Brazil: Planejamento Tributário: Entenda a Linha Tênue Entre Elisão e Fraude Fiscal

Have you ever wondered about the difference between smart tax planning and tax fraud? This is a common question for many entrepreneurs and managers, and the answer is crucial for the financial and legal health of any business. In Brazil, the debate over tax avoidance and evasion is ongoing, and understanding the boundaries is essential.

Also read: safe tax compensation | how to use tax credits | PER/DCOMP | tax prescription | defense against tax assessments

📅 Last verified and updated: 08/10/2025

What Characterizes Tax Fraud?

Tax fraud is much more than a simple delay in tax payments. It is characterized by intentional conduct (with intent) by the taxpayer or third parties, aiming to suppress, reduce, or delay the payment of legally owed taxes. The key here is the intention to deceive, using tricks such as simulation, falsity, or deceit.

Imagine fraud as a direct attack on the Democratic Rule of Law. It compromises public revenue and fiscal justice, affecting the government’s ability to invest in essential services. Law No. 8,137/1990, in its Article 1, details criminal conduct, such as omission of information, false declarations, alteration of tax documents, and use of simulated mechanisms to circumvent oversight.

Prominent figures in tax law, such as Sacha Calmon Navarro Coêlho, describe tax fraud as a “willful action or omission aimed at preventing or delaying, in whole or in part, the occurrence of the taxable event of the main tax obligation, or excluding or modifying its essential characteristics.” This means that the intention to manipulate the legal-tax relationship, disguising taxable events or distorting data, is a central element.

The Administrative Council of Tax Appeals (CARF) and the courts have reinforced that fraud requires the absence of economic substance in operations, abuse of legal forms, and simulation. In other words, if an operation seems to have been created solely to deceive the tax authorities, without a real business purpose, it is likely to be considered fraud. The doctrine of “economic substance over form” is increasingly applied, disregarding purely formal acts when there is no economic rationale behind them.

Avoidance vs. Evasion: The Fine Line

The big difference lies here:

• Tax avoidance (legitimate tax planning) is when you adopt legitimate and legal measures BEFORE the taxable event occurs, seeking to reduce your tax burden. It is a taxpayer’s right, provided the means are lawful and there is a genuine business purpose behind the operation. Think of choosing a more favorable tax regime or restructuring operations to optimize taxes, all within the law.
• Tax evasion (fraud) is an ILLEGAL conduct, where the taxpayer, AFTER the taxable event has already occurred, uses fraudulent or deceitful means to avoid paying the due tax. This may involve document forgery, omission of income, etc.

The distinction is vital for legal security. CARF and the Superior Court of Justice (STJ) use criteria such as business purpose and substance over form to differentiate the two. If a company is created solely to reduce taxes, without any other commercial purpose (absence of business purpose), this can be a strong indication of fraud, subject to disregard by the tax authority.

Who is Responsible for Tax Fraud?

Tax fraud has consequences in various spheres: administrative, civil, and criminal.

Firstly, the taxpayer (whether an individual or a legal entity) is the primary responsible party for the evaded tax credit. However, responsibility can extend to third parties when they contribute to the fraudulent practice.

Article 135 of the National Tax Code (CTN) holds directors, administrators, and legal representatives accountable who act with excess powers or in violation of the law. STJ’s Precedent 430 requires proof of active and willful involvement in the illicit act for these third parties to be held accountable. It is not enough to be just the administrator; there must be proven participation in the fraud.

In the administrative sphere, fines can reach 150% of the owed tax if intent is proven. Criminally, Law No. 8,137/90 typifies crimes against the tax order, but here too the specific intent to defraud the tax authorities must be proven. Mere default or negligence does not constitute a tax crime.

Heleno Taveira Tôrres highlights that responsibility for fraud requires three elements: willful conduct (active or omissive), causal link, and actual harm to the tax authorities.

Can Tax Consultancies Be Held Responsible?

This is a question that has generated considerable debate. The tax authorities sometimes attempt to extend joint liability to lawyers and consultants, alleging “common interest in the situation that constitutes the taxable event” (Art. 124, I, of the CTN).

However, this interpretation is widely criticized. The mere fact of a professional signing documents as an attorney or preparing a tax plan does not make them jointly responsible. The Superior Court of Justice (STJ) and CARF have a consolidated understanding that the “common interest” must be a direct legal interest in the taxable event, not a mere indirect economic benefit (such as fees for successful planning).

Precedents from CARF and STJ reinforce that mere technical advice does not imply solidarity, unless there is active and willful participation in the illicit act. In other words, if the consultancy acted in bad faith and directly participated in a fraudulent scheme, yes, it can be held accountable. But the mere provision of services, within ethical and legal limits, does not make it guilty of the client’s potential frauds.

Conclusion

Understanding the difference between tax avoidance and evasion is crucial for the legal security of any company. Legitimate tax planning is a taxpayer’s right, but it must always be guided by the legality of the means, prior to the taxable event, and especially by the existence of a real business purpose.

Tax fraud, on the other hand, is an illegal practice with serious administrative and criminal consequences. Combating it requires rigor, but always with respect for constitutional principles and the guarantees of the taxpayers and professionals involved. The tax authorities and courts are increasingly vigilant in distinguishing what is a legitimate tax optimization strategy from what is a deliberate attempt to deceive the tax authorities.

Is your company up to date with tax planning? Do you always seek tax avoidance or risk falling into evasion?

📚 Also read: Tax Compensation | Prescription | Tax Defense | SPED Fines