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  • STF Prohibits States from Unilaterally Revoking ICMS Tax Benefits

    The STF (Brazil’s Supreme Federal Court) has ruled that states cannot unilaterally revoke tax benefits related to the ICMS (the state-level value-added tax) that were previously approved under agreements by Confaz (the National Council of Treasury Policy).

    The Mechanics of Confaz Rules

    Confaz is the council that brings together representatives from the Ministry of Finance and state finance secretaries. Under the Court’s ruling, although Confaz resolutions do not automatically implement tax changes into state laws, revoking a rule that has already been incorporated requires compliance with the council’s guidelines.

    To cancel a tax benefit, Confaz requires approval from at least four-fifths of its representatives. This supermajority requirement serves as a mechanism to curb the so-called “tax war” (interstate tax competition) among Brazilian states.

    The Specific Case: São Paulo and the Northern Region

    The STF ruling examined lawsuits filed by the states of Rondônia, Acre, Amapá, and Roraima against a decree enacted by the São Paulo state government in 2020. The São Paulo regulation had ended the ICMS exemption for goods shipped to Free Trade Areas in the Northern Region, which encompass municipalities within the claimant states.

    In January of this year, the São Paulo government reinstated the exemption, but limited the validity of the benefit only until September 30.

    The Court’s Decision

    The STF plenary decided the case by a 6-to-3 vote. The majority of the justices followed the opinion of the reporting justice, Justice Cármen Lúcia. The prevailing view established that the unilateral revocation of tax incentives by one state harms the other federation units.

    Justices Flávio Dino, Cristiano Zanin, Alexandre de Moraes, Dias Toffoli, and Edson Fachin joined the reporting justice. In contrast, Justice Luiz Fux dissented, arguing that states possess the autonomy to revoke incentives without prior approval from Confaz. This dissenting view was supported by Justices André Mendonça and Nunes Marques.

    Practical Implications

    For executives, investors, and business managers engaged in interstate commerce, the ruling reinforces operational stability. The decision prevents ICMS exemptions validated by Confaz from being abruptly and unilaterally eliminated by a single state, providing greater predictability for corporate logistic and financial planning.

    This content is for informational purposes only and does not constitute legal advice. For guidance on specific matters, consult a qualified lawyer.

  • STF Equalizes Maternity and Adoption Leave Periods in Brazil

    STF Equalizes Maternity and Adoption Leave Periods in Brazil

    The STF (Brazil’s Supreme Federal Court) has unanimously decided to equalize the durations of maternity leave and adoption leave for female workers. The ruling stems from a constitutional challenge filed by the Prosecutor General’s Office (PGR) in October 2023, which questioned the constitutionality of unequal treatment across different employment regimes and forms of motherhood.

    The New Counting Rule

    Under the Court’s ruling, biological and adoptive mothers are now entitled to 180 days of paid leave. This total comprises the standard 120-day leave plus a 60-day extension. The rule applies regardless of whether the worker is employed under the private-sector labor code or the public civil service regime.

    The leave period begins upon one of the following occurrences:

    • The date of birth;
    • The formal granting of legal guardianship/custody of the child;
    • Hospital discharge of the mother or newborn, in cases involving hospitalization (whichever occurs latest).

    The Supreme Court’s ruling is of immediate application, covering both future leaves and those already in progress.

    Context of the Prior Disparities

    Prior to this decision, Brazilian legislation established disparate timeframes depending on the worker’s employment regime and the nature of motherhood. Under the Consolidation of Labor Laws (CLT), which governs the private sector, biological and adoptive mothers were entitled to 120 days, extendable by 60 additional days for companies enrolled in the voluntary ‘Empresa Cidadã’ tax-incentive program.

    In the federal public sector, governed by Law 8,112/1990, pregnant civil servants were entitled to 120 days, whereas adoptive mothers received only 90 days. In specific careers, such as the Public Prosecution service, adoption leave was restricted to 30 days.

    Grounds for the Ruling

    Justice Alexandre de Moraes, the reporting justice for the case, emphasized in his vote that parental leaves serve primarily to foster emotional bonding between mothers and their children. Consequently, differential timeframes are unjustified. The Office of the Attorney General of the Union (AGU) also supported the extension during the trial, arguing that the measure facilitates postpartum recovery, child care, and aligns statutory leave with the six-month exclusive breastfeeding period recommended by the World Health Organization (WHO) and UNICEF.

    This content is for informational purposes only and does not constitute legal advice. For guidance on specific matters, consult a qualified lawyer.

