Angelo Francisco Barrionuevo Ambrizzi
Lawyer at Marcos Martins Advogados
The São Paulo Court of Justice recently ruled out the requirement to calculate ISS in Civil Construction on the basis of the São Paulo Municipality’s tax list.
The decision was handed down by the 18th Chamber of Public Law in a lawsuit filed by a company that operates in the real estate development sector and, as such, hired service providers to carry out the work.
The Municipality of São Paulo requires the contractor, as the responsible party, to pay the ISS owed by service providers based on a presumed value of labor per square meter built, i.e. by means of a tax tariff.
This minimum value is laid down in an ordinance issued by the Municipal Finance Department. In practice, the Municipality calculates the minimum tax due based on the tax list, deducts what has already been paid by the service provider for issuing the invoices and charges the difference.
This requirement is flagrantly illegal, since the basis for calculating ISS, according to Complementary Law 116/2003, is the price of the service provided, and municipalities cannot, by means of a hierarchically inferior rule (decrees, ordinances, resolutions, etc.) alter the basis for calculating the tax.
This was the understanding of the Court of Justice, which added that the City Council’s stance also contravened article 148 of the CTN, since the price of the service could only be disregarded if the taxpayer’s declarations, documents and explanations were not credible.
Although the courts have ruled against this illegal form of taxation, municipalities insist on continuing to charge ISS based on tax tariffs, forcing taxpayers to go to the courts to have their right to fair and legal taxation guaranteed.
In this context, Marcos Martins Advogados Associadosputs its Tax Law team at the disposal of anyone interested in clarifying doubts about this important issue.
