Ângelo Ambrizzi
Lawyer at Marcos Martins Advogados
Faced with legal uncertainty, many companies are filing appropriate legal action to have their right to classify data governance expenses as an input recognized
Compliance with the rules imposed by the General Data Protection Law (LGPD) is already a reality. In the event of inadequacy or non-compliance with the current rules, companies are running high risks of high fines and even, in extreme cases, the interruption of their activities.
Companies have significantly increased their expenditure on developing systems, adapting new procedures, hiring organizations specialized in information processing, among other things. Given this scenario, the number of queries from companies as to whether all LGPD expenses can be classified as inputs has increased significantly.
Recently, a decision was handed down by the 4th Federal Court of Campo Grande, inaugurating the judicial understanding that companies can consider LGPD expenses as an input and, as a consequence, can be credited with PIS and Cofins.
The decision recognized the right of a retail company to calculate PIS and Cofins credits on the amounts spent on its data governance, on the grounds that these expenses are essential and relevant to the production of its goods.
The classification of expenses as essential is coherent and reasonable, given that companies of all sectors and sizes need to make the necessary adjustments because it is a legal obligation.
The criterion for defining whether an expense can be considered an input, for the purposes of crediting PIS and Cofins under the non-cumulative system, is the need for the expense to be considered essential or relevant to carrying out the company’s core business. This position was defined by the Superior Court of Justice (STJ) in Special Appeal No. 1.221.170 – PR (Theme 779).
Even with the definition of the apparently objective criterion by the STJ, there are cases in which doubts remain about the essentiality of the expense for the business activity and, every time there are interpretative elements, the risk arises of divergent understandings between companies and the tax authorities. This consequently creates legal uncertainty about decision-making.
Cases in which the Federal Revenue Service assesses companies for disregarding PIS and Cofins credits due to disqualifying expenses as inputs are common. Given this uncertain scenario, many companies are filing appropriate legal action to have their right to classify data governance expenses as an input recognized, and as a result, calculating PIS and COFINS credits on these amounts, as long as they are opting for the real profit regime.
We recommend that entrepreneurs seek advice from a specialist in tax law who will have the technical capacity to give an opinion on the risks or not in deciding on the best course of action.
