Credits: Conjur

Constitutional Amendment No. 113/2021 inaugurated a new paradigm for the use of credits arising from final and unappealable court decisions by expressly recognizing the possibility of their use to extinguish tax debts and granting constitutional treatment to the assignment of these credits. The amendment represented an important advance in the valuation of the asset circulation of credit rights and rekindled discussions about the limits of tax compensation carried out by the assignee.

The discussion, however, presupposes a prior question: after the assignment has been duly perfected, can the credit still be considered to belong to a third party? The answer requires first examining the effects of credit assignment in Civil Law and only then interpreting article 74, §12, of Law No. 9.430/1996.

The issue gains particular relevance because the interpretation of article 74, § 12, of Law No. 9.430/1996 cannot disregard a correct understanding of the legal institution to which it refers. Before defining the scope of the legal prohibition, it is necessary to understand what effects the assignment produces on the ownership of the credit and whether Tax Law can disregard the discipline established by Civil Law and subsequently reinforced by the Constitution itself.

It is precisely from this perspective that the present article is developed. It seeks to analyze the legal effects of the assignment of credit in light of Civil Law and to verify how these effects should influence the interpretation of article 74, § 12, of Law No. 9.430/1996, especially after the system introduced by Constitutional Amendment No. 113/2021.

Transfer of ownership as a legal effect of credit assignment.

The assignment of credit constitutes one of the main instruments for the circulation of patrimonial rights foreseen by Civil Law. By allowing the holder of a credit right to transfer it to a third party, the legal system upholds private autonomy and recognizes that credits, as assets forming part of the patrimony, can be freely negotiated, except in cases of legal or contractual prohibition, or those arising from the very nature of the obligation.

From this perspective, the assignment governed by articles 286 to 298 of the Civil Code is eminently translative in nature. The legal transaction aims to transfer ownership of the credit, promoting a true singular succession in the creditor’s legal position.

In this sense, Caio Mário da Silva Pereira teaches that the assignment of credit consists of the substitution of the creditor in the obligatory relationship, without any alteration of the content of the obligation, with only the transfer of the credit right to the new holder occurring.

The same understanding is developed by Orlando Gomes, for whom assignment represents a modality of transmission of obligations in which the credit moves from the assignor’s assets to the assignee’s assets, preserving the original obligatory relationship intact. The debtor remains bound by the same conditions previously agreed upon, with only the person entitled to demand fulfillment of the obligation changing.

This conclusion also stems from the legal framework itself. Article 290 of the Civil Code conditions the effectiveness of the assignment against the debtor solely on notification to the debtor, making the debtor’s consent unnecessary for the legal transaction to take place.

It is precisely at this point that one of the main legal effects of assignment lies. As the doctrine highlights, only the right to credit is transferred to the assignee, with all other characteristics of the obligatory relationship remaining unchanged. In other words, the obligation continues to exist with the same object, the same guarantees, the same limits, and the same defenses that can be raised by the debtor; only the creditor’s position changes.

The practical consequence of this construction is evident. Once the assignment is perfected, the credit ceases to be part of the assignor’s assets and becomes part of the assignee’s assets. There is no sharing of ownership, nor does a right belonging to the former creditor persist. The assignee begins to exercise their own right, acquired through a legal transaction expressly governed by the Civil Code.

This premise constitutes the starting point for the analysis developed in the following topics. Before investigating the scope of the limitations imposed by tax legislation on the use of certain credits, it is essential to define who is the holder of these credits after the assignment has been duly perfected. Only from this definition will it be possible to examine whether the expression “third-party credit,” used in Article 74, § 12, of Law No. 9,430/1996, can be interpreted to encompass credits whose ownership has already been duly transferred to the assignee’s assets.

Constitutionalization of the assignment of judicial credits by Constitutional Amendment 113/21

The assignment of credit does not constitute an innovation introduced by Constitutional Amendment No. 113/2021. As seen, it is a traditional institution of Brazilian Civil Law, regulated for decades by the Civil Code as a legitimate mechanism for the circulation of patrimonial rights.

