A company that licenses cloud software has obtained a decision from the Court of Justice of Santa Catarina (TJ-SC) that exempts it from paying taxes. The judges classified the activity under the article of the Federal Constitution that guarantees tax immunity for books, newspapers and periodicals.
The decision, which is preliminary in nature, benefits Doutor-IE. According to the judges, the benefit should be applied because the purpose of the service provided by the company is to “spread culture”.
Through an online platform, the company sells a computer program that provides technical automotive information. There are thousands of data points on mechanical and electrical systems, which can be accessed by users – mostly workshops. By paying a monthly subscription, it is possible to obtain four types of licenses: for mechanical and electrical systems, which can be accessed by users – mostly workshops. By paying a monthly subscription, it is possible to obtain four types of licenses: for motorcycles, cars, SUVs or trucks.
There are few decisions on the subject, but according to lawyers, the volume of discussions is growing in the Judiciary. Especially due to the number of programs that have been developed in the technology market, including due to the isolation caused by the pandemic.
City governments are responsible for taxing software. They generally classify this activity as technology and charge ISS. In the case judged in Santa Catarina, for example, the city of Florianópolis – where the company is located – required a rate of 2%.
Doutor-IE's request for an injunction had been denied in the first instance. The company appealed to the court and managed to reverse the decision in the 1st Public Law Chamber, where the understanding was unanimous (case number 5025285-32.2021.8.24.0000).
The judges used as a basis a judgment in which the ministers of the Federal Supreme Court (STF) stated that the tax immunity contained in article 150 of the Federal Constitution – aimed at “books, newspapers, periodicals and the paper intended for their printing” – also applies to electronic books and their technical support (RE 330817).
“In light of what was decided in the leading case, it is undisputed that the tax immunity provided for in article 150, item IV, item d, is not restricted to printed teaching materials (books and periodicals), since the aforementioned concept includes new digital tools that aim to transmit education, culture and information”, states in the vote the rapporteur, judge Luiz Fernando Boller.
Representing Doutor-IE in the case, lawyer Rodrigo Schwartz Holanda, partner at the Menezes Niebuhr law firm, states that these discussions, when they are not exactly the same as those dealt with in the STF, tend to generate a lot of controversy.
“However, the STF, when deciding on electronic books, made a historic construction. What is protected by the Constitution is the dissemination of information and culture. And the software, in this case in which we are involved, has the exclusive purpose of making information available”, says Holanda.
Taxation expert Leo Lopes, partner at FAS Advogados, states that tax exemptions must be interpreted broadly, according to the purpose of the service provided. “This brings subjectivity, creates a gray area and, therefore, there is a clash between taxpayers and city governments,” he says.
The lawyer is working for the owner of an application that allows users to access various magazines. The company's request for immunity was denied in the first instance, but managed to overturn the decision in the Court of Justice of São Paulo (TJ-SP).
The judges granted a request to produce additional evidence. Lopes sees the measure as an important signal. “They want to understand what service was provided to analyze whether it qualifies for tax exemption,” he says. Therefore, there is no decision yet.
The Florianópolis City Hall was contacted by Valor, but had not responded by the time this edition went to press.