STF Says Presumed ICMS Credits Do Not Count Toward PIS/Cofins

Overview

• The Supreme Court decided on October 7 that state presumed ICMS credits granted as fiscal incentives do not form part of the federal PIS and Cofins tax base, removing one disputed item companies had been taxed on.
• The Superior Court of Justice recently aligned with the same strand by ruling that the ICMS‑Difal is excluded from the PIS/Cofins base and set that effect back to March 15, 2017 for qualifying cases, creating retroactivity for some taxpayers.
• The STF has resumed hearings on whether municipal ISS must be excluded from the PIS/Cofins base, a pending question that could further change tax bills for service providers nationwide.
• Administrative practice matters because the Procuradoria‑Geral da Fazenda Nacional has begun recognizing several judicial theses, but modulation rules, possible embargos and publication of acórdãos will decide who may actually recover past payments.
• Companies face an urgent timing constraint because the five‑year limitation for refund claims counts from each payment and continues to run ahead of the 2027 replacement of PIS/Cofins by the CBS, so delaying claims risks loss of recoverable amounts.