Seven ministers of the Federal Supreme Court (STF) voted for the possibility of appropriating PIS and Cofins credits on the acquisition of scrap \u2013 waste, residues or trimmings. The practice is prohibited by article 47 of Law No. 11,196 of 2005. The ministers also stated, however, that they are against the exemption of the sector.<\/p>\n\n\n\n
The issue was judged in a lawsuit involving Sulina Embalagens and Trombini Industrial, industries in the paper sector. They use recycled materials (paper scraps) as the main input in the production process. In the lawsuit, they highlight that the State gives recycled products a more burdensome tax treatment than products extracted from nature, which employ less labor and harm the environment (RE 607109).<\/p>\n\n\n\n
The Treasury claims that Article 48 of the same law provides for the suspension of the incidence of contributions in the case of the sale of scrap to a company that calculates income tax based on real profit. Therefore, it would not be possible to generate credit when the previous transaction is not subject to the payment of contributions. According to the Union, the use of credits in the non-cumulative system is defined by the incidence of contributions in previous transactions.<\/p>\n\n\n\n
The trial divided the ministers into four voting lines. The vote of Minister Gilmar Mendes prevailed, for whom companies that sell scrap are, in fact, harmed by the model of Law 11.196.<\/p>\n\n\n\n
\u201cToday, from a tax point of view, it is economically more advantageous to buy inputs from the extractive industry than to acquire raw materials from cooperatives of recyclable material collectors\u201d \u2013 Minister Gilmar Mendes.<\/p>\n\n\n\n
In his vote, the minister explained that sellers would pay 3.65% in PIS and Cofins and buyers would have a credit of 9.25%, which is therefore more advantageous than buying from exempt companies, which pay nothing but also do not provide credit. Therefore, he voted in favor of using the credits, but also against the exemption of those who sell scrap metal.<\/p>\n\n\n\n
Thus, for Mendes, articles 47 and 48 of Law 11.196 of 2005, which prohibit the calculation of PIS\/Cofins credits on the acquisition of recyclable materials and grant exemptions, are unconstitutional. \u201cToday, from a tax standpoint, it is economically more advantageous to buy materials from the extractive industry than to acquire raw materials from cooperatives of recyclable material collectors,\u201d he states. In addition to being contradictory, the Constitution defends the environment, according to the minister, which makes this provision unconstitutional.<\/p>\n\n\n\n
\u201cAlthough the legislator intended to benefit paper collectors, the legislation caused serious distortions that ended up discouraging the purchase of recycled materials,\u201d he said. The vote was supported by ministers Lu\u00eds Roberto Barroso, C\u00e1rmen L\u00facia, Edson Fachin, Luiz Fux, Kassio Nunes Marques and Ricardo Lewandowski, the last to vote.<\/p>\n\n\n\n
Minister Dias Toffoli considered only Article 47, which deals with the prohibition of credits, to be unconstitutional. He was therefore defeated along with the ministers who voted in favor of the validity of the provision.<\/p>\n\n\n\n
The rapporteur, Justice Rosa Weber, and Justice Marco Aur\u00e9lio Mello, considered the article valid, with the exception of companies in the Simples, which pay a lower tax rate. For Justice Alexandre de Moraes, the prohibition is also constitutional, but without the Simples exception.<\/p>\n\n\n\n