Tax Area

The STJ may settle, by means of a repetitive appeal, the controversial discussion over the calculation basis to be used to determine the employer’s social security contributions paid by companies, clarifying whether taxpayers should consider the gross amount of the payroll or deduct from the total compensation paid to employees the amounts withheld as transportation vouchers, food vouchers, and health insurance. 

The proceeding of repetitive appeals, provided for in arts. 1,036 to 1,041 of the Civil Procedure Code, allows for the joint trial of two or more special appeals dealing with the same legal controversy. The decision rendered by the STJ under this procedure has a binding effect and must be applied to all proceedings dealing with the same matter. In the specific case of the calculation basis for social security contributions, the STJ has already identified the diversity of precedents on the matter and is expected to define whether it will be heard under the proceeding of repetitive appeals.  

The taxpayers’ argument for using the net payroll basis is that the amounts deducted from employees for transportation vouchers, food vouchers and health insurance are not work-related funds, and for this reason should not be computed in the calculation of the employer’s social security contributions. Art. 28, §9 of Law No. 8,212/1991 itself provides that these amounts cannot be included in the contribution salary.  

The Federal Revenue Service, on the other hand, believes that these amounts are intended to remunerate work, and should be included in the calculation basis of social security contributions of companies (Answer to Inquiry COSIT No. 96/2021). For the Tax Authorities, what is intended to be taxed are not the amounts of benefits earned by the employee, but the remuneration owed to the employee in consideration for the services provided by him/her. The amounts discounted by the company as transportation vouchers, food vouchers and health insurance, therefore, should be included in the calculation basis of the employer’s social security contributions, regardless of the treatment given to the portion borne by the company.   

There are several precedents unfavorable to taxpayers, including in the Superior Court of Justice (Special Appeals Nos. 1.956.256 and 1.949.888). However, if the matter is judged under the proceeding of repetitive appeals, regardless of its outcome, the controversy will be settled, thus at least providing taxpayers with legal security.