STF Supreme Court Acknowledgement of general repercussion. ICMS Value-Added Tax Levied on the basic monthly subscription fee

Transcription

1 Dear Readers: The purpose of this Tax Bulletin has as its objective to keep our clients and other interested parties duly up-to-date on the main subjects being discussed and decided by the Judiciary, Legislative, and Executive. In this th issue, we are showing 24 different questions, in Jurisprudence, Legislation and Answer to Consultations. To access each of the texts individually, click: Jurisprudence STF Supreme Court Acknowledgement of general repercussion ITCMD Legislative Incumbency of States for establish general rules for charging of ITCMD (Tax for Transmission in case of Death and Donation) on assets located abroad ICMS Value-Added Tax Levied on the basic monthly subscription fee STF Supreme Court ICMS charged on electric power Unconstitutionality of Decrees that change the way through which the tax is paid STF Supreme Court Lifting of tax and banking secrecy need for proper substantiation and indication of actual fact STF Supreme Court Habeas Data possibility of use for obtaining information relating to payment of taxes recorded in the computerized support system to the Treasury Administration Department STJ ISSQN (Comprehensive Service Tax) Application on the pharmaceutical compounding service TRF1 Federal Court of Appeals of the 1st Region Tax Collection Action Statute of limitations for lifting the corporate veil and reaching the managing-partners Legislation and Query Solutions Act No /2015 Changes to the PIS-Import and COFINS-Import regulations Decree No /2015 Regulation of Tax Aspects of Holding of Olympics and Special Olympics of 2016 Normative Instruction RFB Internal Revenue Service No /2015 Efficacy of Consultation Connected Services Resolution of Directive Committee of e-social No. 1/2015 Terms for Transmitting Information Query Solution COSIT No. 47/2015 IRRF (Withholding Tax)

2 Query Solution COSIT No. 117/2015 CPRB Social Security Contribution on Gross Income not to be Levied on Revenues from Exportation of Services Query Solution COSIT No. 122/2015 Levied Social Security Contributions Maternity-Paid-Leave and Vacation added to the Supplementary One Third Pay required by the Constitution Query Solution COSIT No. 128/2015 IRPF Corporate Income Tax Capital Gain from Sale of Assets Abroad General Damages Query Solution COSIT No. 129/2015 Overseas Travel Expenses Corporate Service Purchaser - Mandatory Registration in SISCOSERV (Integrated Foreign Trade System for Services, Intangibles and Miscellaneous Transactions Yielding Asset Variations) Query Solution COSIT No. 138/2015 Social Contributions Agriculture Industry Query Solution COSIT No. 141/2015 IRPF Individual Taxpayers Income Tax - Donation Pledge Capital Gain Query Solution COSIT No. 45/2015 IRRF Withheld Income Tax Simple National Taxation System Prohibited Activities Query Solution COSIT No. 146/2015 IRPJ Corporate Income Tax - Deductibility of Royalties Query Solution COSIT No. 153/2015 IRRF (Withholding Tax) Overseas Remittances Query Solution COSIT No. 159/2015 IRPJ/CSLL (Corporate Income Tax/Social Contribution on Net Earnings) Net Worth Calculation Interpretative Declaratory Act RFB (Internal Revenue Service) No. 5/2015 Social Contribution of Individual Taxpayers Executive Declaratory Act COSIT No. 20/2015 Souza, Schneider, Pugliese e Sztokfisz Advogados law firm is available to its clients should they have any questions on the decisions commented on in this newsletter. Enjoy your reading.

3 Jurisprudence Supreme Court STF Acknowledged General Repercussion ITCMD Legislative Incumbency of the States for setting forth general rules for collection of ITCMD (Tax for Transmission in case of Death and Donation) on assets located abroad On 06/26/2015, the Supreme Court (STF) has acknowledged the existence of General Repercussion in discussion regarding the possibility of the States to use their Legislative Incumbency, with grounds on art. 24, 3, of the Constitution and on art. 34, 3, of the ADCT, in light of the omission of the Constitution in setting forth the general rules relating to the powers for implementing the Tax on Transmission in case of Death or Donation of any Assets or Rights ITCMD, in the events provided for in art. 155, 1, III, a and b, of the Federal Constitution. Said constitutional matter will be debated in Appeal to the Supreme Court (RE) No /SP, where Justice Ministro Dias Toffoli shall serve as Reporting Justice of the case. ICMS Value-Added Tax Levied on basic monthly subscription fee On 06/26/2015, The Supreme Court (STF) has recognized the existence of General Repercussion Interest on the discussion regarding whether or not ICMS should or not be levied on the monthly basic subscription rates, in light of the concept and reach of the expression communication services, provided by art. 155, II, of the Federal Constitution of The constitutional matter will be analyzed in Appeal to the Supreme Court (ARE) No /RS, where Justice Teori Zavascki shall serve as reporting member of the Panel. STF Value-Added Tax on electric power Unconstitutionality of Decrees that change the form through which the tax is paid On 06/18/2015, The Plenum of the Supreme Court (STF), in trial of Constitutional Appeal RE / RJ, has declared the unconstitutionality of Decrees No /2002 and /2004, both of the State of Rio de Janeiro, which change the systematics through which is calculated and paid the Value-Added Tax (ICMS) levied on electricity, implementing tax payment based on estimates. The reporting Justice, Marco Aurélio, unanimously followed by the other members of the Court granted the taxpayer s appeal under the argument that establishing the systematics for payment of the tax is an act that cannot be implemented by Decree, but which requires a formal law, in compliance with the principle of tax legality, provided by art. 150, I, of the Federal Constitution. In light of the lack of a leading case on the matter, Justice Marco Aurélio voted for acknowledging the General Repercussion Interest, so as this decision is applied in similar cases that also dispute the system of payment by estimate, setting forth the understanding that only law, in the formal meaning of the word, can establish the payment system of ICMS by estimate. STF (Supreme Court) Lifting of tax and banking secrecy exigent circumstances requiring proper substantiation and indication of the actual facts On 06/23/2015, Justice Celso de Mello of the Supreme Court (STF), when rendering bench ruling in MS /DF, granted injunctive suspension, due to lack of proper substantiation and indication of the actual 03

