Brazil's Superior Court of Justice rules, under repetitive-appeal procedure, that the CPRB counts toward the PIS and Cofins tax base
The First Panel (Primeira Seção) of Brazil's Superior Court of Justice set, in Tema 1276, the precedent that the Social Security Contribution on Gross Revenue (CPRB), which replaces the employer's payroll contribution in sectors under the payroll-tax relief regime, cannot be excluded from the PIS and Cofins tax base.
The ruling: the First Panel of the STJ decided, under the repetitive-appeal procedure, Tema 1276 (REsp 2.123.906-SP and related appeals), with Justice Marco Aurélio Bellizze as rapporteur, setting the precedent that the Social Security Contribution on Gross Revenue, created by Law 12,546/2011 as a substitute for the 20% employer payroll contribution in sectors under the payroll-tax relief regime, counts toward the PIS and Cofins tax base. The decision was published in the STJ's Case Law Bulletin (Informativo de Jurisprudência) No. 901, released on September 15.
The precedent closes, against the taxpayer, a relevant debate for companies in sectors that opted for payroll-tax relief: since the CPRB replaces the employer's social security payroll contribution, some companies argued it should follow the same exclusion logic applied to the ICMS state tax in the PIS/Cofins base, set by Brazil's Supreme Court (STF) in Tema 69. The STJ did not accept that analogy: for the court, the CPRB has the nature of revenue/gross receipts for that specific purpose, and it stays in the contributions' tax base.
In practice, the effect is a higher combined tax burden for companies in payroll-tax-relief sectors that were pursuing, or planning to pursue, this exclusion, something to factor into the review of ongoing tax theses and into payroll-cost planning for anyone subject to the CPRB.
We track, together with companies in payroll-tax-relief sectors, the impact of rulings like this one on the combined cost of payroll, including the interaction between the CPRB, PIS and Cofins. Check out Nexus's free diagnostics.
Has your company already reassessed, in light of this ruling, the real cost of payroll-tax relief compared with the traditional employer contribution?