On 13 May 2021, the Brazilian Supreme Court clarified aspects of a previous 2017 decision, which stated that the inclusion of the ICMS (state VAT) in the calculation base of PIS and COFINS (federal social security contributions) was unconstitutional. The court clarified that the ICMS amount disclosed in sales invoices should be used to calculate the amount of ICMS excluded from the PIS and COFINS calculation base. In addition, the court determined that the prior ruling had retroactive effect as from 15 March 2017, but taxpayers that filed a lawsuit up to 15 March 2017 may recover amounts for the five-year period prior to the date of filing the lawsuit.
Source Deloitte