4 fact, in an order for lifting of tax, banking and phone records secrecy by the Senate Investigative Hearing (CPI) called Prosthetics, implemented by the Federal Senate. According to the Justice s vote, the appeal is plausible due to the deliberation of the Senate Hearing lacking proper substantiation, provide it exclusively based in news reported on the press, which does not justify, objectively, the lifting of secrecy of the records. On this note, he stated that the mere reference to news reports and the search for information by lifting the secrecy of banking, tax and phone records without the corresponding and indispensable indication of the actual and specific fact that shows probable cause do not suffice to justify the measure. Said understanding, in addition to signaling the precedent-based understanding of the Supreme Court regarding cases in connection to the secrecy of information, banking and phone records, suppresses the arguments that court rulings, in these specific cases of lifting of secrecy rights in Senate Hearings neither are nor related to the act of undue interference in the acting of the Federal Senate. STF Habeas Data possibility of use for obtaining information relating to payment of taxes recorded in the computerized support system of the Tax Administration On 06/17/2015, The Full Panel of the Supreme Court (STF), when trying Constitutional Appeal RE / MG, unanimously recognized the taxpayers right of, through an Habeas Data, have access to information relating to payment of taxes recorded in support systems for tax-collection used by the Federal and State Tax Administrations. The case discussed specifically the access to data recorded in SINCOR Corporate Entity Checking Account System, of the Internal Revenue Service, and Justice Luiz Fux, reporting member of the panel, pointed out that the tax secrecy cannot prevail when the taxpayer requests information concerning its own taxes paid. This stance by the Supreme Court proves to be extremely relevant to taxpayers, provided at, as highlighted by Justice Fux himself, the acknowledgement of this right of access to information will help the economic planning and better decision on the companies financial investments. STJ ISSQN (Comprehensive Service Tax) Application on the pharmaceutical compounding service On 02/24/2015, the Second Panel of the Superior Court of Justice (STJ), in the records of the AgRg (Regulatory Appeal) in the REsp (Special Appeal) No /GO, has ruled that the supply of compounded medications is subject to ISSQN, not to ICMS (Value-Added Tax). The Rapporteur, Justice Humberto Martins, unanimously followed by the other members of the court, dismissed the regulatory appeal filed by the taxpayer, under the argument that pharmaceutical services are listed in item 4.7 of the list appended to LC 116/03, which lists the services subject to the ISSQN (Comprehensive Service Tax). Thus, since the supply of compounded medications constitutes a mixed operation, which necessarily and substantially aggregates the provision of a typical pharmaceutical service, the Panel decided that, as of the 04

