The Superior Court of Justice changed its interpretation on the IPI taxation on resale of imported products. In 2014, the 1st Section of the same Court ruled that no IPI should be due upon the resale of imported goods, but the favorable precedent is now superseded by the decision issued on 14 October 2015.

IPI is a tax on manufactured products. According to the applicable law, it would be due upon customs clearance and also upon the resale of the imported goods, as well as on the sale of manufactured products.

The arguments in favor of the non taxation were basically that the taxation on the resale would not be allowed, as there would not be a manufacturing activity carried out in Brazil that would give rise to a new taxation.  In 2014, the Court accepted those arguments and concluded that it would indeed consist of a double taxation not acceptable in our legal system. The 2014 case was not issued as a binding precedent, meaning that each taxpayer would need to file its own lawsuit to assure the right to not pay IPI on resale of imported goods.

The Federal Government was able to take a new case to analysis by the same 1st Section of the same Superior Court. However, the new case was analyzed under the procedure of a binding precedent. The Court revisited its position and adopted an interpretation that was exactly opposite to the 2014 case. The votes are not yet public, but it seems that the allegation of losses to to the Federal government's tax revenue was very effective to convince the judges. Losses were estimated at BRL1 billion per year.

Since the new decision was issued as a binding precedent, the only possible alternative to revert it in favor of the taxpayer is in case an appeal is filed and accepted by the Supreme Court (Higher Brazilian Court in charge of constitutional matters). This is unlikely to occur, as the Supreme Court has already decided that the subject under discussion does not have a constitutional basis and therefore is not eligible to be analyzed by such Court.

This means that the possibility of successfully claiming that IPI is not due on resale of imported goods is practically null and the taxpayers will basically continue to apply the tax, as occurs today.