The STF’s modulation on the exclusion of ICMS from the calculation base of PIS and Cofins: practical effects for companies
The Federal Supreme Court (STF), in June 2021, in adjudicating the appeal of the Motion for Clarification (Embargos de Declaração) of the Federal Union, modulated the effects of the 2017 decision regarding the Tax on the Circulation of Goods and Services (ICMS) not forming part of the calculation base of PIS and Cofins. The modulation, which is provided for in Article 27 of Law No. 9,869/99, means that the STF, by a two-thirds majority of its members, may restrict the effects of the decision to take effect from the date set by the Supreme Court.
On March 15, 2017, the STF had decided that the ICMS must not form part of the calculation base of PIS and Cofins, establishing the general repercussion thesis (Theme 69) in the adjudication of Extraordinary Appeal 574706.
Against this 2017 decision, the Federal Union filed an appeal of Motion for Clarification, alleging that the decision contained contradictions, the impact of the decision on public coffers, and pleading that the retroactive effects of the decision be considered valid only after the adjudication of the motion.
But, in practical terms, what are the impacts of the 2017 and 2021 decisions for companies?
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Impacts
The first impact is that it was decided that the ICMS that must not form part of the calculation base of PIS and Cofins is the ICMS highlighted on the invoice and not the ICMS actually collected.
The Federal Revenue Secretariat (SRF), through Internal Consultation Solution Cosit No. 13/2018, had the understanding that the ICMS to be excluded was the ICMS collected and not the declared one.
Therefore, the companies that already had a court decision that had become final and unappealable (transitada em julgado) and that had already carried out the procedure of Qualification of a Final and Unappealable Court Decision before the SRF considering the ICMS collected, have a supplementary credit for offsetting purposes.
The second impact concerns the companies that ceased to consider the ICMS in the calculation of PIS and Cofins since 03/15/2017. The Office of the Attorney General of the National Treasury (PGFN) published Opinion No. 7698/2021, in which it exempts the attorneys from contesting, offering counterarguments, filing appeals, in addition to authorizing the withdrawal of appeals already filed. Therefore, if there are collection lawsuits against the company, the tax credit charged by the Union will be declared extinguished.
And the third impact is related to whether or not the company has a lawsuit discussing the exclusion of the ICMS from the calculation base of PIS and Cofins.
In the 2021 modulation decision, the STF decided that the companies that have a lawsuit filed before 03/15/2017 may recover the PIS and Cofins overpaid in the period of up to five years retroactively counting from the date of the filing of the lawsuit.
Still within this third impact, for the companies that filed the lawsuit after 03/15/2017 and obtained a favorable final and unappealable decision, the Federal Union may file a rescissory action to disregard the offset credit retroactive (before 03/15/2017) and charge the difference of PIS and Cofins.
And finally, for the company that does not have any lawsuit discussing the credit of PIS and Cofins arising from the inclusion of the ICMS in its calculation base, Opinion No. 7698/2021 provides that “regardless of the filing of judicial demands, every taxpayer is guaranteed the right to recover, in the administrative sphere, amounts that were unduly collected”. This implies that companies may rectify their declarations in the administrative sphere and plead the restitution of the tax credit before the SRF.
Therefore, in light of this legal scenario, each case must be analyzed individually to assess whether or not there is an ongoing or closed judicial or administrative action, the content of the decision that has already become final and unappealable, and the date of the filing of the judicial or administrative action in order to assess the impact of the adjudication of Extraordinary Appeal 574706 for the company.
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