A decision by the Federal Regional Court of the 3rd Region may defer the taxation of PIS and Cofins credits generated in the dispute for the exclusion of ICMS, since it determined that the Federal Revenue Service can only collect Income Tax (IRPJ) and Social Contribution on Income (CSLL) at the time of approval of tax compensation, and not previously, that is, in the res judicata of the judicial process.

This decision is relevant since there may be a significant delay between the two periods, especially since in many cases there is a significant delay by the Federal Revenue in formalizing the approval of offset credits.

It should also be noted that it is still pending definition by the STF whether the PIS/Cofins credit on the ICMS should be that calculated on the value of the ICMS highlighted in the invoice or on the ICMS actually paid to the public coffers.

The Federal Revenue charges 34% of IRPJ and CSLL for understanding that the tax credits represent an equity increase. For the agency, taxation must occur with the final decision of the lawsuit, even though the decision only recognizes the right to compensation and does not determine the amount of the credit to be used, as understood by the Federal Revenue in the Answer to the Consultation on Tax Ruling No. 233, of 2007.

The taxpayer, by the other hand, defended that said taxation should occur to the extent that there is the ratification of the tax compensation by the Federal Revenue, when the actual increase in equity in his favor would have occurred in a definitive way.

Our team is available to assist in this and other tax law issues. For further information please contact our Tax Team by the following e-mails: rmarques@zaslaw.com.br or aslaw@zaslaw.com.br.