Court excludes tax benefit from PIS and Cofins calculation

Judge understood that gains obtained with the Port Activities Development Fund (Fundap), from Espírito Santo, do not constitute revenue of the company

A company from Espírito Santo obtained a decision to withdraw from the PIS and Cofins calculation basis amounts referring to an ICMS tax incentive - early settlement, with a discount, for financing the state tax itself. The injunction is from the 2nd Federal Civil Court of Vitória, which ruled out the Federal Revenue Service's understanding that these are financial revenues.

The taxpayer filed a writ of mandamus against the decision of the Regional Federal Revenue Office in Vitória. He argued that the inclusion in the calculation of social contributions of gains obtained with the Fund for the Development of Port Activities (Fundap), a tax benefit granted by the state government, would be inappropriate.

Fundap was created by State Law No. 2,508, of 1970. Fund resources are intended to promote an increase in imports and exports through the Port of Vitória.

The State, in addition to deferring the ICMS-Import for the time of departure of the goods and extending the deadline for collecting the tax until the 26th day of the month following the month in which the operations carried out, grants companies authorized to operate in the system a " financing” in the amount of 8% of operations with goods outflows.

In this case, the company enters into an ICMS “financing” contract on the transaction carried out and may subsequently settle it at a discount of 90%. Because of this operation, he ends up having to recognize a “gain”.

For the Federal Revenue, the Fundap regime was not built as an ICMS tax benefit, but as a financial incentive, albeit with the same type of purpose. According to the Tax Authorities, it is precisely the advance payment with a discount that constitutes the differential element of Fundap and characterizes it as a financial incentive and not a tax benefit.

In the preliminary decision, the deputy federal judge Aylton Bonomo Junior, from the 2nd Federal Civil Court of Vitória, states that not every entry or accounting entry constitutes revenue. “The ICMS tax incentives, although they can prevent a greater equity decrease, do not constitute revenue, because they do not represent an effective inflow of cash into the company's equity. That is, they do not create new wealth,” he says (process nº 5029699-53.2021.4.02.5001).

The judge mentions, in the decision, that the issue of inclusion of presumed ICMS credits arising from tax incentives in the PIS and Cofins calculation basis is awaiting judgment by the Federal Supreme Court (STF). Six ministers voted in the sense that the measure is unconstitutional, but the trial will resume after a request for prominence.

For Aylton Bonomo Junior, the understanding is also applicable to other types of state tax incentives, which do not constitute a presumed ICMS credit concession. The discount resulting from the early liquidation of Fundap's financing, he says, represents a tax benefit, which cannot compose the PIS and Cofins calculation basis.

“ICMS tax benefits or incentives do not generate an increase in equity, nor do they produce revenue or profit, insofar as they operate, in a transversal way, to reduce the tax burden. Therefore, as they do not represent an increase of any kind, they do not constitute taxable income”, says the magistrate.

One of the lawyers representing the company, Flavio Tudisco, from the Tudisco e Rodrigues Advogados office, says that the judge also took into account the judgment of the Superior Court of Justice (STJ) that analyzed ICMS presumed credit, which is a type of benefit, and agreed that the reasoning applied to Fundap, which is a deferral of ICMS with subsidized interest rates and sale of the asset at a discount. “The judge had to agree that Fundap is a benefit like any other”, he says.

Source: Valor Econômico