In a favorable opinion to the companies, the Attorney General's Office of the National Treasury (PGFN) understood that it is not possible to exclude ICMS from the calculation of PIS and Cofins credits. The statement was made as a result of the judgment of RE 574,706, known as the “thesis of the century”, in which the Supreme Federal Court (STF) decided that ICMS does not make up the calculation basis for PIS and Cofins. For the PGFN, the Supreme Court's judgment is not capable of automatically changing the entire credit regime.
In opinion 14483-2021, the PGFN stated that it is not possible, based solely on the content of the Supreme Court's ruling, to recalculate the credits determined in the entry transactions, “since the issue was not and could not have been discussed in the proceedings”.
The PGFN's opinion is dated September 24 and was signed by the Attorney General of the National Treasury, Ricardo Soriano. It is expected to be published in the Official Gazette on Wednesday (9/29).
According to the document, the PIS and COFINS credit regime has many legal peculiarities. The Supreme Court, limited to the taxpayer's request, removed ICMS only from the calculation basis of the amounts that the taxpayer would need to collect as PIS and COFINS; however, as the legislation on credits remained the same, the ruling was not able to change the entire credit regime.
According to the text, the PGFN indicates that, in order to reduce credits, excluding ICMS, a normative act on this subject would be necessary. The norm does not exist, but it could be issued, for example, by the Ministry of Economy.
“Finally, and with a view to providing effective legal certainty for the resolution of the controversy regarding the effects of the judgment of Theme 69, as well as with the objective of providing mitigation of negative effects on the eventual expectation of collection, it is suggested that the Ministry of Economy evaluate the eventual proposal of a normative act that expressly covers the provision for the exclusion of ICMS from the acquisition value of PIS/COFINS credits”, says the opinion.
Opinion binds tax administration
In practice, the opinion binds the tax administration, so that Federal Revenue auditors will not be able to establish tax credits based on the interpretation of the exclusion of ICMS from the calculation basis in the calculation of the contribution and in the calculations of PIS and Cofins credits.
“The PGFN’s opinion prevails by law. Articles 19 and 19-A of Law 10,522 provided rationality to the system by allowing the tax administration in the broadest sense, the Federal Revenue Service and the PGFN, to not pursue matters already decided in higher courts in terms of general repercussion or repetitive appeal,” explains tax specialist Breno Vasconcelos, a researcher at Insper and Fundação Getúlio Vargas (FGV) and partner at the law firm Mannrich e Vasconcelos Advogados. “And how does the attorney’s office recognize these matters? Through these opinions, and this opinion recognizes the lack of need for further discussions,” he adds.
Prior to Opinion 14,483/2021, the PGFN had published another opinion, SEI No. 12,943/2021, on the subject. Of a confidential nature, the document clarified the questions presented by the Special Secretariat of the Federal Revenue in Opinion Cosit No. 10, of July 1, 2021, to the effect that the exclusion of ICMS from the calculation basis of the contribution to PIS/Cofins, as defined by the Supreme Court, does not authorize the extension to the calculation of the credits of these contributions.
Tax lawyers interviewed by JOTA state that the opinion is different from the statements made by the Federal Revenue Service and the PGFN itself, attached to a case in the Federal Court of the 3rd Region.
In this specific case, the tax authorities had decided to exclude ICMS from the tax base when calculating the contribution and PIS and Cofins credits. The tax authorities' response was only valid for the case under discussion in the proceedings, but tax experts feared that the position unfavorable to companies would be the tax authorities' understanding for all cases.
According to tax expert Tiago Conde, director of the Brazilian Tax Law Association (Abradt) and partner at the Sacha Calmon Misabel Derzi law firm, the opinion is in practice favorable to the taxpayer, since it brings peace and standardization to macro tax litigation. “In general terms, the opinion is positive and reduces litigation. However, the point that says the issue was not decided by the ruling and requires infra-constitutional legislation for answers needs to be better clarified,” he explains. “Putting a new agenda on the table is not positive and generates litigation because the issue has already been settled.”
Tax specialist Rebeca Müller, from Figueiredo e Velloso Advogados, explains that, with regard to crediting, in simplified terms, when a product enters the company's establishment, the ICMS has already been collected in the previous stage. Thus, under the non-cumulative system, the taxpayer is entitled to a credit, relating precisely to this ICMS collected in the previous stage.
“In its opinion, the Treasury maintains the possibility for taxpayers to credit themselves in the traditional way. In the document, the Treasury advises the tax authorities that at this time it is not possible to exclude ICMS from the calculations for this PIS and Cofins crediting, which is beneficial for the taxpayer,” says Rebeca.
For the lawyer, taxpayers should be aware of the possibility of a new rule defining the exclusion of ICMS from PIS and Cofins crediting.
“At this time, the PGFN’s opinion does not increase tax litigation on this topic, but it is a warning that there may be a move by the Ministry of Economy to change this system,” says Rebeca.