News

The First Section of the Brazilian Superior Court of Justice (STJ) decided, under Theme 1224, that extraordinary contributions paid to closed private pension funds may be deducted from the individual income tax (IRPF) base, subject to the legal limit of 12% of annual income.

Given that the judgment was rendered under the representative appeals system, this interpretation must be followed by all lower courts.

Complementary Law No. 109/2001 provides for two types of contributions to pension plans:

· Ordinary contributions, intended to fund retirement benefits;

· Extraordinary contributions, used to cover deficits, finance past service, or address other expenses not included in regular contributions.

The main issue examined by the STJ was whether the tax benefit provided under Law No. 9,532/1997 – allowing deductions for private pension contributions – also applies to extraordinary contributions made to closed private pension funds.

Justice Rapporteur Benedito Gonçalves emphasized that tax benefits cannot be extended without explicit legal authorization. However, since the law does not distinguish between types of contributions, the Court recognized that both ordinary and extraordinary contributions may be deducted, always within the 12% limit.

The Justice also reaffirmed that the Courts cannot modify this cap, as only legislation may create or expand tax benefits.