Fábio Bernardo
Lawyer at Marcos Martins Advogados
In March 2017, the Federal Supreme Court ruled definitively that ICMS should be excluded from the PIS and COFINS tax base. After the judgment, a dispute began between taxpayers and the tax authorities over which ICMS should be excluded.
While the Federal Revenue Service argued that the ICMS actually paid (after comparing debits and credits) should be excluded from the basis for calculating federal contributions, taxpayers maintained that the ICMS highlighted on sales invoices should not be included in the PIS and COFINS base.
In May 2021, the Federal Supreme Court analyzed the issue and ruled that the ICMS highlighted should be excluded from the basis of federal contributions. This decision should put an end to the discussion and bring legal certainty to thousands of taxpayers.
However, recently an opinion from the Federal Revenue Service (COSIT Opinion No. 10/2021) came to light in which the tax authorities concluded that ICMS should be excluded from the purchase price of goods for the purposes of calculating PIS/COFINS credits under the non-cumulative system.
This understanding is based on the premise that ICMS does not form part of the price of goods, as decided by the STF, and if the state tax does not form part of the price for the purposes of calculating PIS/COFINS debits, neither should it for the purposes of calculating credits.
In practice, this is equivalent to excluding the ICMS to be paid from the PIS and COFINS base, contrary to what the STF has decided.
The curious thing is that the Federal Revenue Office has always admitted that the ICMS from the previous transaction was part of the purchase price of the goods. SRF Normative Instruction 404/2004 expressly stated that ICMS was part of the acquisition cost of goods and services for PIS/COFINS credit purposes:
Art. 8 From the amount calculated under art. 7, the legal entity may deduct credits, determined by applying the same rate, on the amounts:
I – of acquisitions made in the month:
a) of goods for resale, except in relation to the goods and products referred to in items III and IV of § 1 of art. 4;
[…]
§ Paragraph 3 For the purposes of the provisions of item I, it should be noted that:
I – the Tax on Industrialized Products (IPI) levied on the acquisition, when recoverable, is not part of the cost value of the goods; and
II – the Tax on Operations Relating to the Circulation of Goods and on the Provision of Interstate and Intermunicipal Transportation and Communication Services (ICMS) is included in the value of the cost of acquisition of goods and services.
Following the STF ruling in 2017, which established that ICMS should be excluded from the PIS/COFINS calculation base, Normative Instruction No. 1,911/2019 was issued, revoking IN 404/2004. This new rule removed the express mention of the possibility of taking PIS/COFINS credits on the ICMS portion of acquisitions:
Art. 167 For the purposes of calculating credits arising from the acquisition of inputs, goods for resale or goods intended for fixed assets, the acquisition value includes […]:
I – insurance and freight paid on acquisition, when borne by the buyer; and
II – the IPI levied on the acquisition, when not recoverable.
Although the section dealing with ICMS was excluded, in our opinion it was because there was no need to expressly mention it, since considering that ICMS is calculated “from the inside”, it is obviously part of the purchase price of the goods, which is not the case with IPI, which is calculated from the outside.
That said, it can be said that until the publication ofCOSIT Opinion No. 10/2021, the Federal Revenue Office had always understood that ICMS on inputs formed the basis for PIS and COFINS credits.
A change of understanding without a change in the legislation dealing with the contributions is unjustifiable. The STF did not analyze the issue of PIS/COFINS credits.
In addition, the non-cumulative system chosen by the legislator for PIS and COFINS was base against base, with it not mattering how much was paid in the previous stage, but rather how much the purchaser paid for the product.
And the most absurd thing is that COSIT Opinion No. 10/2021 was used to recalculate the PIS/COFINS credit base in a case in which the taxpayer had legal deposits to withdraw. In calculating the amounts to be withdrawn, the tax authorities intended to “discount” the PIS/COFINS credits taken on ICMS on entries.
This attempt to recalculate the credits in a lawsuit does not hold up, mainly because the PIS/COFINcredits on ICMS on incoming goods were duly recorded by the taxpayer in SPED. If the IRS does not agree with the credits, it should disallow them in an administrative inspection procedure.
Unfortunately, this understanding of the Federal Revenue Service is already causing enormous legal uncertainty, as there is even a fear that when calculating the credits administratively authorized for offsetting, the tax authorities will also disregard the PIS/COFINS credits on ICMS on incoming goods for the purposes of calculating the amount that the taxpayer has to offset due to undue payments, significantly reducing the credit.
The opinion does not yet have binding effect for tax auditors, as it depends on analysis by the Attorney General’s Office of the National Treasury (PGFN), which will have to express its opinion and agree with it or not.
In any case, a few more decades of legal disputes are already beginning to take shape, which is detrimental to the country, the tax authorities, taxpayers and the judiciary.
