STF's and STJ's Tax Agenda for the 2nd Half of 2024

With the mid-year recess ending, Brazil’s Superior Courts are preparing to review certain notable tax thesis in the second half of 2024.

Among the tax cases before the Federal Supreme Court (STF), the following stand out:

• Topic 118: This is a tax thesis derived from the “Thesis of the Century” that challenges the inclusion of the ISS in the PIS and COFINS calculation basis. Extraordinary Appeal No. 592616 has been included in the plenary trial docket of August 28, 2024 after the cancellation of the request by Justice Luiz Fux in May of this year. The request had been included in the trial session of August 2021, when Reporting Justice Celso de Mello proposed a thesis favorable to the taxpayers, and Justice Dias Toffoli presented a dissenting vote. Justice de Mello’s position is based on the understanding that the ICMS collection technique is different from that of ISS, which is not subject to non-cumulative principle, so the price of the service includes the amount corresponding to municipal tax, and the service provider earns its own revenue, which becomes part of its permanent assets. In the most recent decision, the justices voted 4­–4.
• Theme 1280: This is a thesis about the collection of PIS and COFINS on the revenues of closed supplementary pension entities. Extraordinary Appeal No. 722528 has been included in the virtual plenary session from August 9, 2024, to August 16, 2024.
• Themes 630 and 684: The virtual plenary session from August 9, 2024, to August 16, 2024, will analyze the temporal aspect covered by the thesis regarding the constitutionality of the levy of PIS and COFINS over revenue from movable or immovable assets, when constituting the taxpayer's business activity, considering that the economic result of this operation coincides with the concept of revenue or gross revenue, taken as the sum of revenue arising from the exercise of business activities. Taxpayers have requested that the decisions have "forward" effects so that contributions will only be levied on these revenues once the thesis has been established by the STF.
• Theme 816: Extraordinary Appeal No. 882461 is related to the levy of ISS on toll manufacturing operations and the limitation of the late payment penalty to 20%, and it is also scheduled to be analyzed in the STF’s August 28, 2024 session. Before the request for review by Justice Alexandre de Moraes, in the virtual plenary, the vote was 6–0, in favor of the taxpayer.

The Superior Court of Justice’s (“STJ”) published August 2024 trial docket includes the following cases:

• Theme 1191: Related to the refund or compensation of amounts overpaid from ICMS-ST depending on proof that the charge was not passed on to third parties, Special Appeal No. 2035550 will be addressed in the STJ’s 1st Session, on the trial docket for August 14, 2024.
• AR 6134, 6138, and 6141: The Federal Government filed these suits in an attempt to reverse an STJ decision that recognized the non-levy of IPI on the resale of imported goods . The Federal Government is arguing that the levy is due considering the STJ’s subsequent establishment of Theme 906. The lawsuits will be addressed in the STJ’s 1st Session, on the trial docket for August 14, 2024.
• Theme 1245: This is an analysis of the validity of Actions for Reversal of Judgment filed by the Federal Government against decisions in disagreement with the rules for the effects established in the "Thesis of the Century." Special Appeals No. 2054759 and 2066696 will be addressed in the STJ’s 1st Session, on the trial docket for August 14, 2024.

For more information regarding the topics in this Legal Update, please contact our Tax team at: TaxpartnersTC@mayerbrown.com.