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STF rules that the inclusion of ICMS on the PIS/COFINS taxable basis unconstitutional

On March 15, the Full Bench of the Brazilian Federal Supreme Court concluded the trial of Extraordinary Appeal No. 574706, and ruled that the inclusion of the ICMS on the PIS/COFINS taxable basis is unconstitutional.

The trial had been suspended on March 9, with a score of 5 x 3 in favor of the taxpayers’ proposition. With the resumption of the trial, Justices Gilmar Mendes and Celso de Mello rendered their votes – the former in favor of the tax authorities’ arguments, and the latter for the unconstitutionality of the inclusion – thus closing the voting with a score of 6 x 4 in favor of declaring the unconstitutionality.

Finally, as regards the issue of establishing a date for the decisions to take effect, despite the request made by the Attorney of the National Treasury in the oral arguments, Justice Rapporteur Carmen Lucia found that there was no claim in this regard in the court documents. Thus, the establishment of a date for the decision to take effect was not subject to trial. However, the Attorney General of the National Treasury might file a Motion to Clarify, in order to take the issue to court.

Anyway, the trial at issue finally ends a long dispute, with a decision in favor of the taxpayers’ thesis.

This newsletter contains information and general comments on legal matters that may interest our clients and friends. It does not represent the legal opinion of our firm on the subjects addressed herein. In specific cases, readers should rely on proper legal assistance before adopting any concrete action relating to the matters addressed herein.

For more information on the matter, please contact:

Júlio M. de Oliveira –

Gabriel Caldiron –