Alert: ICMS on PIS and COFINS tax base to be decided in December
Toffoli scheduled the trial of the motion to modulate the effects of ICMS exemption from PIS and COFINS tax base for December 5.
Minister Dias Toffoli, president of the Brazilian Federal Supreme Court (STF), scheduled the trial of the motion for clarification filed against the judgment exempting the State Goods and Services Tax (ICMS) from the Social Integration Program (PIS) and (Social Security Financing Contribution (COFINS) tax base for December 5. With a general repercussion, the appeal was decided on March 2017, and the motion was filed on October 2017, one month after the appellate decision’s publication.
On the occasion of the appeal, STF decided that incoming ICMS in business accounts cannot be considered revenue, since it is the mere payment of tax paid by consumers. Therefore, ICMS cannot be taken into consideration when calculating PIS and COFINS, social contributions accrued on businesses gross revenue or sales revenue.
This judgment has obviously displeased the Federal Government, which estimated that the impact of ICMS exemption from PIS and COFINS tax base would be of R$250 billion in five years, though it did not present evidence of this conclusion.
Warning: act fast
In the Federal Government’s motion, the Office of the General Counsel for the National Treasury prays the STF to modulate the effects of its judgment, i.e., so that the Supreme Court’s judgment is not retroactive.
Should the STF accept to modulate the effects, businesses that do not go to court before December 5, date of the motion for clarification trial, will lose, once and for all, the last opportunity to exempt ICMS from PIS and COFINS tax base levied upon prior to the motion decision.
Mauricio Nucci, Vaz de Almeida Advogados’ Tax Litigation manager, and his entire team are ready to answer questions and suggest the most appropriate legal measures to each particular case.