Contribution from banks: STF has majority in favor of the Union – 06/12/2023 – Market

The STF (Supreme Federal Court) formed a majority this Monday (12) in favor of the government in a billionaire judgment that involves the taxation of financial intermediation in the period from 2000 to 2014.

The judgment deals with the collection of PIS and Cofins social contributions, which are levied on billing.

In the action, banks and other entities in the financial sector defend the thesis that their income from financial intermediation, such as loans and financing, should not be considered as revenues in this period.

The impact on public coffers, if this thesis prevailed, could reach R$ 115 billion. The controversy involved whether intermediation taxation had financial validity before 2014, when a law on the subject amended previous legislation.

The vote followed by most ministers was Dias Toffoli, who spoke in favor of the Union.

In his vote, Toffoli establishes the thesis that “the gross operating revenues arising from the typical business activity of financial institutions are part of the PIS/Cofins calculation basis charged in view of those under Law No. legally prescribed exclusions and deductions”.

He was accompanied by ministers Gilmar Mendes, Cármen Lúcia, Alexandre de Moraes, Luís Roberto Barroso and Kassio Nunes Marques.

The case’s rapporteur, retired minister Ricardo Lewandowski, spoke out against the Union’s claim. For him, the concept of invoicing for the collection of PIS/Cofins from financial institutions should consider revenue from the sale of products and services.

Edson Fachin declared himself impeded and did not participate in the trial. The trial will conclude at midnight on Monday.

In 2005, banks began to resort to Justice to restrict PIS/Cofins taxation. At the time, when judging the case of a company in the commercial sector, the STF understood that these taxes should only be paid on revenues from the sale of goods or provision of services.

Non-operating income, such as rent and sale of properties, and financial income from investments were excluded.

Based on this understanding, the banks went to court to collect taxes only on the provision of some services, such as charging fees, and many obtained favorable decisions.

The Union has always positioned itself against this understanding. There are technical arguments about the legal-constitutional concept of billing, since the typical activity of these institutions is precisely financial intermediation, and also the assessment that there would be unequal treatment for sectors that are among those with the most conditions to contribute.