In an interview with Valor Econômico, our partner Ana Cláudia Utumi commented on the Federal Supreme Court (STF) decision that upheld the monthly limit imposed by the federal government on the offsetting of tax credits.

The unanimous ruling confirmed the constitutionality of Provisional Measure 1,202/2023, converted into Law No. 14,873/2024, which restricted the offsetting of tax credits following the “case of the century.” Under the rule, credits of R$ 10 million or more must now be paid in installments, with up to 60 installments for amounts exceeding R$ 500 million.

Ana highlighted the scope of the Superior Court of Justice’s (STJ) decision on the matter, which runs parallel to the STF’s ruling. According to her, “although Law No. 14,873 was motivated by the issue of declining tax revenue resulting from the ‘theory of the century,’ it applies to all federal offsets. In theory, anyone who is using credits in small increments because the offset period has been extended may benefit from the STJ’s ruling.” She also drew attention to the financial impact of the limitation on companies’ cash flow, stating that “even if there is monetary adjustment on the credit, if the taxpayer has to go to the bank to get money to pay taxes because they need working capital, they will pay much more than the Selic rate.”

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