Federal Supreme Court to rule on the concept of input material for crediting indirect taxes

Credit: Cristiane Bonfanti - JOTA

VIRTUAL TRIAL

Process: RE 841979 (Tema 756) Parts: Unilever Brasil Industrial Ltda. X União Relator: Dias Toffoli The Federal Supreme Court (STF) will begin to judge next week the appeal that discusses the concept of input for obtaining PIS and COFINS credits. The appeal was included in the virtual trial agenda that runs from November 18 to 25. The Union estimates a loss of R$ 472.7 billion to public coffers in five years if it is defeated in the process, according to data from the Budget Guidelines Law (LDO) 2023.

In the specific case, the Justices will analyze, in an appeal filed by Unilever Brasil Industrial Ltda., whether expenses with advertising, publicity, brokerage, surveillance, cleaning and maintenance, among others, are inputs, and therefore generate PIS and COFINS credits. The Court will interpret article 195, § 12, of the Federal Constitution, which deals with the economic activity sectors for which contributions will be considered non-cumulative.

The decision in the Supreme Court may represent a reversal in relation to what has already been decided by the Superior Court of Justice (STJ) three years ago on the subject. In 2018, in a repetitive appeal, in REsp 1.221.170/PR, the 1st Section of the STJ defined that "the concept of input material should be assessed in light of the criteria of essentiality or relevance, that is, considering the indispensability or importance of a certain item - goods or services - for the development of the economic activity performed by the taxpayer."