The 8th Panel of the Federal Court of Appeals of the 1st Region granted the right to avoid payment of the PIS and COFINS over unpaid sales. The taxpayer challenged the previous decision that denied the request to avoid payment of the contribution, seeking the right to avoid the payment of amounts over services provisions and sales carried out but not paid.

In its Appellate Review, the taxpayer alleged that the applicability of the PIS and COFINS over unpaid sales breached the constitutional principles of legality, equal treatment, production capacity and non-seizure.

According to the reviewer, Justice Maria do Carmo Cardoso, there is no doubt that, because of the default, there is not even the entry of revenues, and the amounts must be excluded from the taxation. She further added that, in spite of the fact that the company carries out its bookkeeping on an accrual basis, the so-called potential revenue is prevented by the default, therefore, there is no economic expression that could justify the charging of the PIS and COFINS.

(Civil Appeal n. 0029332-85.2007.4.01.3400).