The Brazilian Supreme Court (STF) concluded yesterday (05/13), the judgment of the Motion for Clarification on RE # 574.706/PR, in which the thesis that the ICMS does not make up the PIS and COFINS tax base was established.
In the Motions to Appeal, the National Treasury sustained, among other issues, that it was necessary to clarify whether each taxpayer was entitled to exclude the result of the full assessment of the tax or the portion of the ICMS to be collected at each stage of the circulation chain.
It also sustained the modulation of the effects of the decision, requiring it to produce general effects only after the analysis of the motions for relief, which would prevent the companies from recovering the amounts overpaid prior to 05/13/2021.
The Court, by majority vote, decided that the ICMS to be excluded from the PIS and COFINS bases is the one highlighted on the invoice, and not the net (collected) one as the Federal Revenue Service intended. As for the past, the Court modulated the effects of the decision, adopting a slightly more conservative position, but still favorable to companies, determining that PIS and COFINS overpaid after March 15, 2017, the date RE 574.706 was judged and the thesis with general repercussion was established, except for judicial and administrative actions filed until the date of the session in which the judgment was rendered, in which case the amounts prior to this date may be recovered, respecting the 5-year statute of limitations.
Taking into consideration the STF's decision, let's see below the possible concrete situations, and the solutions that may be applied to each case:
1) Actions filed until 03/15/2017: the company may refund the past amounts after the action has become final and unappealable, including prior to 03/15/2017, respecting the 5-year period prior to the filing of the action. If it is not yet excluding the ICMS from the PIS and COFINS basis, it may begin to do so, and if it is already excluding, continue with this procedure.
2) Actions filed as of 03/16/2017: the company will not be able to recover the value of the period prior to 03/15/2017, and must respect this date as the limit to recover the past, after the action has become final and unappealable. If it is not yet excluding the ICMS from the PIS and COFINS basis, it may begin to do so, and if it is already excluding, continue with this procedure.
3) Lawsuit already filed, but without a specific request to exclude the ICMS that was highlighted, and with a generic decision, without indicating which ICMS to exclude: the company may exclude the ICMS that was highlighted, and not the ICMS that was collected, in view of the positioning of the STF. After the action is res judicata, if it has not yet occurred, it may exclude this same ICMS portion in the compensation claims. If it is not yet excluding the ICMS from the PIS and COFINS basis, it may begin to do so, and if it is already excluding, continue with this procedure.
4) Lawsuit without a specific request to exclude the ICMS that has been posted, and with a decision to exclude only the ICMS collected: if the lawsuit has not yet become final and unappealable, the company must appeal the decision, to request the exclusion of the posted ICMS, depending on the phase of the lawsuit. In case the action has already become res judicata, evaluate the possibility of filing a rescissory action, evaluating pros and cons in relation to the eventual compensation already made and the term reached by the action already proposed, for recovery of the past.
5) For those who have not filed a lawsuit: although RE 574. 706 has been judged under the general repercussion rite, which obliges all instances of the judiciary and even the Administrative Council of Tax Appeals (CARF) to follow the same understanding, the STF's decision is only valid between the parties, and is therefore the most conservative position, that the company file its own lawsuit and (i) exclude the ICMS from the PIS and COFINS tax base as from the granting of the injunction and (ii) wait for the final and unappealable decision of the lawsuit to recover the past, respecting a 5-year term as from the filing of the lawsuit.
6) Companies that are being sued by the Federal Revenue Service and the PGFN, due to the exclusion and/or offsetting of the ICMS that was detached, and not collected, from the PIS and COFINS basis: depending on the specific case, if there is no other issue to be discussed, attach a copy of the STF judgment minutes to the process, arguing that the decision was issued under the general repercussion rite, and must be observed by all other judging bodies.
7) Companies that have been sued and have already settled the debit required by the Federal Revenue Service and/or the PGFN, based on the excluded ICMS: depending on the specific case, if there is no other issue to be discussed, make an administrative request for restitution, file a lawsuit for restitution of undue payment, or a rescissory action.
It should be noted, finally, that the above recommendations consider the effectiveness of the Answers to Advance Tax Ruling Requests issued by the Federal Revenue Office # 13/2018 and the sole paragraph of art. 27 of the Normative Ruling RFB # 1,911/2019, which express the understanding of the Federal Revenue on the subject. In case such provisions are revoked or revised, the guidelines mentioned in this article may not be applicable in their entirety.
Note: This article is informative and general in nature, and does not constitute legal advice for any specific operation or business. For any additional information, please contact us by e-mail reginaldo@rastaxlaw.adv.br
Total or partial reproduction is allowed as long as the source is mentioned.
Credit: STF Portal
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