By unanimous decision, the panel ruled that the calculation for determining PIS and Cofins credits linked to revenues earned in the domestic and foreign markets using the proportional allocation method should only consider revenues earned from activities with common costs, expenses, and charges. In other words, revenues from all of the company's activities should not be considered. Therefore, the judges validated credits claimed by Alcoa World Alumina Brasil Ltda. for the period from 2009 to 2011.
The controversy arises from the different interpretations given to article 3, paragraph 8, item 2, of Law 10.833/2003. This provision deals with the proportional allocation method. Its text determines the application of the "percentage ratio existing between gross revenue subject to non-cumulative taxation and total gross revenue" to common costs, expenses, and charges. The method should be applied to calculate PIS and Cofins credits for expenses related to activities that generate revenue subject to non-cumulative taxation and revenue not covered by the regime, such as when a product is sold both domestically and internationally.
For tax purposes, the expression "total gross revenue" refers to the revenue from all activities carried out by the company. However, the taxpayer's defense, presented by lawyer Nicolas Ciancio of the law firm Mariz de Oliveira e Siqueira Campos Advogados, argued that the proportional allocation should only consider revenue from activities with common costs, expenses, and charges. The higher the gross revenue used in the formula stipulated by law, the lower the resulting percentage on which the credit will be calculated.
In this specific case, according to the company's logic, the calculation should consider revenues from sales of the chemical compound alumina to both domestic and international markets. However, it would exclude revenues from the resale of imported aluminum.
The panel sided with the taxpayer. The advisors understood that although the law is not clear, a teleological interpretation allows one to reach the conclusion defended by the company.
Source: JOTA