A decision was handed down by the 1st Panel of the Brazilian Federal Revenue Judgment Office (DRJ) in Juiz de Fora, which considered expenses with advertising and propaganda to be essential and relevant to the retail trade, equating them to inputs, annulling part of the tax assessment notice regarding the taking of PIS and COFINS credits.
The decision was based on the judgment of the repetitive REsp 1.221.170 by the Superior Court of Justice (STJ), which held that everything that is essential to the development of economic activity must be considered input and, therefore, able to generate credit, and that the essentiality and relevance of the input for the company must be taken into consideration.
It is important to note that the mentioned understanding of the body on the subject is firmed in the Normative Opinion of the General Coordination of Taxation (Cosit) No. 5 of 2018, which provides that a legal entity may appropriate credits related to advertising and publicity expenses only in the event that these expenses are considered essential and relevant.