Imposition of IPI, PIS and COFINS on domestic sales and imports of beverages
Decree No. 8,115/13 (Official Gazette of 10.01.2013) amended Decree No. 6.707/08, which ruled the imposition of IPI, PIS and COFINS, on domestic sales and imports of products comprised by Chapters 21 and 22 of the IPI Chart of Rates (Beverages).
This amendment provided that as of 2014, the amount of tax due concerning PIS, COFINS and IPI may be disclosed by charts comprised by a ruling enacted by the Ministry of Finance, and that Chart III-A of Attachment IV of Decree No. 6,707/08 was replaced by Chart III-A of Decree No. 8,115/13.
(Decree No. 8,115, 09.30.2013, Official Gazette of 10.01.2013). Available at:
<http://www.planalto.gov.br/CCIVIL_03/_Ato2011-2014/2013/Decreto/D8115.htm>. Accessed in Oct., 2013).
New rule to limit acts of tax agents
The Commission of Constitution, Justice and Citizenship (CCJ) of the Federal Senate has recently approved a bill of law that imposes several limitations to acts performed by tax agents. The matter shall be now analyzed by the Commission of Economic Matters (CAE).
According to the wording approved, tax agents would be forbidden to use administrative means which could compromise taxpayers’ economic activities in order to force them to collect taxes. Another new provision concerns the stimulation of judicial remedies against acts practiced by tax agents, providing that the taxpayer using the Judiciary shall not be a reason to impose penalties or administrative sanctions.
This bill of law also has provisions concerning administrative tax proceedings, providing that: the Tax Administration must issue a motivated decision in proceedings, requests or complaints dealing with a matter that is under its competence, within 360 days; and that a tax debt shall be listed as enforceable in 45 days after the competent organ receives the relevant information.
Four amendments have been presented by Senator Pedro Simon (PMDB-RS), three of them being approved by Armando. According to him, this proposal results from the need to provide a uniform treatment, under legal equality conditions, to individual and collective interests before the Government.
(Senate Bill of Law No. 298, 2011 – Supplementary).
CCJ approves bill of law that allows a tax debtor to offer assets
Commission of Constitution and Justice (CCJ) of the Federal Senate approved a bill of law that allows a taxpayer with tax debts to offer, at any time, assets or warranty-insurance, at an amount that suffices to cover the debt indicated by authorities, in order to obtain a certificate of tax regularity. This bill of law was presented by Senator Armando Monteiro (PTB-PE) and amends the Tax Foreclosure Act (Law No. 6,830/1980), which already authorizes that taxpayers offer assets as guarantee to obtain the certificate, but only after the tax foreclosure
This bill of law has already been analyzed by the Commission of Economic Matters (CAE) and approved definitively by the CCJ, so it will be now voted by the Chamber of Representatives. It will only be voted by senators if one of them appeals from the proposal. Reporting Senator Francisco Dornelles (PP-RJ) is favorable to the approval and presented one amendment, to increase - from 5 to 20 days - the term for the Administration to present a manifestation on the regularity and sufficient amount of the guarantee offered by the debtor. The goal was to adapt to the term provided by the Civil Litigation Code.
According to Dornelles, Monteiro’s bill of law is fair to the taxpayer, brings legal security and is supported by precedents issued by the Superior Court of Justice, which has been authorizing good-standing tax certificates to be issued when the taxpayer offers enough warranty to pay the debt, regardless of the existence of a tax foreclosure.
If the tax foreclosure is filed, the warranty shall be converted into arrest.
(Senate Bill of Law No. 244, 2011).
Law No. 18,173 was published on September 27, 2013 and created the Program to Recover Credits of Goiás Tax Credits (“RECUPERAR”).
This new law grants payment in installments of ICMS, IPVA and ITCMD debts, related to triggering events that happened until July. 31st, 2013, charged by a tax foreclosure. Especially for ICMS purposes, RECUPERAR also comprises tax credits not assessed yet, which have been spontaneously confessed by the taxpayer.
The taxpayer may adhere to this term-installment program until December 20, 2013.
The benefit concerns: (i) debts related to the failure to comply with an ancillary obligation, taken place until July 31st, 2013; (ii) remaining balance of a previous term-payment program granted by the State of Goiás, breached or still in course; (iii) debts charged by means of a tax suit; (iv) debt related to assessments which there is a criminal accusation, provided that the accusation has not been accepted by the Judiciary.
The benefits of the Term-Payment Program are the following:
Tax + Penalty
Failure to comply with ancillary obligation
Due date for payment
Penalty and Interest
Penalty and Interest
The payment may be performed in up to 60 installments, with reduction of penalty and interest ranging from 90% to 40%, depending on the number of installments.
