On January 18, 2023, the court of the 11th Federal Civil Court of the Judicial Sub-Section of São Paulo granted the preliminary injunction requested by the Center of Industries of the State of São Paulo (CIESP) so that associated companies can collect PIS and COFINS contributions on financial income with reduced rates of 0.33% and 2%, respectively, as determined by Decree No. 11,322/2022.

We contextualize that, on December 30, 2022, Decree No. 11,322/2022 was published, which reduced the PIS and COFINS rates, levied on financial income, from 0.65% to 0.33%, and 4% to 2%, respectively; establishing immediate validity and production of effects from January 1, 2023.

It so happened that, during the transition to the current Government, Decree No. 11,374/2023 was issued, published on January 2, 2023, which revoked the previous Decree (No. 11,322/2022) and determined the reinstatement of the rates previously in force (0.65% – PIS and 4% – COFINS). However, the “new” revoking decree was published and took effect on the date of its publication (02/01/2023).

In view of this change, it is possible to argue that this increase in social security contribution rates could only come into effect 90 days after the publication of the decree. Along these lines, in the aforementioned decision on the preliminary request by CIESP, Judge Regilena Emy Fukui Bolognesi highlighted that the issue consists of the applicability of the principle of 90-day prior notice to Decree No. 11,374/2023, as provided for in article 195, § 6, of the Federal Constitution, which prohibits the requirement of the aforementioned contributions before ninety days have elapsed from the date of publication of the law that instituted or modified them. It is also worth noting that the principle of 90-day prior notice was recognized by the Supreme Federal Court as a true fundamental guarantee to the taxpayer.

For these reasons, the decision allowed CIESP members to collect PIS and COFINS on financial revenues at rates of 0.33% and 2%, respectively. The 90-day period is counted from the date of publication of Decree No. 11,374/2023. It is important to highlight that this is not a final decision, but a provisional one, which may be subject to change during the course of the proceedings, and such decision may not be replicated by other judges.

For further information, our team is available to provide any clarifications that may be necessary.