Tax Liability of Shareholders: Legal Limits on Enforcing Company Debts Against Personal Assets

This article aims to analyze the circumstances in which the law allows tax debts originally owed by a company to be charged from its shareholders, as well as how Brazilian courts have interpreted and applied these rules.

This topic is highly relevant for shareholders of legal entities with tax liabilities, as it represents a risk that such charges may reach their personal assets. Its analysis is therefore important to help shareholders identify and challenge potential abuses.

Companies are entities endowed by law with their own legal personality, a characteristic that grants them contractual, procedural, and patrimonial autonomy in relation to their shareholders.

As a result of this attribute, in contracts entered into, it is the legal entity itself that assumes obligations or contracts the supply of goods or services, not its shareholders (contractual autonomy); in lawsuits it files or that are filed against it, the company occupies one of the parties, not its shareholders (procedural autonomy); thus, when the company receives revenue or needs to make disbursements to settle a debt, it is its own assets that increase or decrease, and such assets are not commingled with those of its shareholders (patrimonial autonomy).

Therefore, as a rule, company debts, including those enforced judicially, must be satisfied with the company’s own assets. For this reason, attachments are carried out on bank accounts, vehicles, and real estate linked to its corporate registration for subsequent auction and debt payment. However, various laws provide for situations in which the debt may be required from the shareholder, allowing their personal assets to be subject to attachment and sale.

The Brazilian National Tax Code (“CTN”) is an example of legislation that creates exceptions to the rule separating the obligations and assets of the company and its shareholders in certain situations.

By defining tax as a compulsory pecuniary payment, in currency or whose value can be expressed in it, that does not constitute a penalty for an unlawful act, instituted by law and collected through fully bound administrative activity, Article 3 of the CTN makes clear that paying taxes is a type of obligation. Additionally, Article 133 of the CTN clarifies that this obligation will be principal when it arises from the occurrence of the taxable event (i.e., a real-world event defined by law as necessary and sufficient to give rise to the obligation) and has as its object the payment of tax, and ancillary when it involves an act or omission of interest to tax collection.

As a result of the taxable event, a tax obligation arises that legally binds two parties: on one side, a public entity (Federal Government, States, Municipalities, Federal District), which will be the active subject (creditor); and, on the other, a private party, which will be the passive subject (debtor). This is the case, for example, of the Motor Vehicle Property Tax (“IPVA”): the person (individual or legal entity) who owns a motor vehicle on January 1 of each year fits the taxable event and is therefore required to pay the tax, while the State is entitled to receive it.

The CTN provides that the passive subject of the principal obligation may be classified as a taxpayer when they carry out the act that triggers the tax, or as a liable party when the obligation arises from a legal provision.

However, the CTN allows the attribution of this obligation to a third party connected to the taxable event through the mechanism of tax liability. It is worth noting that the Superior Court of Justice (“STJ”) has settled the understanding that mere nonpayment of tax obligations does not, by itself, give rise to shareholder liability, as established in Precedent No. 430/STJ.

Tax liability must be grounded on succession (Articles 130 to 133 of the CTN), as in the case of a company that incorporates another and becomes liable for its taxes; on acts of representation (Article 134 of the CTN), such as when a company is liquidated and its former shareholders are burdened with obligations; or on acts performed with excess of powers or in violation of the law, articles of association, or bylaws (Article 135 of the CTN).

It is important to emphasize that merely being a shareholder of the debtor company does not authorize tax liability. The CTN is clear in stating that only shareholders with management powers who have committed illegal acts or abused their powers may be held liable. Even former shareholders may be held liable, provided they had management powers at the time of the unlawful or abusive act.

Judicial practice shows that the most commonly invoked basis by tax authorities to hold shareholders liable is the alleged practice of acts with excess of powers or in violation of the law, articles of association, or bylaws. This includes, among other situations, the failure to transfer to public authorities taxes withheld at source and the irregular dissolution of the company.

The termination of a company’s activities must be formalized by the shareholders through registration of the dissolution instrument with the Board of Trade, followed by a liquidation procedure in which the company’s credits are collected and its debts settled. Failure to comply with this procedure results in irregular dissolution and constitutes a legal violation that authorizes the liability of managing shareholders. Precedent No. 435/STJ establishes that a company is presumed to have been irregularly dissolved if it ceases to operate at its registered address without prior notice to the competent authorities.

It is important to note that shareholder liability may arise at two moments: before the filing of a tax enforcement action or during the course of such action.

