Brazilian Supreme Court Holds that the Inclusion of State VAT
("ICMS") in the Calculation Basis of Social Contributions
on Gross Revenues ("PIS/COFINS") Is Unconstitutional
After more than a decade of discussions, the Brazilian Supreme
Court has held that taxpayers should exclude the ICMS amount from
their gross revenues in order to calculate the PIS/COFINS levied on
it.
Although the decision was issued in a case that benefits all
taxpayers, the Court's position regarding the precise effects
of this decision is still pending and might be issued with the
analysis of the motion for clarification the federal government
will file.
This is because it is possible that Supreme Court will hold that
the exclusion is mandatory solely for taxpayers who have already
filed lawsuits regarding this matter in Court, limiting the
decision's enforcement to the post-final decision period for
those who are not litigating regarding this matter. In the
worst-case scenario, the
