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New CARF precedents – Agribusiness and PIS/COFINS

The Administrative Council for Tax Appeals (“CARF”) has approved new precedents that must be observed by its members and by the Federal Revenue Service Judgment Offices (“DRJs”). Among them, two proposals approved by the 3rd Panel of the Superior Chamber for Tax Appeals are relevant to the agribusiness sector, especially in relation to the PIS/COFINS credits for taxpayers subject to the non-cumulative contribution regime.

The first is a result of the judgment of REsp 1.221.170 by the Superior Court of Justice (“STJ”) and the Normative Ruling Cosit 05/2018, which settled the issue related to the concept of inputs. The precedent deals with the possibility of PIS/COFINS tax credits on the so-called “inputs of inputs”, that is, the costs of manufacturing products that will be used as inputs in the production of new products, such as in relation to expenses incurred in the production of sugarcane, which, in turn, is used as an input in the production of sugar and alcohol. In this sense, CARF recognized that such expenses can generate PIS/COFINS tax credits, thus expanding the limits of the concept of input to also include the agricultural phase, prior to industrialization.

In addition, CARF also recognized the possibility of PIS/COFINS tax credits on expenses with freight services in the acquisition of exempt inputs (very present in the agribusiness sector), provided that such services have been effectively taxed by PIS/COFINS and have been registered independently in relation to the inputs acquired.

In this context, if applicable, we recommend the analysis of the precedents and eventual recover of PIS/COFINS tax credits.

We remain available to discuss.

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