Tax offsetting is a way for taxpayers to use credits they have with the tax authorities to pay off taxes they owe. While it may seem simple, this procedure has specific rules and limits defined by law.
Recently, the Superior Court of Justice (STJ) ruled that offsetting social security debts with credits calculated before the implementation of eSocial is not permitted. This decision was made in the judgment of Resp 2.109.311-RJ.
In practice, this means that those with INSS debts cannot use old credits—obtained before eSocial came into effect—to offset them. This is called “cross-compensation,” prohibited by Article 26-A of Law No. 11,457/2007.
The reason is that the law requires that offsetting comply with strict rules, including regarding the timing of the credit’s origination. The Superior Court of Justice (STJ) ruled that the term “assessment period” refers to the date the tax was generated (and not the date the credit was legally recognized).
Therefore, if the credit was recognized judicially, but refers to a tax calculated before eSocial, it cannot be used to pay off current social security debts.
This is a very detrimental understanding for taxpayers, and it may make it difficult to return amounts paid unduly (e.g., forcing taxpayers to wait for payment of court orders).