Lewandowski suspends actions against repeal of decree that reduced taxes for large companies – 03/08/2023 – What tax is this

Minister Ricardo Lewandowski, of the STF (Federal Supreme Court), responded this Wednesday (8) to a request from the Luiz Inácio Lula da Silva (PT) government for the validity of the repeal of the decree of the Jair Bolsonaro (PL) management that cut the half the tax rates paid by large companies.

The decree was signed by then vice-president Hamilton Mourão on the eve of the end of his term and displeased members of the new government. He had cut the PIS and Cofins rates in half on the financial income of these companies.

Shortly after taking office, Lula revoked the measure, which could have an impact of BRL 5.8 billion on revenues in the first year of the PT’s administration.

In his decision, Lewandowski determined that “the effectiveness of judicial decisions that, expressly or tacitly”, considered Lula’s revocation of the decree invalid.

“In its short term in the legal system, Decree 11.322/2022 was not applied to the concrete case, as there was not even a business day to enable the earning of financial income —that is, as the taxable event did not occur, the taxpayer did not acquire the right to submit to the tax regime that never came into force”, said Lewandowski in his decision.

He also determined that the case be analyzed in a virtual plenary from March 17 to 24.

Non-cumulative regime companies pay a 9.65% PIS/Cofins rate on their revenues. This percentage drops to 4.65% when it comes to financial income —obtained with income from investments in the market, such as fixed income securities, in addition to interest charged from suppliers or discounts obtained by companies.

With the decree of the Bolsonaro government, the rate would be reduced to 2.33% as of January 1, 2023.

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