Failure by the company to pay a tax results in a credit for the relevant public entity, which is formalized in a document called a Certificate of Active Debt (“CDA”), forming the basis for the filing of a tax enforcement action.

An essential element of the CDA is the identification of the debtor and any co-liable parties. However, the proper inclusion of a liable party presupposes a prior administrative procedure to attribute liability, ensuring the right to adversarial proceedings and full defense. In the federal sphere, this procedure is regulated by specific administrative rules issued by the Federal Revenue Service and the Attorney General’s Office of the National Treasury.

Nevertheless, it is often observed that tax authorities disregard the need for a prior procedure and improperly include shareholders. In some cases, individuals are included who were not even managers at the time of the alleged wrongful act.

This situation becomes even more serious due to the precedent established by the STJ, according to which, if the enforcement action is filed only against the company but the shareholder’s name appears in the CDA, the burden falls on the shareholder to prove that none of the circumstances set forth in Article 135 of the CTN occurred.

In any event, the inclusion of the shareholder’s name in the CDA allows the enforcement action to be filed against both the company and the shareholder.

On the other hand, there are situations in which the CDA names only the company as debtor and the enforcement action is filed solely against it. However, during the course of the proceedings, tax authorities may attempt to hold shareholders liable.

Although the law allows the amendment or replacement of the CDA before a first-instance decision, this cannot be used to substitute the original CDA with a new one that includes the shareholder as a liable party, as this would alter the debtor and the tax assessment itself. The STJ has established that such substitution is only allowed to correct material or formal errors.

Even when only the company is named in the CDA, courts allow the redirection of the enforcement action to managing shareholders if circumstances giving rise to tax liability are identified. If granted, shareholders become defendants and are subject to asset attachment.

It is important to stress that shareholder liability requires both a wrongful act and management powers. However, tax authorities often request redirection without adequately demonstrating these requirements, and sometimes outside the applicable time limits.

The STJ has ruled that requests for redirection are subject to a five-year statute of limitations. In cases of irregular dissolution, if it occurred before the company was served, the period is counted from the order for service. If it occurred afterward, the period begins from the date of the wrongful act.

It is also worth noting that the legality of this redirection mechanism is debated, especially in light of the Civil Procedure Code, which introduced a specific procedure for piercing the corporate veil: the Incident of Disregard of Legal Personality (“IDPJ”).

The IDPJ is a procedural mechanism aimed at determining whether the legal requirements for extending a company’s obligations to its shareholders are met. This is essentially what occurs in redirection, which is why taxpayers argue that tax authorities should follow this procedure, ensuring due process and the right to defense.

Tax authorities, however, argue that the IDPJ is incompatible with the tax enforcement system. The STJ will decide this issue in a pending case, determining whether the IDPJ applies and under what circumstances it is required.

The use of the IDPJ represents an important safeguard, as it provides a formal procedure with opportunities for defense and evidence production, thereby increasing legal certainty for shareholders.

The issue remains unsettled, but it is expected that the STJ will recognize the compatibility and necessity of the IDPJ in cases of tax liability.

III. CONCLUSION

In light of the above, tax law provides for situations in which shareholders may be held liable for company tax debts. However, this does not mean a complete disregard of the separation between company and shareholder assets, as liability is limited to managing shareholders who commit unlawful acts or abuse their powers.

Nevertheless, judicial practice shows that various abuses occur due to the failure to observe legal requirements, particularly through the indiscriminate use of enforcement redirection.

It is therefore expected that the STJ will rule that the Incident of Disregard of Legal Personality is compatible with tax enforcement proceedings and essential to ensure lawful attribution of liability, safeguarding legal certainty and the right to defense.

In any case, this is a complex issue with many particularities, making specialized legal assistance essential to prevent abuses and improper asset constraints against shareholders.

Belém/PA, March 24, 2026.

AUTHORS

Eduardo Tadeu Francez Brasil
Eduarda Borges
Vinícius Morais de Souza

NOTES

1. COELHO, Fábio Ulhoa. Curso de Direito Comercial, volume 2: direito de empresa: sociedades. São Paulo: Thomson Reuters Brasil, 2024.

2. Brazilian Civil Code, Article 49-A.

3. STJ Precedent No. 430.

4. PAULSEN, Leandro. Curso de Direito Tributário completo. 15th ed. São Paulo: SaraivaJur, 2024.

5. STJ Repetitive Theme No. 962.

6. STJ REsp No. 1.732.057/SP.

7. STJ Repetitive Theme No. 630.

8. STJ REsp No. 1.371.128/RS.

9. STJ Precedent No. 435.