I – Editorial

Dear friends and clients,

we hope everyone is well and healthy. Here are some interesting articles from the legal world.

The first article in this edition deals with “Liability of the guarantor partner after its withdrawal from the company”, which brings a reflection on how the partners of companies should act when they withdraw from the company.

In the article on the long-awaited “Brazil- Switzerland agreement to avoid double taxation approved by the Senate”, we highlight some relevant points.

In the article on “Provisional Job Stability of Disabled Employees due to Pandemic”, we warn of the necessary care in the dismissal of people with disabilities in this period.

Good reading! The Stüssi-Neves team is at your disposal for any further explanation you may require.

With kind regards,

Gustavo Stüssi Neves

II – Articles

1. Liability of the guarantor partner after its withdrawal from the company

In commercial relations, it is common for creditors to demand that a partner of the company be the guarantor of the company’s obligations. A problem may arise when the guarantor partner withdraws from the company. Is he still liable for the company’s debt?

Recently, in the judgment of Civil Appeal No. 1131703- 72.2016.8.26.0100, the 26th Chamber of Private Law of the Court of Appeals of the State of São Paulo (“TJSP”) determined the maintenance of the liability of the partner who guaranteed the company’s debt, even after his withdrawal, due to the lack of extinction of the guarantee or consent of the creditor to the substitution of the guarantor, subject to any right of recourse that the latter may have against the debtor and its current partners.

In this case, the guarantor was surety in a lease agreement to which the company was party and sold his corporate participation before there was any default under the contract. On the sale, the buyers assumed responsibility for all the company’s debts.

However, it is possible that the withdrawing partner may be released from his liability as guarantor. Ideally, the contract with the third party containing the guarantee should establish conditions for his replacement in the event of withdrawal of the guarantor partner. In the absence of such a provision, the recommended course of action is for the guarantor, together with the company, to approach the creditor prior to any default, informing the latter of his withdrawal from the company and offering a substitution of the guarantee.

If the creditor refuses, it is possible to obtain an exoneration of liability by means of a lawsuit, demonstrating the guarantor’s good faith and that the reason for granting the guarantee no longer exists.

Lucas Maia e Thiago Stüssi Neves F. de Abreu
Associate lawyers in the Civil Area – Rio de Janeiro
lucasmaia@stussi-neves.com and thiagostussi@stussi-neves.com

2. Brazil-Switzerland agreement to avoid double taxation approved by the Senate

The text of the Agreement, which had already been approved in Switzerland in 2019 by the Council of States (Ständerat) and the National Council (Bundesrat), was approved in Brazil both in the House of Representatives, on March 5, 2020, and in the Federal Senate, on February 24, 2021, and now depends only on publication by means of a Presidential Decree to start producing legal effects in Brazil.

In its 30 articles, the Agreement regulates some of the main issues involving cross-border tax relations, eliminating uncertainties and distortions and encouraging the flow of investment from individuals and companies between the two countries, among which we highlight:

a) Inclusion of the following Brazilian taxes (i) IRPJ (Corporate Income Tax); (ii) IRPF (Personal Income Tax), and (iii) CSLL (Social Contribution on Net Profit) – which is expressly provided for in the Agreement – and the recognition on the Swiss side of the inclusion of cantonal taxes in its scope;

b) Besides aiming to avoid double taxation and possible double non-taxation, and containing a general anti-abuse clause (“Limitation of Benefit or simply LoB Clause”), the Agreement includes both transparent entities (partnerships, trusts) and collective investment vehicles (investment funds);

c) Although until now dividends have not been taxed at source in Brazil, the Agreement includes a provision that reduces to 10% the withholding tax (IRRF) on dividends paid to the beneficial owner of a company that holds at least 10% of its capital;

d) With regard to interest, it determines the reduction of the IRRF rate to 10% on interest on loans granted for a minimum term of 5 years, granted by banks for the purchase of equipment and/or investment projects;

e) Royalties are also now subject to the reduced rate of 10%, except for those arising from the use, or right of use, of industrial and commercial trademarks; and

f) Technical services were given a specific definition, which no longer includes services of an administrative or scientific nature. The IRRF rate here has also been limited to 10% – lower than the general Brazilian rule, which provides for a rate of 15%;

The tax team of Stüssi-Neves Advogados are following closely the publication by Presidential Decree and are available to answer any questions regarding the Agreement

Arthur Stüssi Neves
Partner in the Tax Area – Rio de Janeiro

3. Provisional Job Stability of Disabled Employees due to Pandemic

At the end of 2019 and beginning of 2020, the world observed the disastrous trajectory of the Sars-Cov-2 Coronavirus, which infected thousands of people in the city of Wuhan, China, and spread to several provinces in that country, and then around the world.