All installments are due on the 25th of each month, except for the first one, which must be paid until the expiration date indicated in RECUPERAR calculation, informed upon formalization of the term-payment agreement.
(Law No. 18,173, 09.25.2013, Official Gazette-GO of 09.27.2013).
Reduction of penalty and interest on ICM/ICMS debts
On the last September 19, Complementary Law No. 238/2013 of the State of Pernambuco was published, reducing “penalty and interest imposed on ICM and ICMS debts”.
This Law, which already authorized reduction of penalty and interest for debts listed or not as enforceable, including the ones with a tax foreclosure, constituted until December 31st, 2010 has been amended by Complementary Law No. 248/2013.
After the amendments brought by Law No. 248/2013, the benefits of reduction of penalty and interest comprise debts constituted until December 31st, 2012, when resulting from Tax Infraction Notice, Arrest Notice or Assessment Notice without Penalty.
The new Law kept part of the previous provisions of Law No. 238/2013, so the previous benefit is also valid for debts constituted until July 31st, 2013, when resulting from Debt Notice or Debt Notice without Penalty, Tax Infraction Notice, or listing as enforceable debts, to companies under Simples Nacional or for Debt Regularization.
The payments may be made in up to 12 installments.
Debts constituted by infraction notices are subject to the following reductions:
If the taxpayer opts to make an upfront payment, the debt must be paid until 12.30.2013.
(Complementary Law No. 238, 09.19.2013, Official Gazette-PE, 10.03.2013 / Complementary Law No. 248, 11.25.2013, Official Gazette-PE, 11.26.2013).
Model of agreement to be executed with taxpayers that are tax substitutes located in another State
Ruling SAF No. 1,321/2013 was published in the Official Gazette of Rio de Janeiro on 10.09.2013 providing for a “model of agreement to be executed with taxpayers that are tax substitutes located in another State”.
This Ruling allows the taxpayer located in another state to assume responsibility for the collection of ICMS under the tax substitution regime (ICMS-ST) on the sale of products to ICMS taxpayers located in Rio de Janeiro, when these products are only subject to this regime in that State.
Its purpose is to ease commercialization between taxpayers, since, before it was enacted, transactions with companies located in other states subject to ICMS-ST only in Rio de Janeiro would only finish if the purchaser in Rio de Janeiro proved it had collected ICMS concerning all commercialization chain.
(Ruling SAF No. 1,321, Official Gazette-RJ, 10.09.2013).
PIS and COFINS – discussion on whether revenues related to lease of movable goods are comprised in the definition of revenue, considering the taxpayer’s activity (to be judged under the General Repercussion System)
The fourth specialized panel of the Federal Appellate Court of the 2nd Region granted partial relief to Appeal No. 2005.51.01.003758-1, ruling that PIS and COFINS levy on revenues related to the lease of movable goods. The taxpayer filed an Extraordinary Appeal arguing that Section 3, paragraph 1, of Law No. 9,718/98 is unconstitutional for providing a broader definition of revenue than the one limited by the Supreme Court as the revenue originated from the sale of products or rendering of services. It argues that the lease of movable goods is not a service rendering, as per several precedents.
The Federal Government filed counterarguments arguing that the declaration of unconstitutionality of Section 3 of Law No. 9,718/98 by the Supreme Court has no effects to the imposition of PIS and COFINS on the lease of movable goods, since the activity is comprised by the strict definition of revenue. It states that after Laws No. 10,637/02 and No. 10,833/03 were enacted, both after Amendment to Constitution No. 20/98, the calculation basis of these taxes became the gross revenue.
This matter shall still be decided by the Supreme Court under the general repercussion system. The Reporting Justice is Marco Aurélio.
(RE 659412. Available at: <http://redir.stf.jus.br/paginadorpub/paginador.jsp?docTP=TP&docID=4773121>. Accessed in Nov., 2013).
SUPERIOR COURT OF JUSTICE
IPTU and ITBI – different taxable bases
The 2nd panel of the Superior Court reformed a decision rendered by the State Appellate Court of São Paulo. Justice Herman Benjamin was the Reporting Justice.
The State Court had granted relief to the taxpayer’s claim, considering that both Section 33 of the Taxation Code, concerning IPTU, and Section 38 of the same code, concerning taxes on the transference of goods (ITBI and ITCMD), define the calculation basis as the market value. The State Court has then concluded that “there cannot be two market values – one for IPTU purposes and another one for ITBI purposes”.
