The Brazilian tax system is grounded in Constitution Text like no other in the
world. Due to the importance of cooperative societies in the history of the Brazilian
economy, especially in the agricultural sector, the Republic of Brazil´s Federal
Constitution, supra legem, enacted in 1988, established the co-operatives societies
creations as right and guaranteed being prohibited, direct or indirectly, estatal
interference in their functioning.2
This significant recognition is expressed in the prevision that a supplementary
law shall establish general rules about the tributary subject mainly for the cooperative
acts of cooperative societies3. And the taxation can only occur by supplementary law.
As a result of the advent of the new Constitution the biggest problem to be
resolute by the lawyer was the harmony of the Brazilian legal system.
The solution found was to accept those laws that do not contradict the
Constitutional provision. As an example, one can quote the National Tax Code, also in
force, enacted in 1966, reception and considered like a supplementary law due to its
compatibility with the Constitution.
The co-operatives law was not treated the same way the National Tax Code
did, showing that the Three Powers did not follow the same logic. This situation has not
only caused a juridical insecurity as also as a major misunderstanding among judges of
different levels and it has never been subject to government regulation.
In Brazil the co-operatives societies are ruled by an ordinary law from 1971, still
in force, called Lei das Sociedades Cooperativas. This law refers only to co-operative
The co-operatives societies special law enlighten that the co-operative act does
not imply in market act, neither in sales contracts.5 There is no taxation over cooperative act profit. As so, these organizations have spread over all the line of
Tax Law is one of the most important branches of law in Brazil, considering that
it is a country that has one of the largest tax burdens in the world.
BECHO, Renato Lopes. Tributação das cooperativas. 3. ed. ver., ampl. e atual. São Paulo: Dialética, 2005. p. 193.
Presidência da Republica Federativa do Brasil. Constituição da República Federativa do Brasil (1988), section 5, XVIII.
Retrieved June 14, 2011, from
3 MARTINS, Ives Gandra esclarece: “A letra c do inc. III traz a novidade de incluir o ato cooperativo no campo exclusivo da
regulamentação por lei complementar.” (Bastos, Celso Ribeiro, Martins, Ives Gandra. Comentários à Constituição do Brasil :
promulgada em 05 de outubro de 1988. v. 6. t.1. São Paulo: Saraiva, 1989. p.98)
4 Presidência da Republica Federativa do Brasil. Lei Ordinária nº 5.764 (1971), section 79. Retrieved June 14, 2011, from
Presidência da Republica Federativa do Brasil. Lei Ordinária nº 5.764 (1971), section 79. Retrieved June 14, 2011, from
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According to Federal Constitution a company in Brazil can pay up to
approximately 13 different types of taxes6. Even so, Brazil is among the largest
economies in the world.
The talks theme limited to the tribute will be called Social Contribution on Net
Income, which was created to finance social security7. Probably this tribute does not
exist in many countries.
But, what´s the relationship between the Profit Taxation Law and Consumer Cooperatives?
History begins on May 19, 1954, when Rhodia employees constituted a
consumer co-operative society, called Cooperativa de Consumo das Companhias
Rhodia, Rhoiaceta e Valisère – Cooper Rhodia, with 292 members. In 1988 Cooper
Rhodia members already had reached 204,055 associates and was located in 4 (four)
cities that combined had over 2,000,000 inhabitants. 8
At present this co-operative is called COOP – Cooperativa de Consumo and it
has around 1.550.000 members, being considered the Brazilian most important
consumers co-operative.9
At the same year of Constitution’s promulgation, it was established the Law
7689, the Social Contribution on Profit of corporations intended to finance social
security.10 However, this law did not exempt taxation of cooperative societies, which
clearly contradicts the principle of cooperative acts due to the fact that the practice of
cooperative acts does not imply in the Social Contribution taxation.
On the other hand, there is no doubt that the sale of goods should be tributed
and the positive result that arises from this activity should be submitted to the social
Despite of the Federal Constitution’s foresight and its special law, the Federal
Administration do not use correctly the law, therefore harming Co-operative societies,
partners and community. The administration has not yet availed itself in order to
resolve those cases. In all of them the judicial actions are not well appreciated for
singular judge.
