03 / 07 / 2020

STF decides on a more extensive interpretation of municipalities on the list of services subject to taxation

The Plenary Session of the Supreme Federal Court (“STF”) decided, in a erga omnes decison, that the ISS can also be charged on services not expressly included in the list of services attached to Complementary Law 116/03, as long as they are related to them.

The case in question, RE 784,439, refers to the questioning of the extinct Banco Sudameris Brasil, which chalenged ISS charges from the Municipality of Maceió for services that were not expressly provided for in the lists attached to Decree-Law No. 406/68 and the Law Supplementary Law 56/87, both replaced by Complementary Law 116/03, currently in force. One of Sudameris’ arguments was that the charge violated Article 156 of the Constitution.

In accordance with the decision rendered, the aforementioned list of services contained in Complementary Law 116/03 subject to the ISS tax is mandatory, according to article 156, item III, of the Federal Constitution. However, the possibility of levying the tax on the activities inherent to the services listed in the law was admitted due to the extensive interpretation, since the law itself uses more comprehensive terms when listing the services, such as “counterparts”, “others” and “similar”.

This is an important precedent due to the fact that consolidates a more extensive understanding of the list, which may generate the inclusion of new services within the scope of the ISS incidence, allowing, in practice, that Municipalities will be able to collect the referred tax on a larger list of services.

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