By Thaís Dechandt and Letícia Nunes
The Brazilian Federal Supreme Court (STF) has concluded the judgment of Direct Action of Unconstitutionality (ADI) No. 4395, which examined the constitutionality of FUNRURAL contributions payable by individual rural producers and the corresponding subrogation obligation imposed on purchasers of agricultural products.
At its session held on October 15, 2026, the STF Plenary declared Article 25 of Law No. 8,212/1991 formally unconstitutional. This provision governs the social security contribution payable by individual rural employers, levied on gross revenue from the sale of their agricultural production.
The prevailing position was based on the intermediate opinion delivered by Justice Dias Toffoli, according to which the essential elements defining the tax obligation were only fully established with the enactment of Law No. 13,606/2018, which introduced the Rural Tax Regularization Program (PRR). Consequently, the collection of this contribution lacked a sufficient legal basis for periods prior to January 1, 2018.
As a result, the Court also declared unconstitutional, for periods prior to January 1, 2018, the subrogation obligation imposed on purchasers of agricultural products under Article 30, item IV, of Law No. 8,212/1991.
Furthermore, the Supreme Court upheld, by majority vote, the constitutionality of FUNRURAL contributions payable by individual rural producers classified as individual contributors or special insured persons, as provided for in Article 12, items V and VII, of Law No. 8,212/1991.
It is worth recalling that the contributions in question are payable by individual rural producers or employers and are calculated on the gross revenue derived from the sale of agricultural production. In the case of individual rural employers, this contribution replaces the social security contribution levied on payroll, pursuant to Article 25 of Law No. 8,212/1991.
Additionally, under Article 30, item IV, of the same law, purchasers of agricultural products — including purchasing companies, consuming companies, consignees, and cooperatives — assume, by operation of law, the producer’s obligations and are required to withhold and remit the contribution on the producer’s behalf.
The ruling brings an end to a prolonged period of legal uncertainty surrounding the matter. ADI No. 4395 was originally filed in 2010, and its judgment only began in the STF’s virtual plenary session in 2020.
During the proceedings, which extended through 2022, the majority of the Court initially supported the constitutionality of the contributions at issue, in line with the precedent established under Theme 669 of the General Repercussion system. However, the constitutionality of the subrogation obligation remained unresolved.
The judgment was subsequently suspended so that the final decision could be formally announced during an in-person session, which ultimately took place on October 15, 2026.
Regarding the potential limitation of the ruling’s temporal effects (modulação dos efeitos), Justices Dias Toffoli and Edson Fachin, who proposed applying such limitations at this stage, were outvoted.
The majority decided not to limit the temporal effects of the ruling for the time being, while leaving open the possibility of addressing this issue at a later stage.
The publication of the Court’s written judgment is now awaited, along with any potential motions for clarification (embargos de declaração), through which the Brazilian National Treasury may request limitations on the temporal effects of the decision.
Nevertheless, taxpayers are advised to review information concerning previously filed lawsuits, any judicial deposits made, and the status of their compliance with the relevant contribution obligations, particularly for periods beginning in 2018.
The Tax Litigation team at Marins Bertoldi Advogados continues to monitor developments related to this judgment and remains available to provide further clarification.
