Fábio Bernardo
Lawyer at Marcos Martins Advogados
A recent preliminary injunction granted by the Federal Regional Court of the 3rd Region prevented the offsetting of credits resulting from the exclusion of ICMS from the PIS and COFINS calculation basis prior to March 15, 2017. The decision was handed down in a rescission action filed by the Federal Government to limit the taxpayer’s right to offset.
The exclusion of ICMS from the PIS and COFINS calculation base, known as the “thesis of the century”, was authorized by the Federal Supreme Court in a judgment on March 15, 2017. After it was concluded, many taxpayers filed writs of mandamus with the aim of benefiting from the exclusion and taking advantage as a credit of the amounts overpaid as PIS/COFINS in the five years prior to the distribution of the lawsuit.
More than four years after the judgment, in a decision handed down on May 13, 2021, the STF decided to grant a request for modulation of the effects of the decision formulated by the Federal Government, authorizing the exclusion of ICMS from federal contributions only as of March 15, 2017, the date of the judgment on the merits of the issue. This modulation implies the impossibility of refunding/compensating credits prior to this date. According to the STF, only taxpayers who filed lawsuits before March 15, 2017 would be entitled to a refund/compensation for periods prior to that date.
However, due to the Constitutional Court’s delay (more than four years) in defining the issue of modulation, many lawsuits filed after March 15, 2017 relating to the exclusion of ICMS from the PIS and COFINS tax base were definitively judged by the Federal Regional Courts, without the time limit imposed later by the STF. In this scenario, a taxpayer who, hypothetically, filed a lawsuit on March 16, 2017, may have obtained the right to a refund of the amounts paid since March 16, 2012 – equivalent to five years prior to the filing.
Aware of this situation, the Federal Government has filed several rescission actions, with the aim of changing the judgments that granted the right to restitution of credits prior to March 15, 2017. But recently, the Federal Regional Court of the 3rd Region granted an injunction in one of these actions preventing taxpayers from using credits from periods prior to March 15, 2017 in administrative offsets before the Federal Revenue Service.
It is clear that this type of decision causes enormous damage to the taxpayer, since if the credits have not yet been used, they will be prevented from taking advantage of them. An even worse situation is that of taxpayers who have already offset all the credits to which they were entitled, because if the understanding that it is possible to change the final and unappealable court decision prevails, their offsets with credits prior to March 15, 2017 will not be approved, and they will have to pay the offset taxes with all legal additions.
Unfortunately, the losses and legal uncertainty don’t stop there. There are potentially legal fees already paid in relation to the credits that may now be rejected, apart from the recognition of the revenue arising from these credits which has also already triggered tax effects (IRPJ/CSLL/PIS/COFINS levy).
There is no way of knowing what the outcome of these rescission actions will be, given that respect for res judicata is a guiding principle of the rule of law, provided for in the Federal Constitution, and the STF itself has made several rulings inhibiting the filing of rescission actions in various situations. Given this scenario, each taxpayer must assess the risks of taking advantage of credits from the “thesis of the century” prior to March 15, 2017, depending on the status of their lawsuit.
In relation to other tax theses that have not yet been assessed by the STF or STJ, it is worth evaluating whether to file lawsuits immediately, so that there is no risk of any time limit on the effects of the decision significantly reducing the credit to which the taxpayer is entitled.
