- Brazil’s Supreme Federal Court (STF) ruled that ISS (municipal services tax) must be excluded from the PIS/Cofins tax base, extending the logic previously applied to ICMS.
- The ruling is binding, but the Court has not yet fixed the date from which it will apply; that will be decided in later clarification motions.
- A proposed cutoff would be the publication date of the judgment minutes, which could preserve only lawsuits and administrative proceedings already pending by then; the earlier ICMS case used the merits judgment date instead.
- Service providers that have not yet challenged the issue are being advised to act quickly, ideally before publication of the minutes, to preserve the chance to recover ISS included in PIS/Cofins paid in the last five years.
- Since PIS/Cofins will be replaced by CBS on 1 January 2027, the practical value is mainly retrospective recovery, not future savings.
Source: bvalaw.com.br
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
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