Severe illness guarantees entitlement to income tax exemption

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The Income Tax Exemption[1] on the proceeds is the right of civil servants retired and retired military[2] who are suffering from serious illness or become inactive due to this disease.

It is a little-known law, although 1947 was enacted since 154, which, in its article 13, established as the diseases that guaranteed the benefit of the exemption "active tuberculosis, mental alienation, malignant neoplasia, blindness, leprosy or paralysis "[3].

Over the years, other diseases considered serious have become part of the diseases that enable its bearers to have their income exempt and not taxable, as can be seen from the diseases listed in item XIV of 6º of Law 7.713 / 88, currently in force :

Article 6º The following incomes perceived by individuals are exempt from Income Tax: (...)

XIV - Retirement or retirement benefits due to accident in service and those experienced by patients with occupational disease, active tuberculosis, mental alienation, multiple sclerosis, malignant neoplasia, blindness, leprosy, irreversible and incapacitating paralysis, severe heart disease, Parkinson's disease, ankylosing spondylosis, severe nephropathy, severe hepatopathy, advanced stages of Paget's disease (osteitis deformans), radiation contamination, acquired immunodeficiency syndrome, based on the conclusion of specialized medicine, even if the disease has been contracted after retirement or retirement; (Redaction given by Law No. 11.052 of 2004).

It is worth clarifying that the current jurisprudence guarantees the exemption of the Income Tax only to the patients of the diseases listed in the above device, since item II of article 111 of the National Tax Code[4] is expressly provided that the granting of a tax exemption takes place literally and does not allow extensive interpretation.

The benefit of the exemption is based on the duty of the[5], expressed in the Constitution, to protect life, dignity of the human person and health. It aims to guarantee the inactive the possibility of directing the amount that they do not collect as Income Tax for the costing of medical expenses, which allows better treatment and control of the illness that affects them.

Proof of a serious illness, the Income Tax exemption is retroactive to the time the illness was diagnosed, due to the restitution by the Treasury of the amounts that may have been deducted from the retirement or retirement benefits, observing, of course, the five-year prescription[6].

It should be noted that, according to current jurisprudence, the hypothesis of restitution of Income Tax does not follow the provisions of article 39, paragraph 5, of Decree 3.000 / 99, since the initial term for the calculation of the exemption is the date of proof of the disease (date of medical diagnosis), and not that of issuing the official award. As the preparation of this is always subsequent to the diagnosis of the disease, considering the date of preparation of the award as the beginning to calculate the amount to be refunded as Income Tax would not reflect the primary objective of the law, namely to ensure better financial conditions for the treatment of the disease[7].

The current majority rule has made the requirement in Article 30[8] of the Law 9.250 / 95, since it established that, for the enjoyment of the Income Tax exemption, it is not mandatory that the disease be diagnosed by an official medical board,[9].

In this sense, the understanding was confirmed that said article 30 consists of command directed exclusively for the public administration[10] and has no interference in the conviction of the court when the matter is brought to the Judiciary, because, as the magistrate freely appreciates the evidence presented in the process[11], regardless of whether they are official medical board reports or private reports, the amount is the force that the documentary evidence has in the conviction and in the grounds of the judicial decision.

In addition, it is worth noting the common practice of the public administration to determine a time limit for the Income Tax exemption in cases of retired and retired military personnel suffering from malignant neoplasia.

As the average period considered for declaring the malignant neoplasm to be retracted is five years, the public administration, in numerous situations, limits the exemption to the period of five years after the cancer diagnosis, since it considers that the benefit of the exemption can only be granted while the disease persists.

This time limit, however, violates the spirit of the rule that is to protect the beneficiary, even after the disease recedes.

The Superior Court of Justice[12] recognizes as a right the temporal non-limitation of the exemption, since no normative document foresees any type of time limit for the exemption, as demonstrated in article 5, paragraph XII, of Normative Instruction SRF 15, of 6 of February of 2001[13], and Article 39 of Decree 3.000 / 99[14], which regulate the taxation, inspection, collection and administration of Income Tax.

Therefore, the retired civil servant and the retired military officer, who are carriers of serious illnesses, certified by an official or private medical report, provided for in item XIV of article 6 ° of Law 7.713 / 88, are guaranteed, albeit by judicial means, the right to exemption from income tax on retirement and retirement benefits.


