26 tax cases at the STF in 2024; see list – 01/08/2024 – Market

The year 2024 begins with at least 26 major cases in the tax area pending decision in the STF (Supreme Federal Court).

In terms of value, the highlight is the disputes surrounding federal PIS and Cofins contributions, which hold the record for judicialization in the country and which will be extinguished in 2026 with the tax reform.

This year’s Budget contains a list of 16 tax cases in the Supreme Court with an estimated fiscal impact on the government of R$812.4 billion. PIS/Cofins, which finances expenses with security and unemployment insurance, for example, accounts for around R$600 billion.

Another ten shares listed do not have disclosed values. Many of them also deal with these two taxes.

Last year, the total value was R$1.4 billion, but there were solutions for some cases. The largest of them, with an estimated impact of R$473 billion, dealt with criteria for applying the non-cumulative nature of PIS/Cofins, with a decision favorable to the Union.

This year, there will be a change in the composition of the Court, which could help the government in some of these votes. In February, Flávio Dino takes office as the new minister of the STF. He was appointed by President Lula to succeed retired minister Rosa Weber.

In recent years, the Supreme Court has given priority to the tax agenda, providing solutions to relevant cases, such as the so-called “thesis of the century” lost by the Union and which dealt with the exclusion of several taxes from the PIS/Cofins calculation base.

Tatiana Del Giudice Cappa Chiaradia, partner at Candido Martins Advogados, states that in 2023 numerous tax issues with an impact on public coffers and taxpayers’ pockets will also be on the agenda. Last year, the court ruled on 27 issues of general repercussion in tax matters, according to data from the STF itself.

Among them, the issue of the so-called limit of res judicata in tax matters and the collection of the ICMS differential, both decisions favorable to the tax authorities.

Taxpayers, on the other hand, emerged victorious on issues such as the unconstitutionality of the additional isolated fine of 50%, applied when the Federal Revenue Service rejects requests for tax compensation, and the removal of the ICMS charge on internet advertising, maintaining only the ISS .

Emblematic cases remain pending for judgment, such as the issue of the exclusion of the ISS from the PIS/Cofins calculation bases, among other “children” of the thesis of the century judgment.

“The big challenge here will be the significant change in the composition of the Court, which could bring unwanted surprises to taxpayers. We hope that the same understanding is respected”, says the tax expert.

It also highlights a topic that is not on the list presented in the Budget, but has a relevant impact, which is the definition of the incidence of social security contributions on the third of vacation. In this case, an unfavorable result for taxpayers has already been given, but Chiaradia states that numerous essential and essential points for understanding the issue are pending due to the appeals presented by the parties.

“We hope, once again, that the Court’s understanding established in other cases similar to this one is respected, aiming to protect jurisprudence and legal certainty in order to exclude taxation of the vacations under discussion.”

David Andrade Silva, tax specialist and partner at Andrade Silva Advogados, also states that the change in the composition of the court, with a new minister aligned with a government that has an agenda of increasing revenue, is a factor of concern for taxpayers.

He says he hopes, however, that the Supreme Court will maintain coherence, for example, when dealing with cases arising from the thesis of the century, which dealt with the exclusion of ICMS from the PIS/Cofins base. Requests to also exclude the ISS and PIS/Cofins from its base are pending.

According to the lawyer, historically, taxpayers lose the majority of tax cases in higher courts, with the thesis of the century being one of the exceptions.

“The Supreme Court does not have a history of respecting its own jurisprudence. This creates a great deal of legal uncertainty. Eventually, it decides in one direction and, years later, goes in another completely opposite direction, sometimes due to the new composition of the court”, says the tax expert.

See below some highlighted pending cases.

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Some highlighted tax topics for 2024

1) PIS/Cofins-import

• Extraordinary appeal discussing the requirement for a complementary law to institute import contributions and the possibility, or not, of retroactive application of Law No. 10,865/2004, which created a concept of specific customs value for these contributions
• Status: Awaiting trial.
• Impact: R$325 billion

2) PIS/Cofins on financial institution revenue

• The enforceability of taxes on the financial income of these institutions is discussed
• Situation: Government victory in the discussion of the merits. Awaits embargo analysis
• Impact: R$115.2 billion

3) Personal Income Tax – deduction of education expenses

• The Federal Council of the OAB filed a Direct Action of Unconstitutionality against the limits for deducting education expenses
• Status: Awaiting judgment
• Impact: R$105 billion

4) Exclusion of PIS/Cofins from its own calculation base

• Another “child” of the thesis of the century (ICMS based on PIS/Cofins)
• Status: Awaiting trial.
• Impact: R$65.7 billion

5) Reintegration refund

• Return of tax residues in Reintegra.
• Status: Request for prominence by Minister Luiz Fux.
• Impact: R$49.9 billion

6) Inclusion of the ISS in the PIS/Cofins base

• “Child” of the thesis of the century (ICMS based on PIS/Cofins)
• Status: Request for prominence by Minister Luiz Fux.
• Impact: R$35.4 billion

7) Incidence of PIS/Cofins on income from rental of movable and immovable assets (two trials)

• Extraordinary appeal in which the constitutionality of the incidence of the contribution on rental income is discussed.
• Status: Awaiting trial.
• Impact (total): R$36.2 billion

8) Provides shipping abroad

• The constitutionality of the contribution on remittances abroad as royalties and remuneration for technical services, administrative assistance and the like, established by Law 10,168/2000, is discussed.
• Status: Awaiting trial.
• Impact: R$19.6 billion

9) Exclusion of presumed ICMS credit from the PIS/Cofins base

• Another “puppy” thesis. Exclusion of amounts corresponding to presumed ICMS credits arising from tax incentives granted by the states and the Federal District.
• Status: Process highlighted in the virtual trial.
• Impact: R$16.5 billion

10) INSS on third of vacation

• The modulation of the effects of the STF decision on the constitutionality of the incidence of social security contributions on the constitutional third of vacations is discussed.
• Status: Request for prominence by Minister Luiz Fux.
• Impact: R$80 billion to R$100 billion

Other cases in the STF queue

• Maintenance of ICMS credits related to internal operations prior to interstate operations with petroleum-derived fuels immune to tax due to the state of origin (Theme 1,258)
• Collection of PIS/Cofins from supplementary pension entities (Theme 1,280)
• Social security contribution payable by the employee on the maternity salary paid by Social Security (Theme 1,274)
• Constitutionality of fire prevention and fighting, search, rescue and rescue fees established by states (Theme 1,282)
• Mato Grosso state mining tax (ADI 7,400)
• End of Carf’s quality vote (ADI nº 6403)
• PIS/Cofins and CSLL on cooperative acts (RE 672.215)
• Progressive rates on social security contributions for federal employees (RE 1,384,562)

Sources: Candido Martins Advogados Office and Tax Risk Annex of the 2024 Budget/National Treasury. Values ​​calculated by the federal government. For the vacation third, the numbers are from Abat (Brazilian Tax Law Association).

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