The Federal Supreme Court (FSC) will analyze the exclusion of PIS and COFINS from its own calculation base. Even with no forecast for the trial to be judged (RE 1233096), six of the eleven ministers had already voted for general repercussions by October 15.

In a recent decision, the Supreme Court ruled that ICMS is not taxpayers’ income and therefore could not be included in the PIS and COFINS tax basis. The same reasoning was applied by the Superior Court of Justice (SCJ) to determine the exclusion of state tax from the calculation of Social Security Contribution on Gross Revenue (SCGR).

The rapporteur of the case now under review by the Supreme Court, Minister Dias Toffoli, said the issue is similar but at the same time distinct from the exclusion of ICMS from the base of social contributions. Considering that the theme transcends the interests of the parties and has legal, economic and social relevance, he voted for the general repercussion.

According to attorney Bruno Zaroni, a partner at Zaroni Advogados, “the possible exclusion of PIS/COFINS from their respective calculation bases constitutes a necessary legal breakdown of the decision issued by the Supreme Court in March 2017, when ruling RE 574,706, under the general repercussion system, which recognized the unconstitutionality of the inclusion of ICMS in the PIS and COFINS calculation basis”.

Bruno points out that the legal basis used by the Supreme Court has generated numerous effects, as well as fostered discussions until then not strong enough in the context of tax litigation, such as the exclusion of ISS and PIS/COFINS from the amount of gross revenue of private companies (legal bases of PIS and COFINS).

Thus, Bruno Zaroni points to a change in the Brazilian tax scenario, in which taxes are now analyzed as revenue from the State, and not from the taxpayer, which is why it is improperly configured, not only the inclusion of these contributions in their taxes calculation bases, as well as the inclusion of any other taxes.