Immersed in a legal system sometimes contradictory, the Brazilian cooperatives
often are faced with injustices.
Presidência da Republica Federativa do Brasil. Constituição da República Federativa do Brasil (1988), section 153, 154, 155
e 156. Retrieved June 14, 2011, from
Presidência da Republica Federativa do Brasil. Lei Ordinária nº 7.689 (1988). Retrieved June 14, 2011, from
MEDICI, Ademir. COOP: 50 anos de história (2004), 320.
MEDICI, Ademir. COOP: 50 anos de história (2004), 320.
PÊGAS, Paulo Henrique Barbosa. Manual de contabilidade tributária: análise dos impactos tributários das Leis n° 11.638/07,
11.941/09 e dos pronunciamentos emitidos pelo CPC (2011), 776.
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By the regime of real profit the social contribution is calculated based on net
income. The calculation basis of social contribution is the amount of profit for the
period, quarterly or annual basis, before provision for income taxes and additions and
deletions legal.
Net income for the calculation period is the sum of operating income of nonoperating income and equity.11
Due to the growth of the Consumer Co-operatives, the Brazilian government
throughout the Federal Administration, changed the law in order to preserve the taxes
collection from the Co-operatives. As a result, the government started to collect a tax
on profit although co-operatives do not aim profit.
In accordance with section 69 by the law 9.532, since December 10, 1997:
“Section 69. The consumer cooperative societies,
which have as their object the purchase and supply of
consumer goods, are subject oneself to the same
standards of incidence of taxes of the Union attribution
applicable to other legal entities.”
At the present moment the consumer cooperatives joined a number of legal
measures to protect their rights and to declare this section unconstitutional, however
these attempts were thwarted.
Nevertheless, the Legislature response, was the follow law:
“Cooperative societies that meet the provisions of
specific legislation in respect of cooperative acts are
exempt from the Social Contribution on Net Income CSLL.”
“Sole Paragraph. The provisions set forth in this
Section shall not apply to cooperative societies of
consumption mentioned in art. 69 of Law 9532 of
December 10, 1997.”12
A measure that should reach only acts come to an end affecting all cooperatives societies.
A cooperative that want to join a lawsuit declaring enforceability of taxation
should instruct its petition with the accounting based on the constitutional theory of the
co-operative act.
FABRETTI, Láudio Camargo. Contabilidade Tributária (2007), 346.
Presidência da Republica Federativa do Brasil. Lei Ordinária nº 10.865 (2004), section 39. Retrieved June 14, 2011, from
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The path to be covered by the judicial co-operative society is not effortless
considering that the social contribution of federal jurisdiction to a federal court judge will
fit this type of action.
Thus the action shall be brought in the base Court of the Federal Court13, which
usually at the final judgment denies the request. The appeal of the action is sent to the
Federal Court, which usually also denies the request. In this case, it may be appealed
to the Superior Court of Justice with the writ of a certionary. If the decision of Superior
Court violates a state law or the Federal Constitution the judgment will take place on
the Supreme Court.14 All these proceedings will take at least 10 years. Just after the
juridical procedure the co-operative societies will have their constitutional right
Author: Rafael Carvalho Cunha
Lawyer. Serviço Nacional de Aprendizagem do Cooperativismo no Estado de São Paulo
Rua Treze de Maio, 1.376 – Bela Vista
CEP 01327-002 – São Paulo/SP – Brazil
Phone: +55-11-3146-6296 Fax +55-11-3146-6262
[email protected]
Presidência da Republica Federativa do Brasil. Lei Ordinária nº 5.869 (1973), section 86. Retrieved June 14, 2011, from
Presidência da Republica Federativa do Brasil. Constituição da República Federativa do Brasil (1988), section 102, III.
Retrieved June 14, 2011, from
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The incorrect profit taxation on consumer co