Until the enactment of Constitutional Amendment No. 113/2021, the assignment of court-ordered payments was already grounded in the constitutional text itself, which allowed the transfer of these credits upon notification to the competent court. The constitutional reform, however, significantly broadened the legal effects of this asset transfer by establishing new scenarios for the use of credits arising from final and unappealable court decisions, especially for the purpose of extinguishing obligations to the Public Treasury.

In this context, paragraphs 11 and 13 of article 100 of the Constitution assume special importance. Paragraph 11 now expressly provides that creditors may offer payment orders for various purposes, including the settlement of debts to the Public Treasury. In turn, paragraph 13 expressly recognizes the effectiveness of the assignment of credits contained in payment orders, establishing that the transfer will produce effects regardless of the debtor’s consent, requiring only notification to the responsible court and the debtor entity. This is a rule that is in full harmony with the system already adopted by the Civil Code.

The relevance of these changes transcends the simple reorganization of the constitutional regime of court-ordered payments. By expressly admitting the circulation of these credits and providing for their use in extinguishing obligations to the Public Treasury, the Constitution reinforced the patrimonial nature of the judicially recognized credit right and conferred greater legal certainty to assignment transactions.

Therefore, this is not merely an exceptional authorization granted by the constituent power. Constitutional Amendment No. 113/2021 starts from a premise already consolidated by Civil Law: credits are part of the assets of their holder and, as a rule, can be freely transferred. What the constitutional reform promotes is the recognition of this reality also within the scope of tax law relations.

This finding has significant interpretative consequences. If the Constitution itself recognizes assignment as a legitimate instrument for the circulation of judicial credits and regulates its effects on the Public Treasury, it becomes necessary to interpret the infra-constitutional legislation in accordance with this new system. This is not about dismissing, outright, any legal limitations on tax compensation, but about recognizing that such limitations must be understood in light of the currently prevailing constitutional regime.

From this perspective, the discussion shifts from focusing exclusively on the possibility of using assigned credits to extinguish tax debts to requiring reflection on a prior and more elementary aspect: what legal effects does the Constitution attribute to a duly executed assignment?

It is precisely at this point that the analysis of article 74, § 12, of Law No. 9.430/1996 is relevant. A correct understanding of the expression “third-party credit” presupposes, first and foremost, the identification of who holds the credit after the assignment has been duly perfected. Only from this premise will it be possible to verify whether the legal prohibition extends to credits that, although originally belonging to another party, have legitimately become part of the assignee’s assets by virtue of a legal transaction recognized by both Civil Law and the Constitution itself.

Interpretation of article 74, § 12, of Law No. 9.430/1996 regarding the transfer of credit ownership.

Article 74, § 12, of Law No. 9.430/1996 establishes situations in which compensation will be considered undeclared, including the use of third-party credit. The purpose of the rule is clear: to prevent the taxpayer from using credits belonging to another person to extinguish their own debts to the Public Treasury.

However, a correct interpretation of the provision requires attention to the legal text itself. The legislator prohibited the use of third-party credit, not credit originally belonging to a third party. This distinction is relevant because it shows that the rule refers to the ownership of the credit at the time of its use, and not to its origin.

It is not up to the interpreter to broaden the scope of this restriction to encompass a situation not foreseen by law, especially in tax matters, where the principles of legality and restrictive interpretation of rules limiting rights prevail. If the legislator intended to prohibit the use of credits originating from a third party, they could have done so expressly. However, that was not the wording adopted.

It is precisely at this point that the discipline of credit assignment assumes a decisive role. As seen, a duly perfected assignment transfers ownership of the credit right to the assignee, causing the credit to cease being part of the assignor’s assets and become part of the acquirer’s legal assets.

This legal consequence cannot be disregarded by Tax Law. As Paulo de Barros Carvalho teaches, the legal system must be understood as a unified and coherent system, whose institutions cannot receive different meanings without express legal provision. Along the same lines, Article 110 of the National Tax Code prevents tax legislation from altering the content of private law institutions used by the system itself, preserving the unity and coherence of the legal system.

