The justices of the 1st Chamber of the Superior Court of Justice (STJ) unanimously decided that the activity of posting advertising material on websites does not fall within the concept of a communication service. With this, the judges recognized that this activity should be taxed by the ISS, and not by the ICMS. The ISS is collected by municipalities, while the ICMS is a state tax.
The judges dismissed the appeal filed by the São Paulo State Treasury, effectively upholding the decision of the São Paulo Court of Justice (TJSP). For the court of origin, the activity in question does not constitute a communications service, and the jurisdiction to tax this activity was assigned to the municipalities (with ISS being levied) by means of Complementary Law 157/2016.
The rapporteur, Minister Gurgel de Faria, stated that the service of inserting advertising and displaying propaganda on websites should not be confused with a communication service. When the service is a communication service, the legislation understands that ICMS should be levied. The activity developed by Universo Online S/A, he stated, is characterized as a value-added service, according to article 61 of Law 9,472/97.
The judge also highlighted that the Supreme Federal Court, in the judgment of ADI 6034, recognized that ISS, and not ICMS, should be levied on the provision of services for “insertion of texts, drawings and other advertising and publicity 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”.
“Tax legislation cannot, in order to define or limit tax powers, alter the definition or scope and content of institutes, concepts and forms of private law”, stated Gurgel de Faria.
The process is AREsp 1598445/SP.