The majority of the ministers of the Federal Supreme Court (STF) voted in favor of the levying of ISS on licensing or assignment contracts for computer programs (software) developed for clients in a personalized manner. The issue is being judged in the Virtual Plenary in an appeal filed by Tim Celular.
So far, six ministers have voted in favor of the charge and four others have not yet spoken out. The trial ends today at midnight.
Tim Celular has appealed to the Supreme Federal Court against the collection of ISS (Service Tax) by the city of Curitiba (PR) on the licensing and use of software. The company claims that these activities do not constitute services. It also argues that municipalities only have the right to tax services provided within their territorial limits.
According to Tim Celular, the operation of assigning and licensing computer programs constitutes part of its telecommunications operations, and therefore, it could not be taxed by taxes other than import, export and ICMS. The licensing and assignment of software in the mobile telephony sector are essential for the adequate provision of telecommunications services, according to the company's claim in the appeal (RE 688223).
This was not, however, the understanding of the majority of the ministers. The rapporteur, Minister Dias Toffoli, recalled that, recently, the STF decided that the licensing and transfer of the right to use computer programs, regardless of their type, are subject to the ISS and not to the ICMS.
In that judgment, the plenary session ruled that the traditional distinction between off-the-shelf (standardized) and custom-made (customized) software is no longer sufficient to define jurisdiction for the taxation of legal transactions involving computer programs in their various forms. For Toffoli, the same guidance should guide the resolution of this case.
According to the rapporteur, the service related to the licensing of customized software acquired by the company, although essential to its activities, should not be confused with the telecommunications service itself, nor can it be considered as a supporting activity of this service. Even if the software is produced abroad, it produces effects in Brazil and taxation does not occur because the service entered the country, but rather from the moment it entered the country.
“I do not see any unconstitutionality in the collection of the ISS in question, even though the agreement cited in the records was signed with a company based abroad,” he stated.
Ministers Cármen Lúcia, Rosa Weber, Edson Fachin, Gilmar Mendes and Alexandre de Moraes voted in the same direction as the rapporteur.
The rapporteur suggested the same modulation as the precedent. In that case, the ministers closed practically all doors to avoid retroactive charges by states and municipalities. Or even for the taxpayer to recover what was unduly paid.
Solutions were established for eight different situations with only one possibility of retroactive collection. The municipality could execute the company that did not collect anything, neither ISS nor ICMS. The taxpayer who paid both taxes, on the other hand, could ask the States for the amounts collected in the past, unduly.