PGFN paralyzes the Federal Revenue's reaction against the effects of the “thesis of the century”

Report from the newspaper Valor Econômico dealt with the opinion of the Attorney General of the National Treasury, which understood that the Supreme Court's decision on the exclusion of ICMS from the PIS and Cofins calculation base does not apply to the stage of calculating credits generated with the acquisition of goods and consumption. The document binds tax auditors, thus limiting the role of the Federal Revenue Service in these cases. The report highlighted a comment by Dr. Eduardo Maneira as president of the OAB's Special Tax Law Commission.

PGFN paralyzes the Federal Revenue's reaction against the effects of the “thesis of the century”

Document signed by Attorney General Ricardo Soriano binds tax auditors

By Joice Bacelo and Beatriz Olivon — Rio and Brasília

Photo: Fabiano Cerchiari/Valor

09/29/2021

Lawyers say that the opinion published yesterday by the Attorney General of the National Treasury (PGFN) leaves the Federal Revenue with its “hands tied”. From now on, it is practically impossible for tax auditors to react against the effects of the “thesis of the century” – which generated R$ 358 billion for taxpayers, according to a study by the Brazilian Institute of Planning and Taxation (IBPT).

PGFN states, in this opinion, that the decision of the Federal Supreme Court (STF) on the exclusion of ICMS from the calculation of PIS and Cofins does not apply to another stage: the calculation of credits that are generated with the acquisition of goods and inputs. The document is signed by Ricardo Soriano, the attorney general, and binds the tax auditors.

The Federal Revenue Service had been insisting on this topic. If it prevailed, it would be bad for companies because, here, the effect is the opposite of that of the “thesis of the century”. Without ICMS, the value of the credit decreases and the bill payable to the government increases. For the Union, however, it would be a way to balance the books.

Game over

“There is no longer any type of interpretative exercise that the Federal Revenue Service can adopt to insist on this. The prosecutor's office is saying that it would only be possible with a change in the laws that support the PIS and Cofins credit. For me, then, the game is over”, considers tax expert Carlos Eduardo Navarro, partner at Galvão, Villani, Navarro e Zangiácomo Advogados.

For Douglas Campanini, partner at Athros Auditoria e Consultoria, “the PGFN imposed a harsh defeat on the Federal Revenue Service”. He states that if auditors insist on charging the exclusion of ICMS in the calculation of credits, as they have been doing until now, “taxpayers may question the actions of the Revenue, as they fail to comply with the PGFN's guidance”.

“Expectations and uncertainties regarding the mode of taxation or the level of tax demands affect investment decisions and consumption decisions”
— OAB

Economic impact

The special tax law commission of the Brazilian Bar Association (OAB) had released an opinion on this topic on Friday. The document states that, in practice – considering the amounts involved – if the Revenue's position prevails, it would be as if the Tax Authorities had won, in the STF, the discussion about which ICMS should be excluded from the calculation of PIS and Cofins payments. The National Treasury defended, in the embargoes declaring the “thesis of the century”, that it was what was actually paid by taxpayers to the States. However, the ICMS that appears on the invoice prevailed.

“Expectations and uncertainties regarding the mode of taxation or the level of tax demands affect investment decisions and consumption decisions”, stated the OAB in the document.

Eduardo Maneira, president of the commission and partner at Maneira Advogados, spoke of the need to “put a shovel in the sand” on this matter. While Rafael Pandolfo, one of the tax experts who prepared the opinion, observes that “some victories in the STF look like a goal in football these days: fans don't celebrate fully until confirmation by the VAR [video referee]”.

https://valor.globo.com/legislacao/valor-juridico/coluna/pgfn-paralisa-reacao-da-receita-federal-contra-efeitos-da-tese-do-seculo.ghtml