On 06/04/2024, Provisional Measure (“MP”) 1,227/2024 was published, which, among other measures, limited the hypotheses for offsetting taxes administered by the Brazilian Federal Revenue Service, and also brought about the revocation of hypotheses for reimbursement and offsetting of credit balances and presumed credits of non-cumulative PIS and COFINS contributions.
The MP also establishes new conditions for the enjoyment of tax benefits and provides for the delegation of competence to the Federal District and Municipalities for the judgment of administrative tax proceedings related to ITR (Tax on Rural Territorial Property).
Well, regarding the limitation on the offsetting of PIS/COFINS credits, article 5 of the MP included item XI to §3 of article 74 of Law No. 9,430/1996, establishing that PIS/COFINS credits calculated under the non-cumulative regime may only be offset against debits of these same contributions. See:
Art. 74. The taxpayer who determines credit, including final and binding judicial decisions, relating to a tax or contribution administered by the Federal Revenue Service, subject to refund or reimbursement, may use it to offset their own debts relating to any taxes and contributions administered by that Agency.
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§ 3 In addition to the hypotheses provided for in the specific laws of each tax or contribution, cannot be subject to compensation upon delivery, by the taxpayer, of the declaration referred to in § 1:
XI – the credit of the non-cumulative incidence regime of the contribution to PIS/PASEP and COFINS, except with debit of the aforementioned contributions, starting from June 4, 2024. “ (Included by Provisional Measure No. 1,227, of June 4, 2024)
Therefore, taxpayers who have credits from the non-cumulative PIS and COFINS regime will no longer be able to use them to offset other federal taxes as was previously done. Therefore, it will only be possible to use the accumulated credits to offset PIS and COFINS itself. Furthermore, the possibility of refunding credits related to contributions was maintained.
Furthermore, the Provisional Measure also revokes several provisions that dealt with reimbursement in kind and compensation of balances of PIS/COFINS credits and presumed credits.
According to the Federal Government, this measure aims to achieve fiscal balance and revenue collection, given the large expenditures made by the government this year that lead to important and harmful consequences for taxpayers. For example, companies whose operations involve the compensation of different taxes administered by the Brazilian Federal Revenue Service.
In this context, there is no doubt that the changes introduced by Provisional Measure No. 1,227/2024 can and should be challenged in court by taxpayers who were impacted by the limitations on the use of PIS/COFINS credits. We understand that in addition to possible allegations of unconstitutionality, it is of utmost importance that the constitutional principle of tax precedence be respected, given the increase in taxation.
Our team is available to provide any clarification on this topic.