The Federal Revenue Service (Receita Federal) has been notifying taxpayers to report, within a period of 20 days, the method they decided to adopt for the exclusion of the ICMS (state value-added tax) from the calculation base of PIS and Cofins (federal social contributions) – whether based on the tax stated on the invoice or the amount effectively paid. The communications are coming from the Special Office of Large Taxpayers (Demac), in São Paulo, and have already been received by companies in the retail sector.
These are companies with administrative or judicial decisions guaranteeing the existence of the tax credit – arising from the exclusion of the tax – and which have not yet completed the qualification before the Federal Revenue Service.
It is a standard text. The Tax Authority requests the breakdown of the calculation and makes two other requests: for the taxpayer to inform the legal, administrative or judicial basis that guarantees the removal of the ICMS from the calculation of PIS and Cofins, and to present the origin of the amount of the excluded tax.
It is stated that the document “does not characterize the start of a tax procedure”. The Federal Revenue Service “reminds”, however, that “failure to observe the rules for the preparation and submission of the EFD [Digital Tax Bookkeeping, the digital file containing the taxpayers’ information] gives rise to the application of the penalties provided for in article 10 of Normative Instruction No. 1.252/2012”.
These notifications are a consequence of Consultation Ruling No. 13, which was published by the General Coordination of Taxation (Cosit) of the Federal Revenue Service in 2018. The rule was built from the Tax Authority’s interpretation of the ruling of the Federal Supreme Court (STF) that decided to remove the ICMS from the base of PIS and Cofins.
The text states that taxpayers must use in the calculation the ICMS effectively paid to the State and not the amount highlighted on the invoice. This understanding, in practice, reduces the credits to which taxpayers are entitled, since the amount paid is generally lower than the amount highlighted on the invoice (due to the non-cumulative regime of the state tax and tax benefits to which the company may be entitled).
This discussion is in the motion for clarification (embargos de declaração) filed by the Office of the Attorney General of the National Treasury (PGFN) against the Supreme Court ruling – still pending judgment – and also appears in appeals taken by the National Treasury to the Superior Court of Justice (STJ).
The Judiciary’s delay in closing the discussion on the ICMS in the calculation of PIS and Cofins has led companies to adopt a more cautious stance regarding the use of the credits. Most of those that already have a final and unappealable decision are qualifying before the Federal Revenue Service the “full amount”, based on the ICMS highlighted on the invoice, but making the offsets (use of credit to pay taxes) only up to the limit of the amount calculated based on the ICMS effectively paid.
It is not only the impasse related to the offsets, however, that has generated demand at law firms. Companies under the actual-profit (lucro real) regime, which earn more than R$ 78 million per year, upon having the credit recognized by a judicial decision must leave on the table, for the Union, 34% of the amounts to which they are entitled. This share refers to the payment of Corporate Income Tax (IRPJ) and CSLL (Social Contribution on Net Profit).
Source: website of the newspaper Valor Econômico – 07/30 – the full text is available in the newspaper
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