From this perspective, the application of the prohibition foreseen in article 74, § 12, necessarily depends on the identification of the credit holder at the time of compensation. If the assignment, duly carried out, results in the transfer of ownership of the right, the premise that the credit continues to belong to a “third party” ceases to find support in the very civil law that governs the institution.

This conclusion gains even more relevance after Constitutional Amendment No. 113/2021. By expressly recognizing the assignment of judicial credits and admitting their use against the Public Treasury, the Constitution reinforced the patrimonial effects of this legal transaction and conferred greater security to the circulation of these assets. In this context, the interpretation of infra-constitutional legislation must be compatible with the current constitutional system, preserving the legal effects inherent in the transfer of credit ownership.

The application of the prohibition foreseen in article 74, § 12, of Law No. 9.430/1996 presupposes the correct identification of the creditor’s ownership at the time of compensation. If the duly perfected assignment transfers the legal position of creditor to the assignee, incorporating the credit into their assets, the expression “third-party credit” must be interpreted in accordance with this legal reality. The solution to the controversy, therefore, does not stem from the expansion or restriction of the scope of the tax rule, but from the correct understanding of the civil law institution to which it refers and the necessary harmony between the Civil Code, the Constitution, and tax legislation.

Conclusion

The assignment of credit is a traditional institution of Civil Law and produces a well-defined legal effect: the transfer of ownership of the credit right from the assignor to the assignee. Constitutional Amendment 113/2021 constitutionally reinforced this patrimonial circulation and requires a harmonious interpretation of the infra-constitutional legislation.

In this context, article 74, §12, of Law No. 9.430/1996 prohibits the use of third-party credit, an expression that must be understood in light of the civil law concept of assignment. If ownership has been duly transferred, the controversy ceases to be tax-related and instead involves the correct identification of the credit holder.

More than discussing the extent of the prohibition foreseen in tax legislation, the controversy requires recognizing that defining the ownership of the credit is a logically prior question. Before inquiring whether a given credit can or cannot be used for tax offsetting, it is necessary to answer to whom this credit belongs from the perspective of the legal system. It is precisely this answer that Civil Law offers when regulating the assignment of credit, and which the Constitution has expressly come to uphold.

The proposal developed in this article does not intend to exhaust the debate nor eliminate the need for regulation and jurisprudential evolution on the subject. Rather, it seeks to contribute to a systematic interpretation of the legal system, in which the effects of credit assignment are understood coherently between Civil Law, the Constitution, and Tax Law. After all, if the ownership of the credit has been duly transferred to the assignee, it is on this new legal reality that the interpretation of tax legislation should focus.

References

BRAZIL. Constitution of the Federative Republic of Brazil of 1988.

BRAZIL. Constitutional Amendment No. 113, of December 8, 2021.

BRAZIL. Law No. 5,172, of October 25, 1966 (National Tax Code).

BRAZIL. Law No. 9,430, of December 27, 1996.

BRAZIL. Law No. 10,406, of January 10, 2002 (Civil Code).

PEREIRA, Caio Mário da Silva. Institutions of Civil Law. Vol. II. 35th ed. Rio de Janeiro: Forense.

GOMES, Orlando. Obligations. 19th ed. Rio de Janeiro: Forense.

CARVALHO, Paulo de Barros. Course on Tax Law. 35th ed. São Paulo: SaraivaJur.

AMARO, Luciano. Brazilian Tax Law. 25th ed. São Paulo: SaraivaJur.

SCHOUERI, Luís Eduardo. Tax Law. 13th ed. São Paulo: SaraivaJur.

• Amanda Prates is a lawyer (OAB-PR), a student in the MBA program in Tax Management at USP/Esalq, specializing in the areas of Tax Law, Civil Law, and Contract Law, with experience in operations involving judicial credits, legal structuring of businesses, and business consulting, as well as studies in the area of ​​tax compensation, assignment of credits, and the interaction between Civil Law and Tax Law.