Brazil’s Supreme Federal Court (STF) suspended a virtual trial examining the taxation of Vale’s foreign profits after Minister André Mendonça filed a destaque on Friday, August 28, 2026.
The case, which began in March 2015, centers on whether the federal government can levy corporate income tax (IRPJ) and social contribution on net profits (CSLL) earned by Vale’s controlled subsidiaries in Belgium, Denmark, and Luxembourg. The dispute had reached a preliminary 6-4 vote in the virtual plenary, with Minister Gilmar Mendes siding with the Union’s appeal based on a 2023 Federal Revenue technical note estimating the matter’s economic-financial impact at R$ 142.5 billion for 2017-2021 and R$ 28.5 billion annually thereafter.
Mendonça’s request halts the virtual proceedings and transfers the case to the STF’s physical plenary, where the vote will restart without a set timeline. Mendes, in his February 2023 cited note, referenced a 2010 precedent (RE 541.090) supporting the taxation of profits from controlled foreign entities in non-tax-haven jurisdictions.
Tax partner Renata Emery at TozziniFreire Advogados characterized the suspension as timely, stating it would elevate the case’s importance by moving it to the physical plenary. The STF’s decision follows years of legal contention over the scope of Brazil’s tax authority on multinational corporate earnings abroad.
