In a unanimous decision, the Administrative Council for Tax Appeals (Carf) recognized the right of a multinational beverage company to exclude ICMS from the calculation base of contributions for PIS and Cofins, even under the special cold beverages tax regime. This decision, formalized in Opinion No. 3302-014.106, represents an important milestone for companies in various sectors operating under special tax regimes, including the bioenergy sector in ethanol operations.
The rapporteur of the case, Mariel Orsi Gameiro, emphasized that the concept of revenue or invoicing should not be limited by the tax form. “It is worth mentioning that there is an inclusion of ICMS, and the way in which it is calculated is through the coefficients of the PIS and Cofins rates, which will influence the amount to be demanded for contributions, according to the liter unit,” said Gameiro. She underscored that the adoption of the special regime, based on the measurement per liter unit and average market prices, does not undermine the constitutional concept of revenue and invoicing, according to the jurisprudence established by the Supreme Federal Court (STF) in RE 574.706.
Otávio Massa, a tax specialist certified by the Federal Institute of Rio Grande do Sul (IFRS) and CEO of Evoinc, commented on the importance of the decision: “With Carf’s approval on this issue, the exclusion of ICMS from PIS/Cofins in tax-exempt operations becomes more legally secure. Both the Brazilian Federal Revenue Service (RFB) and the Judiciary have made misguided decisions on the topic, generating fear and uncertainty for taxpayers. It was a decision eagerly awaited by us.”
The Carf’s decision also criticized Cosit’s Consultation Solution No. 177, dated May 31, 2019, which had been used as the basis for the tax assessment. According to the ruling, this consultation solution, initially applied to the fuels sector, has been legally contested due to a technically flawed understanding, as per other first-instance judicial decisions.
For the beverage multinational, the decision ensures a billion-dollar savings in PIS/Cofins payments, illustrating how efficient tax advice can identify tax optimization opportunities, ensuring greater financial sustainability and competitiveness for its clients. “This Carf decision sets an important precedent for the beverage sector and other industries subject to special tax regimes, consolidating a fairer interpretation aligned with constitutional principles,” said Massa.
The impact of this decision is broad and can benefit numerous companies operating under special tax regimes. Otávio Massa advises that other companies interested in pursuing this right should first conduct a detailed analysis of their tax operations and then file lawsuits or administrative appeals. “I recommend that companies consult their legal and tax departments to assess the feasibility of claiming the exclusion of ICMS from the PIS/Cofins calculation basis. This Carf precedent strengthens the legal argumentation and increases the chances of success in court,” Massa concluded.
The fallout from this case can influence future administrative and judicial decisions, providing greater clarity and legal certainty for Brazilian companies regarding the taxation of their revenues and commercial operations.
Source: Otávio Massa, tax lawyer specializing at the Federal Institute of Rio Grande do Sul (IFRS) and CEO of Evoinc.
