The Superior Court of Justice (STJ) has established a precedent under Repetitive Theme 1,319, confirming the possibility of deducting Interest on Equity (JCP) from the Corporate Income Tax (IRPJ) and Social Contribution on Net Profit (CSLL) calculation bases, even when calculated based on profits from fiscal years prior to the shareholders’ meeting that authorized their payment.

– Thesis established by the STJ (Theme 1,319):

“It is possible to deduct interest on equity (JCP) from the IRPJ/CSLL calculation bases even when calculated on profits from a fiscal year prior to the shareholders’ resolution authorizing its payment.”

– Key grounds:

1. Interpretation of Article 9 of Law 9.249/1995:
The provision imposes no temporal restriction between the profit that forms the calculation basis and the fiscal year in which the resolution occurs. It only requires the existence of accumulated profits or profit reserves; calculation of JCP based on equity accounts; and observance of the TJLP limits. In other words, the law does not condition the deduction to the fiscal year in which the profit originated.
The legal trigger for the expense is the corporate resolution that creates the obligation to pay or credit the interest.

2. Overcoming the Federal Revenue Service’s (RFB) interpretation:
The RFB restricted the deduction to JCP calculated in the same fiscal year in which the profit was generated, based on IN 1,700/2017 and Cosit Rulings 329/2014 and 45/2018.
The STJ rejected this limitation due to lack of legal basis.

3. Applicable legal regime:
The operation is governed by the accrual regime: the expense arises only when there is a valid resolution by the shareholders’ meeting or competent body.
Before that, there is no legal obligation to pay, and therefore no expense to be recognized.

– Practical impacts:
The STJ reaffirmed the traditional interpretation of Law 9.249/95: the deduction of JCP stems from the corporate resolution, regardless of the fiscal year in which the profits that form equity were generated.

The decision is expected to affect a significant number of cases, particularly those involving publicly traded companies, with relevant impacts on tax planning.
With the thesis established, the new understanding binds all levels of the Judiciary and the Administrative Council of Tax Appeals (Carf), whose position had consistently been unfavorable to companies.

The ruling represents a milestone for legal certainty and interpretative uniformity regarding the deductibility of JCP.
The Dupont Spiller Fadanelli Advogados team continues to monitor the matter and remains fully available to clarify any questions.