This month, the Brazilian Federal Supreme Court (STF) understood that the Tax on Circulation of Goods and Services (ICMS) is not make on the basis of calculation of the Contribution for the Financing of Social Security, COFINS. The millionaire discussion was defined by seven votes in favor and two against. In any case, the ministers of the STF address the issue to be discussed in the future.

Despite being an important step for the taxpayer, the decision this month is only validfor the author of the process, a distributor of automotive parts. The last say should begiven by the ministers after the analysis of a complaint from another company, which will be analyzed and subsequently sentenced.

The issue has an important economic impact. The latest estimates from the Tax Office(“Receita Federal”) indicate the impact of 250,000 million reais to public administration ifthe decision goes forward affecting other tax payers. This process began in 1999.