Publications - 23/08/21
Brazilian attorney General’s Office of the Nacional Treasury (PGFN) may issue new declaratory act on the theme of exclusion of VAT tax (ICMS) from PIS and COFINS (social insurance contributions) calculation basis
With the publication of the decision of the motion for clarification of judgement within the trial that defined the exclusion of VAT tax (ICMS) from the PIS and COFINS (social insurance contributions) calculation basis, the Brazilian Attorney General’s Office of the National Treasury (PGFN) might issue a new declaratory act regarding the judgment with further explanations to taxpayers.
A topic that should be addressed in the opinion is the “double gain” of taxpayers in the offsetting of the PIS and COFINS (social insurance contributions), since the Brazilian Supreme Court ordered the exclusion of VAT tax from the social insurance contributions calculation basis paid by the taxpayer, but did not change the credit of the VAT tax that is registered upon entry of goods, which base continues with VAT tax included.
As Law No. 10.833/2003 defines that the credit is calculated on the price or value of the goods and services, any attempt by the tax authorities to exclude the ICMS (VAT tax) that makes up the price of goods at entry is illegal.