Prado Garcia Advogados is pleased to announce that Dr. Claudia Bärmann Bernard has joined our team as consultant for international, European and German Law, expanding our legal services in international commercial and corporate matters.

Dr. Claudia Bärmann Bernard is a German lawyer and former judge with a doctorate of law. She is fluent in German, English and Portuguese.

Dr. Claudia Bärmann Bernard has extensive experience in international corporate and commercial issues as well as Intellectual Property matters based on her activities in Germany, Brazil and the USA.  In addition, she has a solid background in negotiating and drafting domestic and international contracts, such as trademark and patent license agreements, technology transfer and technical assistance agreements as well as services, sales representative and distribution agreements.

 Her practice will focus on guiding and advising international entrepreneurs and companies on all aspects of founding and administrating a company in Brazil, including but not limited to negotiating and drafting all relevant contracts and documents.

You can reach Dr. Bärmann Bernard via email at or by phone at +55 (11) 3242-8799.

The Brazilian Securities and Exchange Commission (Comissão de Valores Mobiliários – CVM) has just established a new requirement whereby corporations with stock traded in the Brazilian Stock Exchange must disclose the identity of their individual shareholders provided that any such individual shall hold at least a 5% participation in the stock capital of the corporation.

The determination is also compelling to shareholders who directly or indirectly hold a controlling position in any such corporation. The command is extensive to foreign individual shareholders.

Corporate shareholders have been since long subject to such disclosure requirements.

The Brazilian real estate market is booming. Not only in the big cities.

Many Brazilian construction companies are opening up to joint ventures with foreign investors or are going public as corporations with their stocks being issued and traded at the Stock Exchange (BOVESPA).

What would seem impossible some decades ago has become a reality: real estate financing for as long as 30 years. Lower interest rates also play a significant role in this new era for investments in this trade.

The laws have also been changed in order to assure sellers the rign to immediately take back the property if buyer becomes insolvent.

The opportunities are not limited to home construction. Industrial and commercial  buildings, including industrial complexes and plants are on demand.

Residencial complexes, new neighborhoods with all sorts of recreational facilities are popping up in many of the most important cities of the country.

However, it goes without saying that a good business is as good as the individuals and the partners involved in its execution. This is why Prado Garcia Advogados is always attempt to the legal and business aspects of all negotiations involving its clients.

For further information or assistance, please contact us at

By a 9 to 1 vote, the Brazilian Supreme Court has finally deemed unconstitutional a legal requirement whereby any taxpayer would have to post a cash deposit equivalent to 30% of any tax assessment in order for its claim against the assessment to be accepted at an appeal level.

The so-called “prior deposit” represented an unacceptable obstacle to the detriment of taxpayers’ rights to due process in the tax administration level.

The Court’s decision rendered unconstitutional paragraphs 1 and 2 of article 126 of Law 8.213/91, as amended by Law 9.639/98.

Consequences of the Decision:

A first consequence: the Government may no longer claim that the legal requirement for such prior deposits remains valid.

A second consequence is in the effects of this Court’s decision on all those cases where the taxpayer timed filed his, hers or its appeal against an administrative decision sustaining the tax assessment, but did not make the prior deposit for the appeal to be accepted.

In view of the fact that the taxpayer may have filed a timely appeal to the tax administration,  any claim by the Government that it would have a lawful tax credit against the taxpayer could and can be disputed as the case arises.

Suits filed by the Government to collect such “tax credits” against the taxpayer may be confronted on the grounds that the intended credit is not a valid tax credit because of violation of due process at the administration level.

In all actions taken on behalf of its clients, Prado Garcia Advogados has always sustained that the prior deposit requirement could not be accepted under the Brazilian Constitution which expressly adopts the  due process of law principle as a constitutional guarantee.

Brazilian exporters are legally entitled to use or to transfer the State ICMS tax which is excluded from their exports to foreign countries. This right is granted by Complementary Law 87/96, known as Law Kandir.

The amounts corresponding to the ICMS tax exclusion may be assigned to other ICMS taxpayers and may also be used as currency for payment to suppliers.  

The purpose of the law is to relieve exports from local taxes and help Brazilian exporters to compete abroad.

However, Brazilian exporters may end up with more ICMS tax credits than they may use internally in offsetting their ICMS tax debts deriving from sales in the local Brazilian market.

As these credits are equivalent to cash, they would be entitled to assign and transfer their credit rights to other ICMS taxpayers. However, some State Governments raise obstacles to the use or to the assignment and transfer of such ICMS tax credits. One of such obstacles is the imposition of a time schedule for the use of the credits rather than accepting its immediate use.  

As Law Kandir is in a higher constitutional level as compared to an ordinary law, the State laws restricting the implementation of the tax credit use or transfer are not valid.

This is why Prado Garcia Advogados recommends its clients to seek the judicial remedies in order to overcome such illegal restrictions. Mere pleas to the State administration would be useless under such circumstances.

By a vote of 6 to 4 of its eleven judges, the Supreme Court in Brasilia ruled to confirm a previous 2004 decision of a now retired member of the Court against the Federal Government. The Government had asked the Court to overule a Superior Court of Justice judgement which recognized a tax exemption that the Government sustains to have been revoked.

The tax exemption was granted by Complementary Law 70/91 involving the federal tax named COFINS for professional service companies.

This confirmation represents a defeat to the Government in its attempts to overule the Superior Court of Justice decisions on the matter, and it will represent an additional burden for the Government in its efforts to submit the issue to the Supreme Court from a constitutional angle.

The Government sustains that the tax exemption granted by Complementary Law 70/91 was revoked by the Ordinary Law 9.430/96, on the grounds that the former one was materially an ordinary law.

Prado Garcia Advogados – Lawyers and Consultants point our, however, that an option made by the Brazilian Congress to adopt a Complementary Law where an ordinary would suffice is a political decision protected by the checks and balances principles under the Brazilian Constitution, among other grounds.

A Federal Judge in the Federal Regional Court for the First Region (TRF- 1ª Região) in Brasilia issued an order by request of a company headquartered in the State of Minas Gerais, allowing it not to include a state tax (ICMS) on the tax basis of two federal taxes, namely COFINS and PIS. The merits of the case shall be addressed by the other members of the same group of federal judges in the Court.

As informed by the TRF-1 press section, the company (in the textile business) filed a suit requesting a preliminary decision in order to avoid paying COFINS and PIS taxes on the amounts of the State tax. The  trial judge denied the request, thereby motivating a recourse to the Federal Court, where its plea was then granted.

The Court judge, Maria do Carmo Cardoso, who granted the order, stated that the case demanded an urgent decision in view of the fact that the operational activities of the company would be impaired if it had to go on paying the federal taxes as they have been assessed. The order would, in addition, prevent the company from being submitted to the legal penalties.

A similar case is pending in the Supreme Court in Brasilia, on the grounds that the inclusion of the State tax (ICMS) on the tax basis of PIS and COFINS is a violation of Article 195, I of the Brazilian Constitution. These two federal taxes would have constitutional permission to charge solely the amount of the sales of merchandise and services invoiced by the taxpayer, but not a tax value which represents a State revenue.

The Court decision favors solely the party seeking for Court relief. Any other company interested in pursuing the same rights would have to file its own suit. Claiming tax credits for the past five years is also advisable and a legal right for any taxpayer submitted to illegal or unconstitutional tax levies.

The precedent is the “Agravo de Instrumento 2007.01.00.000928-4”