ReleaseWire

Brazil: Criminal Charges Against Taxpayer Possible Before Determining Tax Debt

Posted: Thursday, May 24, 2012 at 3:55 PM CDT

Sunnyvale, CA -- (SBWire) -- 05/24/2012 --A Brazilian Supreme Court ruling declared that a taxpayer can be charged with criminal charges even if the tax debt is not confirmed by the administrative courts. This is a major shift from its earlier stand where criminal charges could be filed against a defaulting taxpayer only on confirmation of the actual debt.

The Supreme Court verdict was given within the case records of the Habeas Corpus 108.037 proposed by a Brazilian taxpayer.

Background:
In 2009, the Supreme Court had established that there was no material crime against the tax system before definitive constitution of tax debt. Post administrative court proceedings and determination of the amount of tax being due, definitive constitution of the tax debt is verified. Criminal charge against the taxpayer could be filed only after the administrative court’s confirmation of the actual tax debt amount.

The taxpayer argued against the criminal charges stating that the charges had been initiated prior to the administrative courts confirming if the tax debt existed or not.

Decision:
Dismissing the taxpayer’s argument, the Supreme Court panel handling this case held that when the due tax debt is obvious and there is fraud against the system, it is not obligatory to wait for the final conclusion by the administrative courts.

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