/1999 (Income Tax Regulations), Article 620) states the same scope…
The above case does not refer to income tax of the legal entity itself, but expresses the Court’s understanding in relation to article 60 of Law 9430/96.
II – APPEAL NO. 0127138-67.2011.8.26.0000
County – São Paulo
Agte. Plena S/A Corretora de Valores Mobiliários (bankruptcy)
Agdo. The Judgment
Vote No 21636
Rapporteur – Rui Cascaldi
In this case we have an understanding to the contrary. However, the court did not face Article 60 of Law 9430/96. At the very least, the representative of the tax entity would have to file a motion for declaration. Subsequently, a special appeal, as it is ceded, for the Federal Revenue Service’s requirement to be effectively resolved, considering that it does so based on the legal provision above.
“Bankruptcy – Decision that ordered the suspension of cash withdrawal in the bankruptcy proceedings, due to a summons from the Federal Revenue Service, pointing out the tax debt of the bankrupt estate related to income tax. -but the bankrupt estate is not to be confused with the bankrupt legal entity, being a depersonalized entity, which does not consider itself a taxpayer of the main tax obligation – Intelligence of art. 121 of CTN” …
In the above case the Court understood that there is no need to talk about a taxable event in the bankruptcy estate. However, it is verified in this judgment that there is no mention of Art. 60 of Law 9430/96. It is also verified that the aforementioned judgment is grounded on the opinions of the Federal Revenue that predate Law 9430/96. Therefore, such judgment would be mistaken in this sense or, at least, there was a denial of effectiveness of Article 60 of Law 9430/96 which, exactly, determined that the bankrupt estates and companies in extrajudicial liquidation submit to the rules of other legal entities. And if the bankrupt estates are equated to legal entities, pursuant to Article 60 of Law 9430/96, Article 121 of the CTN, as explained above, does not prevent the taxation of the triggering events occurred in the bankrupt estates.
NON-EXISTENCE OF A TAXABLE EVENT IN THE BANKRUPT ESTATE
Doctrinators argue that there is no economic or legal availability in the bankruptcy mass. That there is no way to occur the taxable event in the bankruptcy estate that would not have an increase in assets. And these arguments are respectable. It is believed that they are part of the most logical discernment of the issue.
But the situation is not peaceful and has not been resolved, especially in the view of the IRS, as explained.
And if the issue is not peaceful, we have the following:
The personal responsibility of the administrator as provided for in Article 135 of the CTN may eventually occur, for the following aspects.
Article 135 of the CTN. They are personally liable for the credits corresponding to tax obligations resulting from acts performed in excess of powers or in violation of the law, articles of association or bylaws: (emphasis added).
I – the persons referred to in the preceding article;
II – the proxies, agents and employees;
III – the directors, managers or representatives of private legal entities.
The administrator or liquidator, in case of extrajudicial liquidation, shall be liable only for the credits corresponding to the tax obligations resulting from acts performed in excess of powers or in violation of the law (Art. 135 CTN).
However, article 134, V of the CTN should also be added, expressly mentioning the person of the liquidator as responsible.
“In cases where it is impossible for the taxpayer to demand compliance with the main obligation, they are jointly liable with the taxpayer in the acts in which they intervene or for the omissions for which they are responsible”:
I – …
V – the liquidator and the commissioner, for the taxes due on the bankrupt estate or the receivership;
Here comes the question. The Administrator ceases to apply art. 60 of law 9.430/96. He also ceases to apply Article 124 of the former bankruptcy “law,” Decree 7661/45, when bankruptcy is still governed by the revoked law, which establishes that the taxes generated after the bankruptcy are charges of the estate, and therefore do not submit to bankruptcy. This is also set out in Article 84 of the new law. Article 188 of CTN (Supplementary Law) is no longer applicable.
In this case, the trustee may eventually find that he committed acts in violation of the law. And if the estate does not have resources to pay the tax later, there is the risk that the administrator will be liable with his private assets, due to having committed an act against the law, if understood, under the terms of Article 135 of the CTN, transcribed above and also Article 134 mentioned above.
Reporting on the National Tax Code, commented on and annotated/coordinated by Volney Zamenhof de Oliveira Silva; 3rd ed., p. 392/393, comments on article 134 of the CTN, in which he mentions the Tax Law Course of Hugo de Brito Machado, 17th Ed. São Paulo: Malheiros Editores, p.121, and other legal scholars, there are two basic requirements for this type of liability to be recognized:
“a) that the taxpayer cannot be required to comply with the obligation; b) that third parties (responsible) have intervened in the acts that gave rise to the obligation or unduly omitted themselves”.
If there are no resources for the collection of taxes, at the appropriate time, the default will not generate any liability to the administrator. The default, by itself, does not generate this responsibility, as already defined by doctrine and jurisprudence. However, if there is payment of creditors with resources that would be for payment of taxes this may generate liability to the administrator.
Therefore, it seems safer for the trustee or liquidator to proceed with the appropriate entries or measures as to the taxes whose triggering events occur during the bankruptcy or receivership proceedings, until such controversies are resolved. Or, on the other hand, to take an action that is legally applicable and not simply to omit. There are certain administrative actions that may be taken:
In case of non-payment of taxes, the alternatives, among eventual others, would be:
a) filing of a Declaratory Action for Non-existence of Tax Relationship between the Bankrupt Estate and the Federal Government to effectively declare the non-existence of the taxes of the Bankrupt Estate, with the possibility of filing in court to suspend the tax credit, if applicable;
b) submit a consultation to the tax authorities, by the institute of the consultation, if possible to the Bankrupt Estate, which depends on the assessment of each case. For consistency, it should be possible to consult under the same terms of Article 60 of Law 9430/96, although the position of the public treasury is already known, as stated on the federal revenue website;
c) not to take any of the previous actions and, if the tax authorities file an infraction, to promote the competent administrative defense or, without administrative defense, or after it, a lawsuit annulling the tax debt. In the latter case, the trustee continues under personal risk, since it may be understood that there was an omission and, at the next moment, there may be no more resources to pay the taxes.