The ruling on the Thesis of the Century may influence the discussion on the taxation of 1/3 of vacation pay

The Supreme Federal Court (STF) recognized that the ICMS to be excluded from the PIS and COFINS tax bases is the one highlighted on the invoice. The effects of the decision were modulated and apply only to taxable events occurring after March 15, 2017, the date on which the precedent was established by the Court.

However, taxpayers who filed legal action up to that date have the right to recover the tax credit unduly paid.

On the other hand, in Issue 985, the Supreme Federal Court (STF) ruled that the levy of social security contributions on amounts paid by the employer as a third of the constitutional vacation allowance is constitutional. However, a motion for clarification filed by the taxpayer and amicus curiae seeking to modulate the effects of the decision is pending judgment. The justification for this is quite simple: case law was settled to the contrary, including a precedent from the Superior Court of Justice (STJ) in repetitive appeals, recognizing that social security contributions should not be levied on this specific amount.

Anyone who had the opportunity to follow the trial of the so-called thesis of the century noticed that the main reason for modulating the effects of the decision was the fact that there was a dominant jurisprudence that considered the inclusion of ICMS in the PIS/COFINS calculation base to be legitimate.

For logical coherence, the majority of Ministers who voted for the modulation of effects must maintain their position in the case in which the taxation of the constitutional third of vacation pay is discussed.

Questions, however, are beginning to arise, such as: will taxpayers who filed lawsuits and, despite receiving a favorable injunction or ruling, were unable to take advantage of the credit be able to repay the undue amount? Will those who failed to pay and had infraction notices issued have their debts canceled?

Therefore, it is crucial that taxpayers in this situation immediately identify their preferred strategy, as it cannot be ruled out that a taxpayer who filed a lawsuit and regularly paid the tax may be at a disadvantage compared to one who failed to pay and may have their debt “forgiven.” The State of São Paulo did something similar in cases of ICMS tax wars, unfortunately favoring the poor payer.