ICMS is now excluded from the PIS/COFINS Credit Calculation Base

Since the Supreme Federal Court’s decision in RE 574,706, which had widespread repercussions, ICMS has been excluded from the tax base for PIS/COFINS payments. In other words, when goods are sold, taxpayers were authorized by the Supreme Federal Court to deduct the corresponding ICMS for purposes of determining the tax base for these contributions.

However, the STF’s decision did not affect taxpayers’ rights to credit when purchasing the same goods, so to speak.

Thus, with the clear aim of increasing revenue, the Provisional Measure was issued that amends Laws 10.637/2002 and 10.833/2003, to prohibit the right to credit on ICMS applicable to transactions, with the consequent exclusion of the value highlighted in the purchase invoice.

The new rules come into effect from May 2023.