*Conape Auditoria Contábil e Tributária
In Brazil, the tax reform – urgently and necessary – passes through the ICMS, a tax levied by 27 units of the federation, with its own legislations and with different values. It is very difficult for the business community to deal with this complexity and the tax reform necessarily involves correcting the problem.
This week, crucial for the federal government, brought a significant defeat for the government: the Federal Supreme Court, in response to the lawsuits filed by companies and class associations, was contested by the vote that has included the ICMS in the PIS calculation base and the Cofins.
1 – What is the implication for companies of ICMS (related to IVA just that here in Brasil all taxes are separated) not to be included in the calculation basis of PIS (Social Integration Programs and Civil Servants’ Patrimony Formation Programs) and Cofins (Contribution for Financing Social Security)?
A – For companies does not change, since whoever pays always is the final consumer, because the higher the tax, the higher its cost. The company is a mere tax-payer that charges the client and transfers to the governments.
2 – What this result Impacts for the Nation?
A – Of course that lower revenues impact negatively investments in health, education, public safety, etc.
3 – Why ICMS was defined as a concept strange to the billing and therefore does not compose the basis of calculation of social contributions?
A – In fact ICMS is not billing, the Federal Supreme Court has correctly decided: ICMS such as well as the IPI is a tax that the businessman charges from his client and passes on to the government, ie is a third party resource that travels through the company and as it does not belong to you it should not be considered billing.
4 – Why do some insist, and especially the Minister Edson Fachin, that the value of the ICMS highlighted in the note, due and collected by the company, compose its invoice?
R – I think the Minister of the Federal Supreme Court thought more of the social side, considering that the decrease in the collection, impacts on smaller investments in the social area. He has decided more politically than technically.
5. Do you believe that there could be embargoes of tax declaration?
A – As I said before, it is possible in view of social issues.
6 – Can they be taxed for the contributions to PIS and Cofins as part of the concept of gross revenue, basis for calculating these obligations?
A – I understand that yes, since the tax is always calculated by inside and not by out, that is, the tax is included and then recalculated with it inlaid, as all other taxes are thus calculated. Example ICMS: aliquot of 12% ends up being 13.64%, 18% is 21.95%, 25% is 33.33%
7- Can there be other taxes that replace ICMS?
I have no doubt that this will happen. The government is already talking about increasing CIDE fuels (Contribution of intervention in the economic field incident on the operations carried out with fuels), to compensate the loss with the collection in view of the exclusion of ICMS in the calculation base of PIS and Cofins.
8 – Will the government reimburse the taxes (PIS and Cofins) of companies that have filed lawsuits over these 20 years?
A – Yes to all companies, either in the form of compensation or compensation.
9 – How will this compensation be given?
A – The active companies can deduct from the federal taxes or, future taxes to win) and those inactive, through compensation.
10 – Does this reimbursement of R $ 250 billion have to do with the supposed increase in CID fuel?
Yes totally, even though the Union has in its budget the exact amount of how much it should be spent throughout the year and that amount must have revenue coming from somewhere and that place should be the complement of CidD fuels.
11- And why exactly from this specific tax?
A. Because it’s what’s easy to collect. It is already created, it is just raise the rate. It comes into force 90 days later and is a tax whose margin of avoidance is almost zero.