By majority, the court determines that no taxes will be distributed to consumer cities; The decision includes financial services
The STF (Supreme Federal Court) has determined, by majority, that the occurrence of an ISS (tax on services) in health plans and some financial services must occur where businesses are headquartered, not in the municipalities where consumers use them. . Services. The trial is taking place in a public virtual session and will conclude at 11:59 p.m. on Friday (March 31, 2023).
The decision includes managing funds, client portfolios, alliances, and credit and debit card payment methods, in addition to Leasing (rent). Understanding the rapporteur, Minister Alexandre de Moraes (here is file full Of the vote – 186 kb), and he has already accompanied 5 ministers.
in 2016, 157 Complementary Law Change of place of taxation, specifying that companies must collect ISS for the municipalities in which they use the services provided. The rate does not have a single value for the national territory, it is determined in each municipality. Parts update scale Complementary Law 116 of 2003.
Moraes issued an injunction (temporary decision) in March 2018 suspending parts of the legislation due to difficulty in enforcement (here’s full – 180 KB). The procedure maintained the collection of the ISS in the municipalities in which the companies are located.
In 2020, the then-President Jair Bolsonaro (PL) punished for Supplementary Law 175 of 2020 to add to the legislation that Moraes had halted. defines the standard createA single unified electronic system throughout the national territory“.
In the ruling, which ends Friday, Moraes considered forfeit (when there was no longer any interest for the parties) from the suit in connection with the articles of the 2003 and 2016 statutes and the unconstitutionality of the 2020 rule.
Moraes says that changing the location of the injury “They may require that the new normative regime clearly refer to the concept of ‘the borrower of the service’, under penalty of serious legal uncertainty and potential for double taxation, or even no valid tax ramifications.“.
The lawsuit was filed by Consif (National Federation of the Financial System) and CNseg (National Association of General Insurance Companies, Private Retirement and Life, Complementary Health and Capital).
On March 21, the unions in the lawsuit requested that the injunction issued by Moraes be maintained or, at the very least, that the court’s decision otherwise take effect from the date of the current trial.
The result of the ruling was 6-0, with the votes of ministers André Mendonca, Edson Fascin, Dias Toffoli, Roberto Barroso and Louise Vaux accompanying Morais.
Attorneys see fees that are not available
Attorney Gabriel Caldiron Rezende, Partner in the Indirect Taxes District of Machado Associados, considers that “There is still no condition.” To make the change so that taxes occur in the municipalities where services are provided.
“These are services offered to a large number of users, located in more than 5,500 Brazilian municipalities, each with its own ISS legislation and applicable rates. Keeping track of all this legislation and potential changes is not practical“, He says.
He also notes that, to date, no standard system of taxation has been established, although it is an interesting proposition.on a theoretical level.”
“It seems to me that, as a practical matter, it would only be viable in light of a robust electronic system, in which the municipalities, at their own risk, determine the criteria for calculating the ISS and the taxpayer only attributes the values of the services and municipalities for which they are intended. This seems far from happening.“, Announce.
Rezende shows that, on the one hand, if collecting in one municipality reduces tax complexity for corporations, for municipalities, ISS distribution may be more advantageous. However, she is aware that the manner in which recent legislation on the subject has been drafted still raises legal uncertainty.
Leonardo Freitas de Moraes y Castro, Partner Lawyer in the Tax District of VBD Advogados, is also aware that there are “various practical difficulties to changes provided for by law. “The mechanism I am posting does not appear to be applicable. The taxpayer is still at risk and subject to the dual ISS requirementsshe says.
Castro lists some advantages for companies in maintaining an ISS account at their headquarters, such as “You do not need to follow the legislation of thousands of municipalities in which service providers can be found and assume many additional obligations for these operationsBut for municipalities, they are considered “natural” What “Group advocacy according to the respective consumer markets.
“This whole scenario generates great insecurity for taxpayers, who don’t know which rule they should follow and how and when they should adjust to the new ISS rules.”says the lawyer.
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