On August 28, the Supreme Federal Court (STF) began the judgement on the exclusion of ISS (Service Tax) from the tax bases of PIS and Cofins. This issue, which holds significant relevance for companies and federal revenue, has sparked intense debate within the legal community.
The controversy began with the argument put forward by taxpayers, asserting that ISS, like ICMS, should not be included in the tax base for PIS and Cofins. This position is based on the claim that these amounts do not constitute the company’s own revenue or sales but are instead sums that are merely passed on to the tax authorities.
The debate intensified after the “Theme 69” ruling in 2017, when the STF decided to exclude ICMS from the PIS and Cofins tax base. That ruling became known as “the thesis of the century” and set a precedent for other similar discussions, such as the current one concerning ISS.
In the ongoing case, most justices have already expressed support for the taxpayers, with a score of four votes to two against the federal government. One of the decisive votes was cast by Justice André Mendonça, who followed the reasoning established in the “Theme 69” case, advocating for the exclusion of ISS from the PIS and Cofins tax bases.
The central point of the debate is the definition of “revenue” for the purposes of PIS and Cofins contributions. Advocates of exclusion argue that ISS, like ICMS, does not represent a company’s own revenue but is instead an amount that temporarily passes through the company’s accounts and is intended for the government. On the other hand, the justices voting in favor of the federal government contend that ISS forms part of the cost of economic activity and, therefore, should be included in the concept of gross revenue.
The judgement has not yet been concluded, and the topic is expected to return to the STF’s agenda soon. With general repercussion recognized, the decision will impact all similar cases pending in the courts, bringing legal certainty and uniformity in the application of the law.