[1] In the words of the lecturer Roque Antonio Carrazza, the tax exemption "is based on the lack of economic capacity of the beneficiary or on the objectives of general utility or political opportunity that the State intends to achieve. (...) Tax exemptions can only be granted when they favor persons taking into account constitutionally consecrated objectives (protection of old age, family, culture, the mentally handicapped, economically weaker ones, that is, they show lack of capacity to bear the tax burden, etc.). " CARRAZA, Roque Antonio. Course of Constitutional Tax Law. 19ª ed. São Paulo: Malheiros, 2000, p.752.
[2] In addition to retirement and retirement benefits, the exemption granted to those suffering from a serious illness reaches the amounts received as supplementary retirement and pension, provided that the beneficiary is the patient with the disease.
[3] Article 13. The amounts related to retirement or retirement benefits, when motivated by active tuberculosis, mental alienation, malignant neoplasia, blindness, leprosy or paralysis, are exempt from taxation of income tax.
[4] Article 111. It interprets literally the tax legislation that disposes on:
I - suspension or exclusion of the tax credit;
II - grant of exemption;
III - exemption from compliance with ancillary tax obligations.
[5] The intention of the legislator to grant the State the duty to protect health is expressed in the Constitution of the Republic of 1988 in article 196, which states: "Health is the right of everyone and the duty of the State, guaranteed by social and economic policies aimed at reducing the risk of disease and other diseases and universal and equal access to actions and services for their promotion, protection and recovery. "
[6] PROCESSUAL CIVIL. DECLARATORY EMBARGOES. INCOME TAX. EXEMPTION. SERIOUS MOLESH BEARER. REFUND OF THE VALUE PAID UNAVAILALL. FIVE-YEAR PRESCRIPTION. NO INTERRUPTION OF THE PRESCRIPTION BY THE ADMINISTRATIVE PROCESS. ADVOCATIVE HOURS. I. The administrative claim for restitution of indébito prevents the decay of the right to request a return (Article 168, CTN), but does not interrupt the prescription of the repetition action (Article 172 of the CC), as a rule, only by prescribing the relative portions to the five-year period preceding the filing of the lawsuit. Precedents: (STJ, RESP 572.341 / MG, 2ª Class, min. João Otávio de Noronha, DJ of 18 / 10 / 2004; AgRg in AG 629.184 / MG, 1ª Class, min José Delgado, DJ of 13 / 6 / 2005 584.372 / 2 / 23 / 5 / MG, Minister Teori Albino Zavascki, DJ 2005 / 815.738 / 25) (...) (TRF-10 - AC: 2007 PE 5, Rapporteur: Federal Judge Margarida Cantarelli, Judgment Date: 429771 / 0000921212005405830502 / 20, 5ª Class, Date of Publication: Source: Related searches - date: 16 / 6 / 2008 - Page: 316 - Number: 113 - Year: 2008)
[7] REsp 812799 / SC;
[8] Article 30. As of 1 of January of 1996, for the purpose of recognizing new exemptions that deal with the subsections XIV e XXI of article 6º of Law 7.713, of 22 of December of 1988, with the wording given by47 of 8.541 Act, 23 of December of 1992, the disease must be proven by an expert report issued by an official medical service, the Federal Government, the states, the Federal District and the municipalities.
§ 1º The official medical service will fix the period of validity of the expert report, in case of diseases that can be controlled.
§ 2º In the list of diseases referred to in item XIV of article 6º of Law 7.713, of 22 of December of 1988, with the wording given by 47 of 8.541 Act, 23 of December of 1992, cystic fibrosis (mucoviscidosis) is included.
[9] TAXATION. PROCESSUAL CIVIL. ORDINARY ACTION. INCOME TAX. RETIRED SERVER. EXEMPTION. SERIOUS MOLESH. OFFICIAL OFFICIAL DISPENSABLE PROOF. FREE CONVENTION. Article 30 of Law 9.250 / 95 imposes as a condition for granting exemption from income tax the proof of serious illness by means of an official expert's report, however, such a device does not bind the magistrate in his free assessment of the evidence in the file. The official expert's report is not indispensable if the judge, based on other evidence in the file, finds that the existence of a serious illness capable of ensuring exemption from income tax, in accordance with article 6º XIV of Law 7.713 / 88. Related searches (AgRg in AREsp 514.195 / RS, Minister Humberto Martins, 2ª Turma, judged in 18 / 6 / 2014, DJe 27 / 6 / 2014).
[10] AgRg in AREsp: 145082 PE 2012 / 0037725-0.
[11] Article 131. The judge shall freely assess the evidence, having regard to the facts and circumstances in the file, even if not alleged by the parties; but must indicate in the sentence the reasons that formed the conviction (Redaction given by Law 5.925, 1º / 10 / 1973).
Article 436. The judge is not attached to the expert report, and may form his conviction with other elements or facts proven in the records.
[12] AgRg in AREsp: 436.073 RS; AgRg in AREsp: 436.073 RS.
[13] Article 5º The following income is exempt or not subject to Income Tax: [...].
XII - Retirement or retirement benefits due to accident in service and received by patients with occupational disease, active tuberculosis, mental alienation, multiple sclerosis, malignant neoplasia, blindness, leprosy, irreversible and incapacitating paralysis, severe heart disease, Parkinson's disease, ankylosing spondylarthrosis , severe nephropathy, advanced stages of Paget's disease (osteitis deformans), radiation contamination, acquired immunodeficiency syndrome (AIDS) and cystic fibrosis (mucoviscidosis).
[14] Article 39. They shall not enter into the statement of gross income: [...].
XXXIII - Retirement or retirement benefits, provided that they are motivated by accident in service and those suffered by persons suffering from occupational disease, active tuberculosis, mental alienation, multiple sclerosis, malignant neoplasia, blindness, leprosy, irreversible and incapacitating paralysis, severe heart disease, of Parkinson's disease, ankylosing spondylosis, severe nephropathy, advanced stages of Paget's disease (osteitis deformans), radiation contamination, acquired immunodeficiency syndrome, and cystic fibrosis (mucoviscidosis), based on the conclusion of specialized medicine, even if the disease was (7.713 Act, 1988, 6, XIV, 8.541, 1992, 47, 9.250, 1995, 30, 2).

Article Source: Conjur

By Luiza Emrich so Office of Advocacy Torreão Braz 31 August 2016, 15h25

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