STF judges billionaire contribution of banks and insurance companies – 06/01/2023 – Market

The Federal Supreme Court (STF) resumes this Friday (2) a billionaire judgment involving the taxation of financial intermediation in the period from 2000 to 2014.

Losses for the Union in case of defeat are estimated at at least R$ 115 billion, the second highest amount involving tax lawsuits in the last instance of the Judiciary.

The controversy (Theme 372) is about the collection of PIS and Cofins social contributions, which are levied on billing.

The thesis defended by the financial sector —banks, brokerages and insurance companies— is that income from financial intermediation, such as loans and financing, should not be considered as billing during this period. The same applies to insurance premiums.

This understanding would be applied until 2014, when a new law (12,973) clarified that these revenues are indeed taxed.

So far, only the rapporteur of the case, former Minister Ricardo Lewandowski, has presented his vote – against the Union’s election. 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.

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 determined that these taxes should be collected only 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.

In case of victory, these institutions can recover the tribute paid in the five years prior to the actions, since 2000 in some cases, until the enactment of the 2014 law.

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.

In 2013, the government even launched an installment program for institutions that wanted to clear these debts and drop the lawsuits, but there are still hundreds of cases in court.

The trial will resume in virtual plenary after Minister Dias Toffoli’s request for a view and is scheduled to go until June 12th.