STF Rules State ICMS Tax Credits Do Not Count Toward PIS/Cofins Base

Overview

• The Supreme Court decided on Wednesday that créditos presumidos de ICMS do not integrate the federal PIS and Cofins tax base, and the ruling was issued by a 6–4 vote.
• The plenary fixed the relator Marco Aurélio Mello’s thesis as Tema 843, which creates a binding rule for lower courts and administrative disputes across Brazil.
• Ministers Edson Fachin and Cármen Lúcia joined the relator’s position along with four previously retired ministers who had recorded votes against taxation, while Alexandre de Moraes, Gilmar Mendes, Luiz Fux and Nunes Marques dissented.
• The federal government estimates the ruling could reduce revenue by about R$16.5 billion, and dissenting justices warned of strains on the federal-state fiscal pact.
• The decision preserves the practical value of state tax incentives by treating créditos presumidos as state revenue renunciation rather than company income, which will prompt widespread tax reassessments, administrative adjustments and immediate relief for affected companies.