Last Tuesday, November 29, 2022, the 1st Panel of the Superior Court of Justice (STJ) began the trial of a relevant tax issue for retail: the incidence or not of PIS and COFINS on commercial bonuses and discounts obtained in the acquisition of goods.
The Federal Revenue Service has taken the position that “rebates received from suppliers by purchasers of goods, which do not reduce the value of the sales invoice and which are effective after its issuance, do not constitute unconditional discounts, but rather revenue for the purchaser, and as such are subject to taxation by Cofins” (Consultation Solution No. 542/2017).
So far, the outcome is favorable to taxpayers. Rapporteur Justice Regina Helena Costa presented an understanding that the discounts do not correspond to the company's revenue and, for this reason, cannot be used as a basis for calculating PIS and COFINS, which was supported by Justice Manoel Erhardt. There was then a request for approval by Justice Gurgel de Faria, suspending the judgment.
As a rule, commercial bonuses and discounts are concessions made in a purely business and commercial context, by the seller to the buyer, which may arise from various conditioning acts, resulting, for example and in the vast majority of cases, in a reduction in the price of the good (which implies a reduction in the acquisition cost) or in the delivery of a larger quantity than that initially stipulated by the parties. In turn, in the case of large retailers, they are generally also linked to sales performance, advertising and other promotional strategies.
Thus, the most recent discussions remain on how companies should qualify and classify the nature of these values in their accounting records, that is, whether or not they are considered revenue for the purposes of determining the PIS and COFINS calculation basis.
In a recent ruling by the 3rd Panel of the CSRF, the Council granted the taxpayer's appeal, ruling out the levy of PIS and COFINS on discounts obtained on the purchase of goods (case no. 10480.722794/2015-59). In this case, the prevailing understanding was that unconditional discounts and bonuses would not be considered revenue, and therefore, the aforementioned contributions would not be levied. This victory for the taxpayer could represent the beginning of a turning point in case law.
In the judicial sphere, the Regional Federal Court of the 4th Region, in a trial concluded in August 2022, in a rare decision, also ruled in favor of the matter, in the case of the taxpayer “WS Supermercados do Brasil”, understanding that the discounts and bonuses on goods obtained by the buyer would not constitute income subject to PIS and COFINS contributions.
Since the contributions must be levied on the revenue incorporated into the taxpayer's assets through the sale of goods and not on the revenue that is disincorporated to fulfill the contractual obligation to purchase the goods.
Furthermore, according to the aforementioned ruling by the 4th Regional Federal Court, “when purchasing at a discount, the taxpayer reduces its acquisition cost and this does not have the legal nature of revenue for the purposes of levying PIS and COFINS contributions”. The fact that the reduction in the acquisition cost increases net equity, adds the decision, “is not relevant because we are dealing with taxes that are not levied on positive equity changes, but on revenues” (case no. 5052835-04.2019.4.04.7100/RS).
In turn, the STJ has begun to analyze the case of the taxpayer “Cencosud Brasil”, which seeks to eliminate the charge made by the Brazilian Federal Revenue Service for not including amounts related to bonuses and discounts in the calculation of PIS and COFINS. Within this context, our team will monitor the reinclusion of the Special Appeal on the agenda for judgment, as well as any developments on this topic and is available for any clarifications.