  • CARF Validates Tax Credits for Petrobras’ Ship-or-Pay Contracts

    CARF Validates Tax Credits for Petrobras’ Ship-or-Pay Contracts

    The Administrative Council of Tax Appeals (CARF, Brazil’s administrative tax court) issued a relevant decision upholding Petrobras’ right to claim tax credits on expenses arising from ship-or-pay contracts.

    The Contractual Model

    In infrastructure operations, especially in natural gas transportation, contracts require operational guarantees. In the ship-or-pay model, the transportation company is compensated based on the pipeline capacity made available.

    The main feature of this arrangement is that payment is made for the reserved capacity, rather than for the actual volume of gas transported.

    The CARF Decision

    The dispute brought before the administrative tribunal concerned the right to maintain tax credits generated from these expenses. Upon analyzing the case, the council validated the claiming of credits on amounts paid under this contractual framework.

    The decision confirms that costs associated with reserving pipeline transportation capacity form part of the basis for calculating tax credits for the company.

    This content is for informational purposes only and does not constitute legal advice. For guidance on specific matters, consult a qualified lawyer.

  • Central Bank of Brazil Expands Rules on Cryptocurrencies and Self-Custody Wallets

    Central Bank of Brazil Expands Rules on Cryptocurrencies and Self-Custody Wallets

    The Central Bank of Brazil (BC) announced an expansion of regulatory oversight regarding virtual asset transactions. The measure, which takes effect on October 1, 2026, primarily targets anti-money laundering and combating the financing of terrorism, aligning the cryptocurrency market with stricter financial monitoring standards.

    The new guidelines directly impact Virtual Asset Service Providers (VASPs) and users who rely on self-custody wallets, demanding greater transparency in high-value transactions.

    Mandatory Reporting to Coaf

    The primary change introduced by the Central Bank concerns mandatory notifications to Coaf (Brazil’s Council for Financial Activities Control). Starting in October 2026, cryptocurrency transfers equal to or exceeding US$ 10,000 conducted to or from self-custody wallets must be automatically reported to the agency.

    Self-custody wallets are those in which the user retains direct control over the assets and private keys, without requiring an intermediary or exchange to custody the funds. Because this setup provides less readily available data to regulatory authorities, the new requirement seeks to bridge this information gap.

    The US$ 10,000 threshold operates exclusively as a trigger for mandatory reporting. The Central Bank clarifies that this amount does not represent a cap or prohibition on cryptocurrency movements. Coaf’s mandate is to receive and assess this data to detect potential irregular patterns, underscoring that reporting a transaction does not classify it as unlawful.

    Beyond virtual assets, the automatic reporting requirement to Coaf was also extended to physical cash foreign exchange operations reaching or exceeding the same US$ 10,000 threshold.

    New Requirements for Market Participants

    Companies operating within the virtual asset market will also encounter new regulatory deadlines and requirements. Operating VASPs will have until October 1, 2026, to formally submit their authorization requests to the Central Bank.

    The regulation also establishes strict procedures for winding down commercial relationships with entities that lack authorization or are not undergoing regularization. Furthermore, specific data submission requirements for Central Bank supervision will take effect on January 1, 2027.

    These rules complement the framework established in November 2025, which set baseline requirements for market participants, including:

    • Client protection and transparency in customer relations;
    • Anti-money laundering policies;
    • Security protocols and implementation of internal controls;
    • Customer risk profiling prior to executing complex operations.

    Practical Considerations

    This regulatory package reflects the Brazilian authorities’ efforts to enhance the volume and quality of data across the cryptoasset market. For investors and businesses, the current landscape requires technological and procedural adjustments to secure compliance with reporting and transparency mandates, mitigating risks linked to operations with limited data availability.

    This content is for informational purposes only and does not constitute legal advice. For guidance on specific matters, consult a qualified lawyer.

  • Connection in Another Panel Does Not Annul Arbitral Award

    Connection in Another Panel Does Not Annul Arbitral Award

    Arbitration is a dispute resolution method widely used by companies and investors due to its speed and specialization. A key pillar of this system is the impartiality of the arbitrators chosen to decide the dispute. However, the legal market is dynamic, and practitioners frequently cross paths across different cases.

    The limits of professional connections

    A common question among executives and company founders is whether professional interactions between participants in an arbitration proceeding can invalidate it. As reported by the legal news outlet Consultor Jurídico, the mere connection between an arbitrator and counsel serving together on a different arbitral panel is not sufficient ground to annul a decision.

    This means that simultaneous or past participation in separate proceedings does not, by itself, compromise the arbitrator’s ability to rule on the current case fairly and objectively. Annulment of an arbitral award requires proof of concrete facts demonstrating a breach of independence or impartiality, rather than merely crossing professional paths in other arbitral tribunals.