The arguments of the reporting justice are grounded on the violation of Section 38 of the Taxation Code, since the market value, ITBI calculation basis, is equal to the sale value of the estate under regular market conditions. According to the Justice, if this value is distorted, this distortion related to IPTU, not to ITBI, since Municipalities assess ex officio the tax on property, and, to enable the charge, they end up adopting general formulas that comprise thousands, and for São Paulo, millions of estates taxed annually.
(Resp No. 1199964. Available at: <https://ww2.stj.jus.br/revistaeletronica/ita.asp?registro=201001133974&dt_publicacao=23/10/2013>. Accessed in Nov., 2013).
Superior Court (STJ)
STJ judges the imposition of social security taxes on amounts paid by the employer to employees
The judgment of the Special Appeal dealing with the imposition of social security taxes in charge of the employer on paid termination notice, addition one-third on vacations, fifteen first days of disease-assistance, motherhood-earnings and fatherhood-earnings has been resumed.
Justice Napoleão brought his vote partially following Reporting Justice Mauro Campbell, diverging on the imposition of social security tax on motherhood-earnings, since this benefit aims at protecting the mother and the newborn, without a compensation nature. He also stated that the imposition of tax on this amount results in the discrimination of female workers, since they end up being a more expensive hiring than male workers.
Therefore, he partially followed the Reporting Justice’s vote to decide that social security tax is only imposed on fatherhood-earnings. The judgment was interrupted again by request of Justice Herman.
Until this moment, the votes rendered may be summarized as follows:
One-third on vacations
Paid termination notice
Justice Mauro (Reporting Justice)
Justice Herman (requested to see the records on 10.23. This chart indicates his previous vote)
(REsp No. 123.0957. Available at: <https://ww2.stj.jus.br/revistaeletronica/ita.asp?registro=200700293024&dt_publicacao=25/04/2012>. Accessed in Nov. 2013).
Superior Court (STJ)
Legitimacy to file an appeal against the redirecting of tax foreclosure to shareholders
Special Appeal No. 1,347,627, judged under the systematic of repetitive appeals and reported by Justice Ari Pargendle, discusses whether it is legitimate that the taxpayer originally assessed files an appeal against the redirecting of foreclosure to shareholders. The case analyzed resulted from an appeal filed by the company against a decision that determined that the tax foreclosure should be redirected to its shareholders.
Reporting Justice stated that this controversy shall be solved by Section 6 of the Civil Litigation Code, according to which no one shall claim a third party’s right in its name, except when provided by law – and that procedural substitution depends on a legal authorization. It emphasized that there is no law allowing that the company files an appeal against the redirecting of foreclosure under that circumstance. For this reason, he voted to deny relief to the Special Appeal, being followed by the other Justices.
Therefore, the 1st Panel has unanimously denied relief to the Special Appeal, ruling that the company initially assessed has no legitimacy to file an appeal against the redirecting of a foreclosure to its shareholders.
(Special Appeal No. 1,347,627. Available at:
<https://ww2.stj.jus.br/revistaeletronica/ita.asp?registro=201202096171&dt_publicacao=21/10/2013>. Accessed in Oct., 2013).
STATE APPELATE COURT/SP
The ICMS is due to the State where the importing trading is located
In the beginning of November, the State Appellate Court in São Paulo canceled a tax infraction notice issued by the State Revenue Service of São Paulo to charge ICMS originated from “import on behalf” performed by a “trading company” located in the State of Santa Catarina. The decision was rendered by the 8th Panel of Public Law of the State Court in the records of lawsuit No. 0018209-38.2012.8.26.0053 (Official Gazette of 10.04.2013), denying relief to the Appeal filed by the State of São Paulo against Visanig Indústria e Comércio LTDA.
Reporting Justice Jarbas Gomes understood that the main element of an import concerns who is responsible for the entrance of the product in Brazil, so the criterion to define the State to which the ICMS-Import is due is related to the legal destination. In the case, the Reporting Justice acknowledged that the good did not physically enter the importer’s establishment (trading), being remitted directly from customs to the third company, “for logistics purposes”.
The 8th Panel understood that, although this situation is contrary to Section 11, I, “d” of Complementary Law No. 87/96, which provides that the transaction happens “in the establishment where there is physical entrance”, the physical movement of products is an intermediate activity on import transactions, so the constitutional criterion of where the importing trading is located prevails.
Therefore, the State Court concluded that ICMS is due to the State of Santa Catarina, where the importing trading is located, not to the State of São Paulo.
(Appeal No. 0018209-38.2012.8.26.0053. Available at:
<http://esaj.tjsp.jus.br/cjsg/getArquivo.do?cdAcordao=7066236&vlCaptcha=UVdbT>. Accessed in Nov., 2013).
