Tax benefits for agricultural pesticides
Posted: Sun Feb 02, 2025 4:24 am
The Superior Court of Justice (STJ) is currently considering a Direct Action of Unconstitutionality, registered under number 5,553, which challenges the validity of tax benefits applied to pesticides. This action was filed by the Socialism and Liberty Party (PSOL) and specifically questions Agreement 100/1997, signed by the National Council for Tax Policy (Confaz). This agreement establishes a 60% reduction in the ICMS tax base for interstate transactions involving certain types of pesticides listed in the Table of Incidence of Tax on Industrialized Products (TIPI).
So far, the voting results show a trend of 5 votes to 2 in favor of dismissing the action, which would maintain the special tax regime for pesticides. During the trial, Justice Edson Fachin, the rapporteur for the case, ruled that the tax benefits are unconstitutional. According to Fachin, the jamaica telegram data contested rules violate constitutional principles related to social and labor rights, as well as the rights to health and the maintenance of an ecologically balanced environment.
Given the scenario imposed by the tax reform, careful and proactive planning is imperative for families, which must go beyond simple tax optimization and aim at a transfer of assets that meets their desires and needs, respecting the new tax rules. The changes promoted by the reform highlight the need for an anticipated approach to succession planning, emphasizing the importance of making informed and strategically thought-out decisions.
On the other hand, Justice Gilmar Mendes presented a dissenting opinion, arguing that granting tax benefits for pesticides does not contradict the Constitution. Mendes argues that the possible harmfulness of a product does not eliminate its essentiality, drawing a parallel with medicines, which, despite their side effects, are recognized as important and continue to enjoy favorable tax treatment. This view was seconded by the votes of Justices Cristiano Zanin, Alexandre de Moraes, Dias Toffoli and André Mendonça.
So far, the voting results show a trend of 5 votes to 2 in favor of dismissing the action, which would maintain the special tax regime for pesticides. During the trial, Justice Edson Fachin, the rapporteur for the case, ruled that the tax benefits are unconstitutional. According to Fachin, the jamaica telegram data contested rules violate constitutional principles related to social and labor rights, as well as the rights to health and the maintenance of an ecologically balanced environment.
Given the scenario imposed by the tax reform, careful and proactive planning is imperative for families, which must go beyond simple tax optimization and aim at a transfer of assets that meets their desires and needs, respecting the new tax rules. The changes promoted by the reform highlight the need for an anticipated approach to succession planning, emphasizing the importance of making informed and strategically thought-out decisions.
On the other hand, Justice Gilmar Mendes presented a dissenting opinion, arguing that granting tax benefits for pesticides does not contradict the Constitution. Mendes argues that the possible harmfulness of a product does not eliminate its essentiality, drawing a parallel with medicines, which, despite their side effects, are recognized as important and continue to enjoy favorable tax treatment. This view was seconded by the votes of Justices Cristiano Zanin, Alexandre de Moraes, Dias Toffoli and André Mendonça.