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Justice dismisses ISS on importation of services

Companies have been able in court to rule out the collection of ISS on the importation of services - those provided abroad. Although the Complementary Law 116, of 2003, which deals with the tax, oblige the collection, judges and judges have understood that there is no constitutional provision for taxation.

Recently, GKN do Brasil, an English multinational manufacturer of automotive transmission components, has received a judgment in the Porto Alegre court to annul assessments of more than $ 7 million made by the tax authorities of Porto Alegre (RS). There are also decisions by the Superior Court of Justice (STJ) and the São Paulo Court of Justice (TJ-SP) in favor of other companies.

Municipalities' farms have fined companies that fail to pay ISS on imports of services rendered abroad on the basis of article 1, paragraph 1 of Complementary Law 116. The provision expressly states that ISS also covers the service provided by outside the country or whose provision began abroad.

Lawyer Rafael Diehl of Diehl & Cella Advogados Associados, who advises GKN do Brasil, states that, despite the provision in law, the chargeable event is the place where services are provided and this logic cannot be reversed. . Thus, according to him, as the installment occurred outside Brazilian territory, this tax could not be charged to the borrower in the country.

In the case of GKN, the service was provided in New York. "Charging ISS on importation of services would offend the principle of territoriality," says the lawyer.

In this case, the decision is made by Judge João Pedro Cavalli Júnior, from the 8th Public Finance Court of the Porto Alegre Central Forum. He understood that there is no legal provision for the Brazilian service taker to pay tax due to a chargeable event (provision of the service) practiced by a foreign third party, neither being a taxpayer nor a substitute for the tax (Case No. 001 / 1.15.0192786-9). / p>

The Attorney General's Office of Porto Alegre (PGM) informed by note to Valor that it is a recent decision of first instance and that "analyzes its terms for the competent appeal".

Tax attorney Diogo Ferraz of Freitas Leite Advogados states that the Constitution does not expressly provide for the possibility of ISS to apply to imported services, unlike ICMS, where explicit provision is made.

"The question is not peaceful. On the one hand, this situation gives rise to the interpretation that the incidence of ISS on importation would depend on express constitutional authorization. On the other hand, there is currently a worldwide trend towards taxation at the place of destination. which justifies both the incidence of ISS on imports and the exemption of ISS on exports, "says Ferraz.

Another case, judged by the TJ-SP, involves Premier Brasil Industries Support Services and the São Paulo City Hall. The 14th Class was unanimous in accepting the company's appeal and dismissing the charge.

According to the decision of the rapporteur, Judge João Alberto Pezarini, even though the ISS taxation on the importation of services is included in the Complementary Law 116 "has no constitutional provision, constituting improper extension of the ISS incidence field, in offense to the principle. territoriality of tax laws ".

According to the decision, the municipality of São Paulo established the collection of ISS on importation of services through Law No. 13.701 of 2003. However, according to the judge, "the Federal Constitution gives municipalities the power to tax the service rendered within its boundaries of its territory "(appeal no. 9221533-34.2007.8.26.0000).

The city of São Paulo appealed to the STJ, which did not judge the issue because it is constitutional matter. The Federal Supreme Court (STF), however, has ruled that the case should be brought to a new trial in the plenary of the São Paulo court, according to lawyers who advise the company in the process, Fernando Ciscato and Fabiola Paes de Almeida Ragazzo, Ronaldo Martins & Advogados. . This is because only the plenary could declare the law unconstitutional, according to article 97 of the Constitution.

According to Fabíola Ragazzo, "Complementary Law 116/03 brought an illegal and undue extension in the field of ISS incidence, being clearly unconstitutional the requirement in accordance with it, establishing the requirement on the importation of services, as well as the local municipal laws that formally instituted the levy of the tax on the said installment. " For her, the decision of the TJ-SP "constitutes a breakthrough and a mitigation of the tax burden on business".

The expectation now, according to Fabiola, is that the plenary will accept this understanding and declare the unconstitutionality of Complementary Law 116, as it deals with the incidence of ISS on the importation of services.

The City of São Paulo informed, by means of a note, that "it will not comment on the subject, which is not yet pacified in the judiciary".

The decision in the STJ, which has been used as a precedent, is from 1992. At the trial, the 1st Panel understood that the ISS law of the municipality of São Paulo, at the time, could not reach foreign events. The case involved a publisher (REsp 26.827-1 / SP)