STF decides in favor of companies and inflicts a loss of R$ 16.5 billion on the government

By 7 votes to 4, the STF decided to exclude presumed ICMS credits from the calculation base of PIS and Cofins. Read on Gazeta do Povo.

STF decides in favor of companies and inflicts a loss of R$ 16.5 billion on the government

TL;DR

  • The STF ruled that presumed ICMS credits are not to be included in the calculation base for PIS and Cofins.
  • The decision was made by a 7-4 vote.
  • The court views these credits as fiscal waivers to stimulate regional economic activity, not as company revenue.
  • The government estimates a potential loss of R$ 16.5 billion over five years due to this decision.
  • The ruling follows the understanding that tax reductions via incentives do not represent new wealth for taxpayers.

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