In a recent ruling, the 2^nd Federal Court of Mogi das Cruzes (SP) granted relief to a company’s request to be authorized to include ICMS [Goods and Services Tax] in the calculation base of PIS [Social Integration Program] and Cofins [Turnover Tax on Gross Profits] credits (Writ of Mandamus #5001361-70.2023.4.03.6133).

It is important to highlight that on May 30, 2023, Federal Law 14,592/2023 was published in the Official Gazette, incorporating sections of Provisional Measure #1,159/23, which addressed the exclusion of ICMS from the calculation base of PIS and Cofins credits, adjusting the legislation due to a decision by the Federal Supreme Court (Extraordinary Appeal #574,706 – Theme 69 of the General Repercussion).

With the enactment of the new law, dissatisfied taxpayers began to approach the Judiciary seeking to include ICMS in the acquisition cost for the purpose of crediting PIS/Cofins, alleging the illegality and unconstitutionality of the new legal determination, given that the credit base is different from that used for the calculation of PIS and Cofins contributions.

The Judiciary has correctly been granting the request in favor of the taxpayers. As seen in the aforementioned decision, the 26^th Federal Court of Rio de Janeiro, in case #5005005-17.2023.4.02.0000, also decided to grant the same right to a gas sector company. According to the presiding judge in this case, the exclusion of ICMS from the calculation base of PIS and Cofins credits “significantly and substantially increases the taxpayer’s tax burden.”

Therefore, both decisions contribute to the formation of jurisprudence on the matter, in the sense of setting aside the legislation that determined the exclusion of ICMS from the bases of PIS and Cofins credits, and they represent a relevant opportunity for taxpayers who decide to approach the Judiciary, as they may benefit, in practice, from a significant reduction in the tax burden.