    Legal certainty for businesses

    For the business environment, this understanding is essential. It prevents claims of distant or strictly professional ties from being used strategically to attempt to set aside awards following an unfavorable outcome. This preserves legal certainty and the effectiveness of arbitral decisions, ensuring the procedure remains a secure and definitive venue for resolving corporate disputes.

    This content is for informational purposes only and does not constitute legal advice. For guidance on specific matters, consult a qualified lawyer.

  • Opportunities in BaaS for Virtual Assets in Brazil

    The Evolution of the Digital Economy in Brazil

    The Brazilian financial market is undergoing a transformation as traditional financial institutions draw closer to the digital economy. At the core of this change are the new rules applicable to Banking as a Service (BaaS) and Virtual Asset Service Providers (VASPs, or PSAVs in Brazil).

    Partnerships Between Banks and Crypto

    The primary opportunity created by the new guidelines is opening space for strategic partnerships. The BaaS model allows companies to integrate financial services into their platforms. Under the recent rules, virtual asset service providers gain greater clarity to structure joint operations with banks.

    This integration has the potential to benefit the financial ecosystem: banking institutions can participate in the cryptoasset market, while crypto companies gain access to the infrastructure of the traditional banking system. For investors and technology founders, monitoring this dynamic is an important step toward exploring the sector in Brazil.

    This content is for informational purposes only and does not constitute legal advice. For guidance on specific matters, consult a qualified lawyer.

  • STF debates ITBI tax immunity and revenue collection limits

    STF debates ITBI tax immunity and revenue collection limits

    The STF (Brazil’s Supreme Federal Court) has recently brought to light the ongoing dispute over the immunity from ITBI (the municipal real estate transfer tax). The debate centers on the tension between taxpayers’ rights to tax immunity and what has been described as an “aggressive drive for revenue” by tax authorities.

    The context of ITBI immunity

    ITBI is a municipal tax levied on real estate property transfers. Tax immunity is a constitutional mechanism designed to facilitate business structuring and is frequently discussed in corporate transactions. However, the application of this immunity has been the subject of continuous legal disputes.

    The discussion brought before the STF reflects the practical difficulties that companies and investors face when attempting to enforce this right. Municipal tax authorities, seeking to increase revenues, sometimes adopt stances that hinder the recognition of immunity, creating debate around the legal certainty of these transactions.

    Resistance against revenue collection pressure

    The phrase “aggressive drive for revenue,” highlighted in the context of STF discussions, illustrates the perception of an assertive stance in tax collection. This scenario frequently forces taxpayers to turn to the Judiciary to dispute the application of ITBI immunity.

    For the corporate sector and foreign investors operating in the Brazilian real estate market, the STF’s position is an important benchmark. The Court’s analysis regarding the limits of tax collection is essential for predictability in corporate restructurings and real estate asset investments.

    Market outlook

    Monitoring the evolution of this issue before the STF is relevant for founders and executives planning real estate asset movements. Defining the scope of ITBI immunity may impact fiscal risk assessments in corporate transactions.

    This content is for informational purposes only and does not constitute legal advice. For guidance on specific matters, consult a qualified lawyer.

  • Cade Investigates New WhatsApp Business Rules and Fees

    The Administrative Council for Economic Defense (Cade, Brazil’s antitrust authority) is conducting an investigation into recent changes to the terms of use and pricing policies of WhatsApp Business, introduced by Meta. The inquiry evaluates the potential antitrust effects of these new rules, which directly affect companies across various sectors, including financial institutions, airlines, delivery applications, and artificial intelligence (AI) developers.

    New Rules and Cade’s Intervention

    According to available information, Meta plans to end the free tier for customer service replies sent within 24 hours by businesses using the official WhatsApp Business API. Starting October 1, 2026, the platform will charge R$ 0.03 per message sent to customers under these conditions. Concurrently, the company intends to restrict the tool’s use by businesses whose core product is offering artificial intelligence assistants.

    In response to these changes, Cade requested information from more than 40 companies to assess the market impact. The regulatory authority also maintains a daily fine of R$ 250,000 against Meta and WhatsApp within the scope of this investigation.

    Levels of Dependency and Operational Impacts

    The responses submitted to Cade, some of which remain confidential, show that reliance on WhatsApp Business varies significantly among market participants. Reported impacts center on customer support, security, marketing, and the distribution of tech services.

