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STF rules on the constitutionality of including ICMS in the CPRB calculation basis

February 25, 2021

In a trial held on Tuesday (23/02), the Supreme Federal Court (STF) ruled that ICMS should be included in the calculation basis for the Social Security Contribution on Gross Revenue (CPRB). By a vote of seven to four, this was the thesis approved by the Plenary of the Supreme Court when judging RE No. 1,187,264.

The majority of the justices agreed with the dissenting opinion presented by Alexandre de Moraes. According to the justice, since the CPRB is a tax benefit, taxpayers who opt for this regime could not benefit from more beneficial rules that are not applicable to them. This is because, following the changes introduced by Law No. 13,161/2015, adherence to the CPRB regime became optional and the legislation began to determine the calculation of the contribution on gross revenue.

In the words of Minister Alexandre de Moraes: “according to current legislation, if net revenue includes gross revenue, minus, among others, applicable taxes, it means that, contrario sensu, gross revenue includes the taxes applicable thereto”. Along the same lines of argument, Minister Dias Toffoli followed the divergence by stating that excluding ICMS from the CPRB base would result in a new benefit not provided for by the legislator, thus creating a hybrid regime.

On the other hand, for the rapporteur Minister Marco Aurélio, if “gross revenue” and “revenue” are synonyms, then the precedents referring to the impossibility of including a tax in the concept of revenue, such as RE 574,706[1], apply to this CPRB case. According to the rapporteur, the inclusion of ICMS in the CPRB calculation basis would be incompatible with the Constitution.

Regarding the fiscal impacts that a decision contrary to this could generate, the Attorney General's Office of the National Treasury (PGFN) had already calculated that, if it were decided that the inclusion of ICMS in the CPRB calculation basis was unconstitutional, the public coffers would have to bear a loss of R$1.4T 9 billion to reimburse the total amount collected by taxpayers in the last five years.

[1] Judgment that defined that ICMS should not form the basis for calculating PIS and COFINS.

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