On the 4th of November, the Federal Supreme Court (STF) started a review of the taxation model on software licensing. Six of the nine ministers formed a majority with regards to the ISS levy, both for the so-called off-the-shelf software, sold in the retail market, and for custom-made software.
If maintained, the new understanding modifies the jurisprudence, established in 1998, which defined cases of ICMS for operations involving off-the-shelf software and ISS for the order-based modality.
Maikon Luiz, general manager of Dummond Advisors, commented on the judgment “If the STF’s understanding of non-taxation of ICMS is confirmed in the case of non-customizable software licensing, we will have a stable legal environment for companies that license this type of software, since, today, many of them still have doubts on the topic. In addition, the problem is that states and municipalities are fighting a tax battle. Often, both want to tax both the ICMS and the ISS on the same type of activity. Which is not unconstitutional, since they have different tax natures in these two taxes.”
The ICMS is a state tax and levied on goods, while the ISS is collected by the municipalities and is levied on services. This new understanding tends to be more advantageous for technology companies, since the ISS rate may be lower than that of ICMS.
The final judgement on this topic would have taken place on Wednesday, the 11th of November, but has been postponed again.
Read more about this: https://valor.globo.com/legislacao/noticia/2020/11/11/stf-adia-concluso-de-julgamento-sobre-a-tributao-do-software.ghtml
Share
Let's talk?
Related news
New Fast-Track Request Processing for Letter Rulings regarding Corporate Reorganizations and Tax-Free Spin-Offs
The new Revenue Procedure 2022-10, released by the IRS on January 14, 2022, has established an 18-month pilot program that allows for fast-track processing of certain requests for private letter rulings. The program is expected to expire on July 14,
Tax Compliance in Brazil: Electronic Declaratory Registry (RDE)
The submission of the Electronic Declaratory Registry (RDE) in the Direct Foreign Investment (IED) module is among the first requirements of the year. Check out additional information below. What is it? The Electronic Declaratory Registry (RDE) in the Direct Foreign
IN provides for Income Paid and Withholding Income Tax Statement
The Normative Instruction (IN) of the Federal Revenue No. 2060/2021, which will come into force on January 1, 2022, comprises the Income Paid and Withholding Income Tax Statement. Regarding the Income Statement, the IN informs that “the individual or legal
Taxpayers are released from paying tax on the Selic rate
Lower court judges have accepted requests for the review of statements and are releasing taxpayers from paying taxes on the Selic rate. The restatement by the Selic rate involves R$ 65 billion. According to an article published by Valor Econômico,
RFB publishes Answer to Advance Tax Ruling Request, maintaining the segregation of the taxation of software as goods or services
It was published by the Taxation Division (“DISIT”) of the Federal Revenue Service (“RFB”) to DISIT Answer to Advance Tax Ruling Request (“SC DISIT”) no. 4.028, in answer to challenge by taxpayer that operates in the cars resale management software
Federal Revenue Service determines that marketplace should only pay taxes on commissions paid by shop owner
The Federal Revenue Service issued a positive guidance for companies that intermediate online product sales through marketplace platforms as it analyzed a company’s inquiry regarding the inclusion, in its gross revenue, of amounts received from buyers but which are passed
Federal Revenue Service issues understanding on the non-taxation of allocation of expenses
The taxation of lack thereof of expenses and costs shared by companies of the same corporate group has been long discussed in Brazil. The latest Federal Revenue Service statements on the issue occurred (i) in 2012, through the issuance of
Taxa Selic sofre mais um aumento e atinge 6,25% ao ano
O Comitê de Política Monetária (Copom) anunciou o aumento da taxa Selic em 1%, saltando de 5,25% para 6,25% pontos, o maior nível desde julho de 2019. É a quinta vez que a taxa sofre aumento no ano de 2021.
Taxa Selic sofre novo aumento, dessa vez de 4,25% para 5,25% ao ano
O Comitê de Política Monetária (Copom) anunciou o aumento da taxa Selic em 1%, tendo um salto de 4,25 para 5,25 pontos percentuais. Após o Copom, o mercado financeiro está projetando que a taxa possa chegar até 7,50% em dezembro
Federal Revenue Service publishes new Income Tax position on positive exchange variation on deposits in accounts abroad
Starting on the 1st of July 2021, all fiscal auditors for Brazil’s Federal Revenue (“RFB”) began to follow the new position set out in COSIT Consultation Solution No. 115/2021 (“SC”) regarding the exemption from Income Tax (“IR”) on gains arising
Updates of the Week – Tax Reform in Brazil: Quota-eaters and Closed Funds
Bruno Drummond comments on the impact of annual quota-eaters Check out the complete audio of the interview on our Podcast (in Portuguese): On the second episode of the “Updates of the Week” series, Bruno Drummond, partner and founder of Drummond
Text on profit taxation will be analysed by CARF
The Administrative Council of Tax Resources (Carf) will receive 45 texts for analysis in August. Among these, two summary proposals stand out, the first being on the taxation of profits in Brazil, despite the existence of an international treaty that