São Paulo Court of Justice overturns progressive service tax for uniprofessional companies
- Piva Advogados
- Apr 23, 2024
- 1 min read
Progressive rate of service tax for sole proprietorships, with calculation based on the number of qualified professionals, is unconstitutional, decides São Paulo Court of Justice.
The Special Body of the São Paulo Court of Justice has declared article 13 of Law 17.719 of the municipality of São Paulo unconstitutional. The annulled rule provided for the setting of a progressive rate of Tax on Services of Any Nature (ISS) for uniprofessional companies, with calculation based on the number of qualified professionals.
The magistrate explained that the provision establishing the ISS rate based on the number of professionals and the company's turnover adopts a criterion that would only apply to corporate companies.
The rapporteur, Judge Figueiredo Gonçalves, ruled that the provision violated the principles of equality and the ability to pay, as set out in Articles 5 and 145 of the Federal Constitution.
The decision is in line with Thesis 918, of general repercussion, of the Federal Supreme Court, which states: "It is unconstitutional for a municipal law to establish impediments to the submission of professional law firms to the system of fixed taxation on an annual basis in the manner established by national law."
There is still room for appeal to the higher courts.
We will continue to analyze this matter, with updates on the final decision so that we can assist our clients in having their right to a tax refund recognized.
Source: Conjur
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