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11 / 08 / 2021

DISPUTE OF THE THESIS OF THE EXCLUSION OF ICMS FROM THE PIS/CONFINS BASE STILL FAR FROM THE END

In recent weeks, the Federal Government has demonstrated that it still intends to maintain several disputes with taxpayers regarding the thesis of the exclusion of ICMS from the PIS/COFINS calculation basis, also known as the “thesis of the century” due to its legal importance and huge financial impact.

In May 2021, the Federal Supreme Court ruled the last appeal of the National Attorney’s Office on the thesis. There was great expectation since this judgment was treated as the last chance of reversing the jurisprudence hitherto favorable to taxpayers. Then, the last two pending cases of the leading case were defined, (i) that the credits to be recovered by taxpayers could be calculated based on the ICMS highlighted in the invoices, and (ii) that the effects of the decision would be modulated for validity from 2017, date of the first decision of the thesis in the Supreme Court. With that, it was hoped that the matter would be closed.

However, in recent weeks the Federal Government has shown itself to be combative. For example, it was reported that the Internal Revenue Service fined companies that managed to exclude ICMS from their PIS/COFINS calculation. The tax assessment notices were drawn up under the argument that the PIS/COFINS credits should also be calculated excluding the ICMS embedded in the expenses that generate the credit. In addition, the Attorney’s Office also obtained favorable decisions to review cases with final and unappealable judgment that obtained the right to recover taxes prior to 2017.

Therefore, caution is still recommended for all contributors who have already taken advantage of or intend to take advantage of this definition of the thesis of the century. By starting to offset the credits arising from favorable court decisions finally final and unappealable, taxpayers may face new fronts for discussing the matter with the tax authorities.