Some taxpayers are facing problems as refunds and compensation have been denied
06/07/2023
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Felipe Maia — Foto: Divulgação
The so-called “Thesis of the Century,” a Federal Supreme Court ruling that allowed the exclusion of ICMS sales tax from the calculation base of PIS and Cofins social taxes, generated billions of reais in credits for companies. But some of them are facing problems with the fiscal authority. Refunds and compensation have been denied.
Lawyers say this has happened to a specific group of taxpayers and is due to the way the payments that generated the credits were made. The losses amount to millions of reais.
Those who collect social taxes PIS and Cofins under the non-cumulative regime – almost all large companies – do not always have to use money to settle their taxes with the federal government.
The reason is that the calculation of PIS and Cofins involves a credit and debit system. In order to calculate the amount owed, the taxpayer must separate sales invoices, which detail sales in a given month, from purchase invoices, which contain the acquisition costs of the products that give rise to the credit, including inputs. After a setoff, the tax rate is applied to the result.
If the company has accumulated more credit than debit, it will not have to pay anything during the month. Moreover, if there is a credit left, it accumulates and can be used to calculate the taxes for the following month.
On the other hand, if the company had more debit than credit, it will have to disburse money for the PIS and Cofins payments.
The inclusion of ICMS in the tax base of PIS and Cofins, which was required by the government before the Supreme Court ruled otherwise, increased the amount of debt. As a result, companies had to use more credits than they should to pay their taxes, or were forced to pay more in cash.
In both situations, therefore, they were affected by the “Thesis of the Century” and are entitled to recover what they improperly paid to the government.
However, the Secretariat of Federal Revenue understands that there is a difference in how refunds should be dealt with. Therein lies the problem.
Those who used money and overpaid taxes to the government are entitled to receive what they overpaid in the form of a refund or compensation (using credits to pay current federal taxes).
But those who did not pay anything – because they accumulated more credits than debits in the calculation – did not have an “improper payment” in the eyes of the fiscal authority, but only an increase in the balance of credits – which is only used to calculate the PIS and Cofins themselves. Therefore, there would be no right to a refund or compensation.
“We have clients where this happened in isolation. Only in some months of the whole accounting period no payment was made. And we have clients where it happened for most of the period,” said Priscila Faricelli of the Demarest law firm.
In addition to the fact that the restitution by the federal government is quite limited – only for the payments of the PIS and the Cofins themselves – in these cases there is a reduction of the amount that the taxpayer believed he was entitled to.
Lawyers Rafael Vega and Gabriel Baccarini, of the Cascione Law Firm, point out, for example, that since it is an credit, the amount is not adjusted by inflation.
“And in relation to the thesis of the century, it can make a big difference in volume because the lawsuits are very old. There are taxpayers who have the right to receive funds from payments made since the early 2000s. Without adjusting this for inflation, the original credit is valid, what he overcompensated at that time”, Mr. Vega said.
Attorney Felipe Maia, a partner at the Azevedo Maia Advogados law firm, has at least two clients with this problem. One was trying to recover the amounts related to the “Thesis of the Century” in court.
The taxpayer believes he is entitled to R$45 million, but the tax authority said he should receive R$13 million – all the rest would be credit.
In a document attached to the lawsuit, the Federal Revenue states that the court rulings that guaranteed the taxpayer the right to recover what he overpaid “did not cite the use of excess credit.”
“I understand that this lack of manifestation does not allow the participation of this credit in the calculation of the credit from this writ of mandamus,” said a document signed by a tax auditor.
This case is before the Federal Regional Court of the 3rd Region (TRF-3) in São Paulo. The judge opened a period for the company to manifest itself. There is no decision yet.
In the other case, in which Felipe Maia works, the taxpayer estimates that he has about R$200 million to receive. But about R$45 million of this total would be credits.
Regarding the compensations, a situation in which the company calculated how much it should receive from the government and activated the amount in the tax authority’s system, lawyers say there are two situations.
One is less “dangerous.” The taxpayer activated the amount, but before the compensation, the tax authority initiated an inspection procedure – blocking the use of the credits – and warned that within the total amount notified there were amounts related to credits and that this specific portion cannot be used.
The other situation, however, involves the taxpayer who did not go through this previous audit and made the compensation. The Federal Revenue has up to five years to say whether the operation was correct or not. And this is where a taxpayer can face a huge loss.
If the tax authority believes the compensation was improper, the tax paid with the credit remains open and must be paid adjusted by inflation. The taxpayer is also subject to a 20% penalty.
Another consequence is that the credit can be lost in the meantime. The taxpayer has five years from the date of the decision guaranteeing the exclusion of ICMS from the calculation of PIS and Cofins to use the credit.
However, for the lawyer Felipe Maia, there is a way out for taxpayers. “Since the publication of Normative Instruction no. 1,300, published in 2012 by the Federal Revenue, the return of credit resulting from a lawsuit is now carried out exclusively through a writ of payment or administrative compensation,” he said.
Mr. Maia adds that this understanding applies to the reimbursement of IPI, PIS, and Cofins credits, as well as to the reimbursement of family allowance and maternity allowance payments, “whenever these types of reimbursement are the subject of lawsuits that, once concluded, grant the taxpayer a judicial enforcement title.”
“Moreover, any other form of payment could violate Article 100 of the Federal Constitution, which recognizes the credit through a judicial title,” the lawyer said.
The Federal Revenue and also the Attorney General’s Office of the National Treasury (PGFN) did not reply to our requests for comment.
*Por Joice Bacelo — São Paulo
Source: Valor International