The 2nd Panel of the 3rd Chamber of the 3rd Section of the Administrative Council of Tax Appeals denied a request to obtain PIS and Cofins credits on Netflix advertising expenses. The information is from the newspaper Valor Econômico.
The court did not consider that the requests of the two companies could fit into the understanding established by the 1st Section of the Superior Court of Justice which, in 2018, defined that all essential and relevant goods, at any stage of production, could be considered inputs and generate PIS and Cofins credits.
In its request, Netflix argued that, as it is a new business, advertising expenses are essential and should generate the right to PIS and Cofins credits. The winning vote was that of councilor Walker Araújo, representing the taxpayers. For the judge, the expenses would only qualify as inputs if the company's core activity was advertising.
“Only taxpayers who provide services related to marketing and advertising will be able to take advantage of PIS and Cofins credits,” he pointed out. The ruling that denied Netflix’s request was 7 to 1.
Other cases
In March of this year, the ruling of the Administrative Council of Tax Appeals (Carf) was published, which allowed the appropriation of PIS and Cofins credits on advertising and publicity expenses. The case involves the store Insinuante, currently Ricardo Eletro.
Following the position adopted by the trial department, Carf concluded, by majority, that the retail company could take advantage of PIS and Cofins credits resulting from advertising and publicity expenses.
The issue involves the so-called cooperative advertising budget (VPC), in which the retailer receives a budget from suppliers to reimburse part of the expenses that the company has with advertising the resold products.
For the police station that analyzed the Ricardo Eletro case, as it is in the company's corporate purpose that it provides advertising services to promote products and this service is remunerated by the cooperative advertising budget, this should be considered an input, as it is essential for the company's activity.
Click here to read Ricardo Eletro's ruling
10855.722334/ 2018-78
Source: https://www.conjur.com.br/2021-out-28/carf-nega-creditos-pis-cofins-propaganda-netflix