    • High dependency: Companies such as Bradesco and Latam indicated that losing this channel would impair customer interaction levels and service coverage. Bradesco highlighted potential losses in transactional security communications, noting that the application has lower operating costs than traditional channels such as telephone and SMS. Zenvia reported that the tool is essential for commercializing conversational AI.
    • Complementary impact: Other companies, such as Uber, Claro, and Gol, classified their WhatsApp usage as complementary. For these businesses, viable alternatives exist—including proprietary apps, email, and SMS—which mitigates the effects of the new policies.

    Restrictions on Artificial Intelligence Assistants

    A core aspect of the investigation involves restrictions placed on AI assistant developers. Meta’s policy shift has already led to the termination of key integrations. Companies such as OpenAI (ChatGPT) and Microsoft (Copilot) ceased offering their services via WhatsApp in early 2026. Zapia, a personal AI assistant, reported a sharp decline in users and engagement in Brazil after leaving the platform, indicating that alternative channels did not replicate the application’s reach.

    Market Takeaways

    Cade’s investigation illustrates the growing regulatory scrutiny surrounding digital platforms and their ecosystems. For businesses that rely on third-party APIs as core infrastructure for customer service or product distribution, this scenario underscores the importance of evaluating technological dependency and operational costs associated with unilateral changes to terms of service.

    This content is for informational purposes only and does not constitute legal advice. For guidance on specific matters, consult a qualified lawyer.

  • STF Reviews Food Advertising Directed at Children

    The STF (Brazil’s Supreme Federal Court) is addressing a critical issue for the consumer goods sector and corporate communication strategies. The court will review Complaint (Reclamação) 77,097, filed by the food company BRF, bringing food advertising directed at children to the center of the debate.

    The Debate on Advertising to Children

    The legal discussion involves the concept known as the “Digital ECA,” referring to the application of the Child and Adolescent Statute (ECA) within contemporary media and technology environments. The core issue in Complaint 77,097 is the potential shift in current case law—the body of prior judicial decisions—that deemed food advertising campaigns aimed specifically at children to be abusive.

    Impacts on the Communication and Consumer Goods Sectors

    For executives, communications managers, and food industry companies, the outcome of this case before the STF represents a significant milestone. Any change in the court’s stance could overturn established case law and redefine the boundaries and guidelines for advertising campaigns, directly affecting how brands communicate with younger audiences.

    Monitoring this ruling is essential for businesses to align their marketing practices with legal requirements, mitigating the risks associated with distributing content that courts could deem abusive.

    This content is for informational purposes only and does not constitute legal advice. For guidance on specific matters, consult a qualified lawyer.

  • CARF Dismisses Statute of Limitations Claim in Fraudulent Interposition Case

    CARF Dismisses Statute of Limitations Claim in Fraudulent Interposition Case

    Brazil’s Administrative Council of Tax Appeals (CARF) recently issued a relevant decision for the foreign trade sector and companies operating in Brazil. The administrative tribunal dismissed the claim of interlocutory statute of limitations in a proceeding addressing fraudulent interposition.

    In the ruling, the Council upheld the forfeiture penalty fine against Microsoft do Brasil. Tax authorities identified the company as the actual purchaser of the imported goods, which formed the basis for the tax assessment and the penalty imposed by fiscal authorities.

    What is fraudulent interposition?

    In foreign trade, fraudulent interposition occurs when an import transaction is conducted through third parties to conceal the identity of the true purchaser of the products. Brazilian regulations require the actual purchaser of the goods to be clearly identified in customs declarations.

    When tax authorities determine that the importing entity on paper is not the true recipient and financier of the operation, the concealment of the actual purchaser is established. This practice is strictly audited by Brazilian customs authorities.

    The forfeiture penalty fine

    The penalty for concealing the actual purchaser is forfeiture (pena de perdimento), which consists of the loss of the imported goods to the State. However, when the goods cannot be seized or have already been distributed, this penalty is converted into a fine equal to the value of the goods. This was the penalty upheld by CARF in the case analyzed.

    Dismissal of the interlocutory statute of limitations

    Another central point of the decision was the rejection of the interlocutory statute of limitations (prescrição intercorrente). This legal concept refers to the loss of the State’s right to penalize or collect an amount due to unjustified administrative inactivity over a prolonged period.

    By dismissing this argument, CARF validated the continuation of the administrative proceeding and the resulting maintenance of the fine, indicating that the processing of the case did not justify canceling the assessment due to the lapse of time.

    Attention to import operations

    The decision illustrates the importance of structuring import operations with full transparency. Foreign investors and multinational companies operating in Brazil must ensure that import processes accurately reflect the economic reality of the transaction, correctly identifying all parties involved before customs authorities to avoid significant tax liabilities.

    This content is for informational purposes only and does not constitute legal advice. For guidance on specific matters, consult a qualified lawyer.