Exclusion of ICMS from the calculation basis of PIS-Import and COFINS-Import
IRS Ruling No. 1,401, of 10.09.2013 (Official Gazette of 10.11.2013) deals with the calculation basis of PIS-Import and COFINS-Import, ruling the modification of federal legislation so that only the customs value is considered as calculation basis of these taxes upon import of goods, without inclusion of ICMS. The taxes due shall be obtained by applying the following formulas:
I – on the import of goods subject to specific rates, the rate established per unit of product, multiplied by the quantity imported;
II – on the import of goods not comprised by the item above, the tax rate on the customs value;
III – on the import of services:
COFINS = d x (V x Z)
PIS = c x (V x Z)
V = the amount paid, credited, delivered or remitted abroad, before withholding income tax.
c = PIS-Import rate.
d = Cofins-Import rate.
f = Tax on Services rate.
(IRS Ruling No. 1.401, 10.09.2013, Official Gazette of 10.11.2013. Available at: <http://www.receita.fazenda.gov.br/legislacao/ins/2013/in14012013.htm>. Accessed in Oct., 2013).
Taxation on cost sharing between companies of the same economic group
Divergence Decision No. 23, of September 23rd, 2013, was recently published by the Internal Revenue Service with the purpose of providing a uniform understanding on the taxation of cost sharing between companies of the same economic group. As provided by that act, the requirements to deduct these expenses for Corporate Income Tax Purposes are the following: (i) that the costs and expenses are necessary, normal and usual, with due proof that they were incurred and paid, (ii) that these amounts are calculated based on reasonable and objective sharing criteria, previously agreed and formalized by means of a document signed by the parties, (iii) that the central company and all beneficiaries book as expense only their respective amount according to the sharing criteria, (v) that the amounts to be reimbursed are booked as recoverable credit and (vi) that all acts directly related to the sharing of administrative expenses are recorded separately.
Some additional comments concerning PIS and COFINS were presented, to the extent that (i) the amounts received by the central company concerning shared activities as reimbursement are not subject to taxation, (ii) the assessment of potential credits related to non-cumulativeness must be made individually for each company of the economic group, based on its respective expenses and (iii) the share of common expenses shall indicate items that compose the share of each company of the economic group in order to allow identification of items that may be credited.
(Divergence Decision COSIT No. 23, 09.23.2013, Official Gazette of 10.14.2013).
ADMINISTRATIVE TAX COURT (CARF)
CARF cancels infraction notice that charged PIS/COFINS on bonus products and commercial discounts of a large chain of supermarkets
The decision concerning Group G. Barbosa refers to the discussion on the imposition of PIS and COFINS on amounts paid by suppliers, in cash or products, for their products to be put in a special spot in supermarkets’ shelves. This common practice has triggered several infraction notices issued by federal tax agents, and for this reason this decision is an important precedent for taxpayers, since it may bring new features to the precedents of this Administrative Court.
In summary, the decision confirms taxpayers’ arguments to the extent that these commercial agreements are not subject to taxation, since they do not trigger revenue, which is the triggering event of PIS and COFINS, whether by payment with products or discount in cash. These amounts are, as understood by this decision, a mere reduction of cost of supermarkets. Moreover, for the judges that are favorable to this understanding, bonus products and commercial discounts are in fact an uncommon type of agreement, not related to services rendering, since both parties increase their sales, without any of them having an obligation to do something.
(Decision No. 3402-002.092. Available at:
<http://carf.fazenda.gov.br/sincon/public/pages/ConsultarJurisprudencia/listaJurisprudenciaCarf.jsf>. Accessed in Nov., 2013).
IRS - 9th TAX REGION
1% additional rate has been in force since 01.01.2013
Answer to Inquiry No. 177, of September 6th, 2013 stated that the 1% additional rate has been in force as of 01.01.2013, since Decree No. 7,828/2012 has fulfilled the requirement of ruling provided by Section 53 of Law No. 12,715/2012. Notwithstanding that, this understanding is contrary to the one issued by the Internal Revenue Service in Answer to Inquiry No. 36, of April 2nd, 2013. According to that understanding, the 8.6% COFINS rate applied since 08.01.2012, after Section 43 of Provisory Rule No. 563/2012 was in force.
(Answer to Inquiry No. 177, 09.06.2013, Official Gazette of 10.02.2013).
LEXpress Tax is a bulletin for exclusive distribution to Machado Meyer clients and aims at disclosing information deemed relevant. This information bulletin does not exhaust the whole legislation and case law published in the period.