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Sao Paulo, 29.10.2014 | The inclusion of the Tax on Distribution of Goods and Services (ICMS) in PIS and COFINS calculation basis is declared unconstitutional by the Brazilian Federal Supreme Court.

After 16 years of waiting, Brazilian Federal Supreme Court (STF) has provided – in October 10, 2014 – the decision as regards to the Extraordinary Appeal (RE) nº 240.785/MG, which concerns on the exclusion of the Tax on Distribution of Goods and Services (ICMS) from the calculation basis of the social contributions called PIS and COFINS.

The process mentioned above was analyzed by STF at the first time in 2006, when six ministers voted for the unconstitutionality of ICMS inserted into PIS and COFINS calculation basis (Marco Aurélio, Carmen Lúcia, Ricardo Lewandowski, Carlos Britto, Cezar Peluso and Sepúlveda Pertence), and only one (Eros Grau) voted against the mentioned unconstitutionality.

In the recent judgment only the ministers Gilmar Mendes and Celso de Mello voted. The first followed the same understanding of retired minister Eros Grau (i.e. voted against of the unconstitutionality). In other hand, the latter followed the majority opinion (i.e. voted for the unconstitutionality). Therefore, considering that Minister Rosa Weber did not vote, the final score was seven against two.

In spite of being an important precedent for the taxpayers’, the mentioned decision doesn’t have General Repercussion’s effect – because in 1998 (when it was filed) such institute did not exist. Anyway, STF will judge again the matter in the next few weeks – but this time under the institute of the General Repercussion – when will be analyzed the Constitutionality Declaratory Action nº18 (filed by the tax authorities) and the RE nº 574.706 (filed by a tax payer), whose the reporting minister will be Carmen Lúcia.

These news decisions mentioned above – that will be rendered under the institute of the General Repercussion – will be voted by a renewed group of Ministers: Teori Zavascki, Luiz Fux, Dias Toffoli, Roberto Barroso, Rosa Weber and a last one to be defined to cover the vacancy of Minister Joaquim Barbosa.

Considering the scenario presented herein, the taxpayers that aims to file a lawsuit to plead the exclusion of ICMS from PIS and COFINS calculation basis should seek the Judiciary – as regards the last 5 (five) years – before the judgment of the mentioned processes, which decisions will be provided under the institute of General Repercussion.

Otherwise, in case STF provide a decision which’s effects applies only for the futures cases, only the taxpayers that already filed a tax suit can benefit – from a likely favorable decision – as regards to past cases.

By the tax team of Pacheco Neto, Sanden & Teisseire Advogados.

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