Brazil’s Supreme Court (STF) issued a decision on 13 May 2021 that lays to rest a nearly 20-year old debate in the national courts as to whether VAT levied by the Brazilian states on the sale of goods (ICMS) should be included in the tax base of two federal taxes levied on gross revenue (i.e., Contribution to the Social Integration Program (PIS) and Contribution for Social Security Funding (COFINS)). In a taxpayer-favourable decision, the court ruled that the amount of ICMS indicated on a sales invoice should be excluded in calculating the PIS/COFINS tax base, and the court specifically limited the temporal effects of its decision.
Source BDO
