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Supreme Federal Court limits states force of taxation

 Wednesday, March 15, 2017

The Plenary of the Brazilian Federal Supreme Court (STF), in session on Wednesday (15), decided that the tax on the Circulation of Goods and Services (ICMS) does not include the basis for calculating the contributions to the Social Integration Program (PIS) And the Contribution to the Financing of Social Security (Cofins).

In the judgment of Extraordinary Appeal (RE) 574706, with a recognized generally repercussion, the vote of the reporter, justice Cármen Lúcia, prevailed,  in the purport that ICMS tax collection does not represent revenue, representing only cash inflow or to be fully passed on to the State treasury. The thesis of general repercussions established was that "The ICMS does not make up the calculation base for purposes of incidence of PIS and Cofins". The STF's positioning should be followed in more than 10,000 processes that have been stopped in other instances.



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