The 1st Ordinary Panel of the Administrative Tax Appeals Council (CARF) understands that the expenses arising from environmental obligations imposed by the government must be considered inputs, for the purpose of crediting the PIS and Cofins taxes.
In the mentioned judgment, the rapporteur, Councilor Liziane Angelitti Meira, recognized that the taxpayer would be entitled to the crediting of the PIS and Cofins in relation to the expenses incurred with the environmental recovery, due to the essentiality of such services (earthmoving for environmental recovery, environmental audits, among others) for the company’s productive process and by virtue of the imposition of such obligations by the public authorities, resulting from the Judicial Conduct Agreement and the Terms of Adjustment of Conduct entered into with the MPF, MP-/SC, and FATMA.
Although it does not make any reference to this, the appellate decision is in line with the understanding presented by the Superior Court of Justice in the analysis of Special Appeal No. 1.221.170/PR, judged under the system of repetitive appeals, through which the Superior Court presented an understanding for the illegality of the crediting discipline provided for in RFB Normative Instructions 247/2002 and 404/2004, as well as in the sense that the concept of input material, under the non-cumulative system of the PIS and COFINS, must be ascertained based on the criteria of essentiality or relevance of the goods or services.
As can be inferred from the decision rendered, the expenses with environmental obligations would present the relevance criterion, due to the legal imposition, as well as the essentiality criterion, since without complying with the strict environmental control, the company would be unable to carry out its production process.
This decision consists of an important precedent for taxpayers that have expenses with environmental requirements and, consequently, should have the recognition of the right to credit PIS and COFINS.