Brazil's Supreme Court upholds tax exemption rules for pesticides.

The Supreme Federal Court (STF) decided this Thursday (18) to uphold the validity of granting tax benefits for pesticides. The Court judged two actions that were filed by PV and PSOL. The parties questioned the validity of Agreement No. 100 of 1997, of the National Council of Finance Policy (Confaz), and of Constitutional Amendment (EC) 132 of 2023.

The regulations allowed for the application of a differentiated tax regime for pesticides and a 60% reduction in the rates of the Tax on the Circulation of Goods and Services (ICMS) on these products.

By a vote of 8 to 2, the Court dismissed the lawsuits and ruled that the tax exemption on the sale of pesticides cannot be considered unconstitutional. The votes to uphold the exemption were cast by Justices Cristiano Zanin, Luiz Fux, Dias Toffoli, Alexandre de Moraes, Gilmar Mendes, Nunes Marques, André Mendonça, and Flávio Dino.

Edson Fachin and Cármen Lúcia expressed their opinions that the tax benefits were unconstitutional.