The ministers of the Supreme Federal Court (STF) unanimously decided to define what applies ISS, and not ICMS, about the service of inserting advertising and propaganda texts in any medium.
In the ADI 6034, the ministers dismissed the action of the state of Rio de Janeiro and declared the constitutionality of item 17.25 of the list attached to Complementary Law 116/03, included by Complementary Law 157/16. The provision provides for the incidence of ISS on the activity of “insertion of texts, drawings and other propaganda and advertising materials in any medium, except in books, newspapers, periodicals and in the modalities of sound broadcasting services and free and free reception of sounds and images”.
The state of Rio argued that the activity of “inserting” advertising texts is confused with advertising itself and should, therefore, be taxed by ICMS-Communication.
The rapporteur, Minister Dias Toffoli, stated that it is up to the supplementary law to define services of any nature for the purposes of levying ISS. In the case in question, this was precisely what occurred, since Complementary Law 157/16 provided that the activity in question be taxed by ISS.
The minister also noted that, according to the STF's case law, even if an activity is mixed, involving the so-called obligations to give and to do, the understanding is that taxation occurs through the ISS, based on the adoption of an objective criterion.
In his vote, Toffoli explained that, according to the objective criterion, if the activity is defined in a complementary law as a service of any nature taxable by municipal tax, only the ISS should be levied, even if the activity involves the use or supply of goods, subject to the exceptions provided for in the law itself.
“Therefore, even if this activity is considered mixed or complex, as it involves a service connected, to some extent, with communication, the simple fact that it is provided for in a complementary law as taxable by the municipal tax would already rule out the intention of applying ICMS-communication”, he stated.
Furthermore, the minister concluded that the activity under discussion can be understood as a preparatory act for the communication service, and not the communication service itself.
“Such activity, although essential to the operation of the social communication service, is, as it is preparatory to that service, outside the material scope of ICMS-communication”, stated the rapporteur.
The deadline for submitting votes ended at 11:59 pm this Tuesday (8/3).