Rafael Zanchettin
Lawyer at Marcos Martins Advogados
The exclusion of ICMS-ST from the PIS and COFINS tax base has gained enormous relevance in the legal and accounting circles, in view of the possibility of huge financial amounts being refunded by companies. The thesis, which is still pending judgment by the Superior Court of Justice, gained momentum after the STF settled its position on the possibility of excluding ICMS from the PIS and COFINS tax base, the so-called “thesis of the century”.
In a recent opinion in favor of taxpayers presented to the Superior Court of Justice, the Federal Public Prosecutor’s Office (MPF) pointed out that the progressive tax substitution regime is merely an anticipation of the normal ICMS and, therefore, could not diverge from the understanding consolidated by the STF – which determined the exclusion of ICMS from the PIS and COFINS calculation basis.
ICMS is a tax on transactions relating to the movement of goods and the provision of services, payable by the taxpayer whenever one of the taxable events occurs. In other words, whoever carries out the taxable event is obliged to pay the respective tax.
ICMS tax substitution (ST), on the other hand, is the system whereby the substitute taxpayer is responsible for the tax due in relation to transactions or the provision of services, as opposed to the substituted taxpayer. The tax substitution system consists of the tax being paid by a different taxpayer (substitute) instead of the one who carries out the sale of goods (substituted).
In this modality, the ICMS is paid by the substitute taxpayer only once and in advance, preceding all other subsequent operations in the production chain until the product reaches the end consumer. This is what happens, for example, with gas stations, since the tax is paid directly to the refineries when they purchase the fuel.
In view of the controversy over the issue, the Superior Court of Justice assigned two special appeals on the exclusion of ICMS-ST from the PIS and COFINS calculation basis, for consideration of the conflict in repetitive appeals.
If the decision of the First Section of the Superior Court is along the same lines as that of the Federal Public Prosecutor’s Office, it will be possible to exclude the ICMS-ST from the PIS and COFINS tax base, making it possible to reduce the tax burden on the taxpayers being replaced and to recover the amounts unduly paid.
This is an important issue that could lead to a precedent applicable to all taxpayers who are subject to this form of tax collection, such as car dealerships, gas stations, supermarkets, etc. If the final word from the STJ is in fact favorable, the more than 1,900 cases currently before the Federal Court will have economically positive outcomes – enabling companies to refund large amounts of undue payments.
Faced with the possibility of undeniable benefits, it is important that companies are prepared and consider pursuing their restitution rights as soon as possible, always accompanied by specialized legal advice. In this way, they will have maximum certainty of recovering all the amounts owed.
About Marcos Martins Advogados: Founded in 1983, the firm is highly regarded in the areas of Corporate, Tax, Labor and Business Law. Based on values such as commitment, ethics, integrity, transparency, responsibility and the constant specialization and improvement of its professionals, the firm positions itself as a true partner for its clients.
