In a company with federal tax liabilities, the partners' decision on what to do with the year's profit has carried, for more than 60 years, a risk that rarely makes it onto the meeting agenda. Article 32 of federal Law No. 4,357, of July 16, 1964, prohibits a legal entity with an unsecured debt owed to the Federal Union from distributing bonuses to its shareholders and from granting or allocating profit shares to its partners or quotaholders, officers and members of management, supervisory or advisory bodies. Article 52 of the Lei Orgânica da Seguridade Social (Organic Social Security Law, federal Law No. 8,212, of July 24, 1991), as amended by federal Law No. 11,941/2009, refers to the same rule.
The penalty lies in paragraph 1 of Article 32, as amended by federal Law No. 11,051/2004, and has two addressees:
- The legal entity that distributes pays a penalty of fifty percent of the amounts unduly distributed or paid.
- The officers and other members of senior management who receive those amounts pay a penalty of fifty percent of what they received.
Paragraph 2 caps each of them at fifty percent of the total unsecured debt.
The Question
Hence the question the statute never answered clearly: what does it mean, for this purpose, to be in debt? Is a tax assessment still under administrative challenge enough? A tax that was declared and not paid? A contribution recorded in the books and not remitted? Or must the debt already be ready to be collected?
The Analysis
The Supremo Tribunal Federal (Brazil's Federal Supreme Court) answered on September 30, 2026, when it concluded the judgment of Direct Action of Unconstitutionality (ADI) 5,161. The position opened by Justice Cristiano Zanin prevailed by majority, and the full bench set the following thesis: "Articles 32 of Law No. 4,357/1964 and 52 of Law No. 8,212/1991 are constitutional, construed in conformity with the Federal Constitution so that the penalty for distributing bonuses or profit shares applies only when, cumulatively: (i) the tax claim has been definitively constituted and registered as enforceable debt of the Federal Union; (ii) the enforceability of the tax claim is not suspended by any of the grounds set out in Article 151 of the Código Tributário Nacional; and (iii) the debt is not secured by any of the forms set out in Article 9 of Law No. 6,830/1980." (free translation)
The three requirements are cumulative, and the absence of any one of them is enough to rule out the penalty:
- Debt not registered. A tax assessment under challenge is not registered as enforceable debt.
- Enforceability suspended. A registered debt that is under an installment plan has its enforceability suspended under item VI of Article 151 of the Código Tributário Nacional (Brazilian National Tax Code, federal Law No. 5,172/1966).
- Debt secured. A registered and enforceable debt that is secured in tax foreclosure proceedings also falls outside. The accepted forms of security are those in Article 9 of the Lei de Execução Fiscal (Tax Foreclosure Law, federal Law No. 6,830, of September 22, 1980): cash deposit, bank guarantee, surety insurance, assets nominated for attachment, and assets offered by third parties and accepted by the tax authorities.
The decision also expressly ruled out any contrary interpretation, including that set out in Article 263, paragraph 2, of Normative Instruction RFB No. 2,110/2022 (a Federal Revenue Service rule), insofar as it treats an accounting provision as constituting a debt capable of triggering the penalty. Dissenting were the rapporteur, Justice Luís Roberto Barroso, and Justice Nunes Marques, who would have ruled out the penalty where assets or income sufficient to pay the registered debt in full had been set aside, and Justice Cármen Lúcia and Justice Flávio Dino, who voted to uphold the provisions in full.
The Nuance
It is worth noting, however, that Article 151 of the Código Tributário Nacional, to which the thesis refers, gained new grounds for suspension after the thesis was proposed. Federal Supplementary Law No. 236, of September 4, 2026, amended items III and V and added four items:
- the institution of special tax and customs arbitration;
- a settlement proposal accepted by the tax administration;
- an agreement resulting from mediation, until it is eventually dissolved;
- the creditor's acceptance of surety insurance or a bank guarantee offered in tax foreclosure, for as long as they comply with the rules governing their acceptance and no claim event has occurred.
The thesis was proposed in Justice Cristiano Zanin's opinion after a request for review, in the virtual session that ended on June 26, 2026, and was proclaimed without change on September 30. It refers to "any of the grounds" of Article 151, without distinguishing among items, and the most direct reading of that cross-reference reaches the article as worded on the day the partners decide to distribute profits. The Court, however, has not addressed the items added by federal Supplementary Law No. 236/2026.
Three further limits deserve attention:
- Who is liable. The penalty under item II of paragraph 1 of Article 32 of federal Law No. 4,357/1964 falls on officers and members of senior management who receive the amounts. Item II does not mention a partner who receives the distribution without holding a management role; for that partner, Article 32 provides no penalty of its own. The legal entity's penalty, under item I, applies in any case.
- Scope. The thesis speaks of bonuses and profit shares, and extending it to other forms of partner compensation requires a basis the thesis itself does not provide.
- Timing. The decision as proclaimed did not modulate its effects. The minutes of the judgment were published in the Court's electronic gazette on October 5, 2026, and the full opinion has not yet been published.
Practical Implication
In practice, the thesis turns a generic question — "does the company owe the Federal Union?" — into three questions answered document by document, and which must reflect the status of each debt on the day of the partners' meeting that approves the distribution of profits. For each federal debt, management states in writing:
- whether the claim is registered as enforceable debt;
- whether there is a ground suspending enforceability, which one, and supported by which document;
- whether there is security in tax foreclosure, in which form and for what term.
An installment plan suspends enforceability for as long as it remains in force, and the law governing each program defines when late payment leads to termination; surety insurance does so for as long as it is compliant and no claim event has occurred. The situation in March may not be the situation in April.
That statement, attached to the minutes approving the distribution, serves two purposes:
- For the partners, it records that the decision to distribute relied on the legal status of each debt.
- For management, which is personally liable for the penalty on what it receives, it is evidence that the review was carried out before the decision to distribute.
The penalty in Article 32 of federal Law No. 4,357/1964 remains, now subject to three verifiable conditions: a debt that is registered, enforceable and unsecured. Management's written statement, debt by debt and dated on the day of the meeting, is what later shows that, for each debt, at least one of them was missing when the partners decided to distribute.
