Translated official summary of tax rules issue

Starting this series of translations of relevant, in force Brazilian legal texts into English, specially summaries and navigation instructions in governmental websites, so as to make the task of any researcher with a knowledge of English easier, we publish this short summary of PARECER NORMATIVO COSIT NR 1, OF MARCH 31, 2017 on its dowload page at this address belonging to the Tax Dept. of Brasil (Receita Federal):

These translations are human-made, have an explanatory bias and are subject to change. They seek to be exact in spite of being absolutely informal and non official or certified in any way. The idea is for them to be practical, self-sufficient and useful for all concerned professionals. This may also turn out to be helpful for government or state employees – for instance, when creating English versions of websites

Please consider that they are done quickly, therefore you will certainly find terminology inconsistencies, grammar, spelling and syntax faults and translation misunderstandings – these are to be dealt with as the work develops.

It’s a bit early for corrections by the audience, but if you have any and feel like letting us know now, please email us at Suggestions and any sort of observation or comment are also welcome.

The translator, Marco Juliano e Silva, hereby donates this translation for universal, public use of any purpose whatsoever, requesting only that its authorship and the link to its place of first publication (this webpage) be mentioned.


Tax Administration Rules

Inclusion of ICMS (Goods and Services Circulation Tax) into the Calculation Basis for Pis (Programa de Integração Social/Pasep (Program for Social Integration and Program for the Construction of Public Employees Patrimony) -Importation and Cofins (Social Security Financing Tax) taxes.

Declaration of Unconstitutionality. General Repercussion. Applicable to RFB (Brazilian Federal Income Tax Department) activities.

Refund. Procedures. Acknowledgement by the Supreme Federal Court (STF), in the judgement of RE (Special Appeal) number 559.937, of the unconstitutionality of including ICMS and also of the very foundations for the calculation of the PIS/Pasep-Importation and Cofins-Importation excise upon importation operations.

The STF ruling concerning a special appeal under article 543-B of Law 5.869, of January 11, 1973 (former Civil Process Code), reproduced in art. 1.035 of Law 13.105, of March 16, 2014 (Civil Process Code), applies to the Federal Tax Dept. (RFB) procedures, including those acknowledging undue tax payments, as of the date of awareness of the Explanatory Note to which article 3 of Joint Ordinance PGFN (Attorney-General of the Ministry of Finance)/RFB number 1 of 2014 refers.

This submission of RFB to STF’s ruling implies the acknowledgment of the unconstitutionality of excise (undue payment, or in excess), but does not imply an obligation to grant refund requests without a prior analysis concerning the actual existence or availability of the credit rights before the RFB. Care should be exerted in order to avoid a double refund of such value.

If the passive subject is under a non-cumulative assessment regime of the PIS/Pasep and Cofins excise, he may use the [his] credits resulting from the excessive Payment made to PIS/Pasep-Importation and of Cofins-Importation in order to obtain reductions in those [Payments] which, legal conditions complied with, may engender a refundable or compensating credit with other taxes managed by the RFB.

If the passive subject is a part in an ongoing legal proceeding in which he challenges the said undue tax debts/payments and does not fall in credit utilization cases under the non-cumulative assessment regime of the excises, it is possible to request its refund, under Normative Instruction RFB 1.3002, of 2012.

If, on the other hand, the passive subject is not an part in an ongoing legal proceeding in which he pursues the refund of an undue payment, he must wait until the matter is judged for then to take advantage, within the administrative sphere, of the credit right legally acknowledged, with a prior validation of the credit via a compensation statement.

Marco Juliano e Silva

São Paulo, June 22, 2017