The 1st section of the Superior Court of Justice (STJ) recently ruled on Theme 1125, establishing the thesis that the ICMS-ST is not part of the calculation basis for the Contribution to the Social Integration Program (PIS) and the Contribution to the Financing of Social Security (COFINS) due by the substituted taxpayer.
The analysis of Special Appeals Nos. 1,896,678 and 1,958,265 represents an alignment of the STJ with the decision in Theme 69 of the Federal Supreme Court (STF), in which it was established that ICMS does not form part of the PIS and COFINS calculation basis.
The ICMS tax substitution system consists of the tax being paid by a different taxpayer (substitute) from the one that carries out the sale of goods (substituted).
The substitute taxpayer, usually the one at the beginning of the production chain, collects in advance the ICMS that would have been paid by the taxpayers further along the commercial chain. This is what happens, for example, with car dealerships, since the ICMS that would be owed by them is already collected in advance by the automakers.
It is important to note that the only distinction between regular ICMS taxpayers and ICMS-ST taxpayers is in the mechanism for collecting the tax – in the case of ICMS-ST, payment is made in advance and takes place at earlier stages in the chain – and the STJ’s decision, in addition to bringing the STF’s ruling into line, represents a victory, as it validates the understanding that such taxpayers occupy the same legal position as those who collect ICMS on their own operations, with the only distinction being in the model for collecting the state tax.
To make the implications even clearer, let’s take a practical example. Suppose a company buys a product worth R$100.00, with ICMS-ST of R$10.00, and resells it for R$150.00. Before the decision, the company would have had to calculate PIS and COFINS on the R$150.00. Now, the taxpayer can exclude the R$10.00 ICMS-ST from the revenue obtained from the resale and calculate PIS and COFINS on the R$140.00.
As the judgment was handed down under the system of repetitive appeals, the decision handed down by the STJ has immediate application and taxpayers can request the exclusion of ICMS-ST from the PIS/COFINS calculation basis, as well as request any refund of amounts unduly paid over the last 5 years, duly adjusted by the Selic Rate.
This is an important precedent that applies to all taxpayers who are substituted for ICMS, such as car dealerships, gas stations, supermarkets, etc. Among the benefits of the decision, we highlight the reduction in the tax burden for companies, legal certainty and the possibility of recovering amounts unduly paid over the last five years.
If you have any questions on the subject, our tax team will be happy to answer them.