In Brazil, the Ministry of Health published, on February 3, 2020, Ordinance (Portaria) no. 188/2020, which declared a Public Health Emergency of National Importance (ESPIN), due to Human Infection by the new Coronavirus (2019-nCoV).

On February 6, 2020, Law no. 13.979/2020 was published, containing measures for countering the ESPIN, due to the outbreak of the virus. The Law has suffered subsequent changes.

Portaria no. 188 of February 3, 2020, of Ministry of Health, accessed on February 10, 2021. (https://www.in.gov.br/en/web/dou/-/portaria-n-188-de-3-de- fevereiro-de-2020-241408388)

On March 11, 2020, the Director-General of the World Health Organization, Tedros Adhanom Ghebreyesus, declared the existence of a pandemic, resulting from COVID-19, motivating the Brazilian National Congress to establish a state of calamity, until December 31, 2020, through Legislative Decree no. 6/2020. A series of Provisional Measures (MPs) were issued in order to counter the pandemic.

One of the MPs was no. 936, converted, on July 6, 2020, into Law no. 14.020/2020, which created the so- called Emergency Program for the Maintenance of Employment and Income, and provided, in article 1, for complementary measures to combat the public health emergency caused by the coronavirus.

When MP no. 936 was converted into Law 14.020, article 17 was introduced, which prohibits the unjustified dismissal of disabled persons while the state of calamity persists. This category of employees was not singled out in the texts of the MP or of Law 13.979/2020 and its subsequent amendments.

It is an undoubted fact that persons with disabilities deserve differential treatment, in order to provide them with protection and ensure their inclusion in society and in the job market, as in Law no. 8.213/91, which provides for the mandatory hiring of these persons, pursuant to a pre-established quota.

Note that the social security legislation imposed, on a permanent basis, an obligation on the employer to hire a certain number of persons with disabilities, unlike article 17 of Law no. 10.020/2020, which guarantees protection to this group of employees only for the duration of the state of calamity due to the COVID-19 pandemic.

However, the state of calamity, which is the subject of Legislative Decree no. 06/2020, was not extended by the National Congress and, furthermore, Justice Ricardo Lewandowski of the Federal Supreme Court (STF), when hearing Direct Unconstitutionality Action (ADI) no. 6.625 MC/DF, maintained the validity of a number of articles of Law no. 13.979/20, but made no reference to the provision dealing with persons with disabilities. From this standpoint, there would be no question of stability of employment for this category of employees.

On the other hand, termination, on December 31, 2020, of the validity of Legislative Decree no. 6/2020, to which Law no. 13.979/20 is linked, unfortunately did not put an end to the state of calamity and the hardship imposed by the Sars-Cov-2 Coronavirus, reported on a daily basis by all the media. On the contrary, Brazil still faces great difficulties in combating COVID-19, which takes the lives of hundreds of people every day, and incapacitates many others.

This fact was stressed by Supreme Court Justice Ricardo Lewandowski, in the decision rendered in ADI no. 6.625 MC/DF. He considered that it was prudent and advisable that the exceptional measures contained in Law no. 13.979/2020 be maintained to combat the pandemic. The STF also ruled that the States may, through their Legislative Assemblies, decree the maintenance of the state of public calamity, as done by Minas Gerais (Decree no. 48.102/2020), Paraná (Decree no. 6.543/2020) and Tocantins (Decree no. 6.202/2020), besides several Brazilian municipalities.

Another question comes up. In view of the state and/or municipal decrees, which extend the state of public calamity, is it possible to maintain the employment of persons with disabilities, as provided for in item V, article 17, of Law no. 10.020/2020?

The exclusive competence of the Federal Government to legislate on Labour Law, provided for in art. 22, I, of the Constitution of 1988, prevents state or municipal governments from doing so. However, in this specific case, the federal law exists and may be applied, in theory, since the state of calamity remains.

The discussion on the subject is still far from over, and, little by little, lawsuits are reaching the Courts seeking the reinstatement of persons with disabilities dismissed after the enactment of Law no. 10.020/2020.

We suggest caution, therefore, when dealing with this issue, taking care to verify possible collective rules issued during this period and that may have regulated the matter in a similar or even wider manner than the law under comment.

Renata Gallo Tabacchi Gava de Oliveira e Patrícia Salviano Teixeira
Associate lawyers in Labour Law Area – São Paulo
renata.gallo@stussinevessp.com.br and patricia.salviano@stussinevessp.com.br