The Superior Court of Justice (STJ) finalized the judgment of Special Appeal 1.221.170, which reviewed the concept of inputs eligible for  granting PIS and COFINS credits.

The majority of the court deemed Normative Instructions 247 and 404 illegal because they borrowed the concept of inputs from the Excise Tax (IPI) legislation, thus applying this concept for purposes of PIS and COFINS credits. The Court also found that the concept of inputs should correspond to expenses which are “essential” and “relevant” to the company’s business activities. The scope for the concept of inputs should be more clearly identified once the full content of the decision is made public.

The Administrative Council of Tax Appeals (CARF) has recently issued decisions already broadening the scope of inputs for PIS and COFINS, but using different criteria in each case. This is a relevant precedent, because it is binding to the federal courts and the CARF.

For further information, please contact:

Henrique Lopes

Tatiana Vikanis

Victor Polizelli

Álvaro Lucasechi






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