5 enactment of the aforementioned Complementary Act, such operation is undoubtedly not subject to ICMS, but rather to ISSQN. Such ruling also reflects the understanding of the First Panel of the Superior Court, which, in 2008, under the REsp (Special Appeal) 881,035/RS, reported by Justi ce of Teori Albino Zavacki, had already ruled for the applicability of ISSQN to medication compounding services. However, the Supreme Federal Court (STF) shall address the issue of application of ISS and ICMS when judging the Special Appeal (RE) 882,461/MG, selected as a representative of controversy, since it will define the taxation applicable to custom manufacturing operations. This case, although not directly related to compounding of medicines, may impact the the decisions currently issued by the Superior Court of Justice in REsp No. 881,035/RS and AgRg in REsp No /GO. TRF1 Tax Collection Statute of limitation for lifting the corporate veil and reaching the assets of managing partners On 05/29/2015, the Eighth Panel of the Federal Court of Appeals of the 1st Region (TRF 1), in trying Interlocutory Appeal No , unanimously decided to suppress the theory actio nata and prevent the redirecting of the Tax Collection to the assets of the partners, after elapsed more than 5 (five) years between the valid service of process of the corporate entity and the request for redirecting of the proceeding, due to the statute of limitations. The theory, actio nata, defended by the Federal Treasury Department, determines that the counting of the statute of limitations for redirecting the proceeding starts upon the occurrence of the illegal act, provided by art. 135 of the National Tax Code irregular dissolution of the company or managing-partner acting outside his limitations of power provided that, only after these events arises the Treasury Department s claim to including the co-responsible person as defendant in the tax collection proceeding, regardless of the time passed, so long as the company has been regularly served. However, the reporting Federal Judge in this case, Marcos Augusto de Sousa, has found in favor of the taxpayer, in the sense that said theory exceeds the legal provisions afforded by the Tax Law and allows, unduly, the ad eternum perpetuation of the tax debt. Therefore, based on precedent of EDcl in AgRg no Ag No /SP, rendered by the Superior Court of Justice (STJ), he stated that the application of the theory actio nata does not change the starting milestone for the statute of limitations concerning the request for redirecting the proceeding, which must be filed within 5 (five) years following service of process, even if the Creditor s inaction is not characterized. Concerning this understanding of TRF 1, the beginning of time for counting the statute of limitations for the redirecting of the proceeding of Tax Collection is still a controversial matter in the Courts, whereby the Superior Court of Justice has determined as Binding Precedent REsp No /SP for facing and defining the matter. 05

6 Legislation and Answer to Consultations Act No /2015 Changes to the PIS-Import and COFINS-Import regulations On 06/22/2015, Act No. 13,137/15 was enacted as a result of the conversion of the Provisional Measure No. 668/15. The many changes brought about by this Act to tax regulations include the following ones: (I) increase of the PIS-Import and COFINS-Import rates, for the import of foreign goods, to 2.1% and 9.65%, respectively; (ii) increase of the PIS-Import and COFINS-Import rates on the payment, credit, delivery, use or remittance of funds to persons residing or domiciled abroad in consideration for services rendered, to 1.65% and 7.6%, respectively; (iii) the PIS-Import and COFINS-Import credits will be calculated happen by adding the IPI (Tax on Manufactured Goods) amount applied to the import to the calculation basis of such contributions; (iv) explicit provision that the 1-percent extra for COFINS-Import does not entitle the taxpayer to credit for the non-cumulative nature of the tax, limited to the amount for the base rate, without the extra; and (v) cancellation of the ex officio fine levied on the amount of the credit not validated in an administrative application for refund, revoking paragraphs 15 and 16 of Art. 74 of Act No. 9,430 / 96, which imposed such fine. Decree No /2015 Regulation of the Tax Aspects for Holding the Olympics and Special Olympics of 2016 On 06/08/2015, was published Decree No /2015, which regulates the tax measures referring to the holding the Olympics and Special Olympics of 2016 in Brazil. The rule provides for the granting of federal tax exemptions to entities and persons involved in the holding of the Olympics, among which the organizing committees, companies associated therewith, international sports agencies, media entities, athletes and federations. Was also granted an exemption from payment of nine federal taxes on the importation of goods, products and services by occasion of the competition. Similarly, the Decree provides implements the suspension of taxes levied on the importation of durable goods and equipment entering the country under the Special Customs Regime of Temporary Admission. Finally, the text provides that the Internal Revenue Service will regulate the accessory obligations applicable to the enjoyment of the exemptions created. Normative Instruction RFB (Internal Revenue Service) No /2015 Consultation Efficacy Connected Services On 06/08/2015, was published IN RFB No , which amends IN RFB No /13, which provides for the consultation procedure relating to the interpretation of tax and customs law, for authorizing consultations to be made regarding more than one service, intangible issue or operation, so long as the matters are connected. Until enacting of a new Normative Instruction, consultations made for clarifying doubts about the classification of services, intangible matters and other operations resulting in variations to assets were only considered effective in referring to one single service, intangible issue or operation. 06

7 Resolution by Directive Committee of e-social No. 1/2015 Terms for Transmitting Information On 06/25/2015, was published the Resolution by the Directive Committee of e-social No. 1 ( Resolution No. 1/15 ), whereupon established the periods for mandatory use of the Electronic Bookkeeping System of Tax, Social Security and Labor Obligations ( e-social ). According to the aforementioned rule, the provision of information through e-social, which will consolidate the accessory labor obligations will be compulsory after September 2016 for employers with income above R$ 78,000, (Seventy-Eight million Reais) for the year of 2014 and for year starting January 2017, for the other taxpayers, except for information referring to work environment, occupational accident report, worker health monitoring and workplace environmental conditions, which shall be informed as of January 2017 by employers with income above R$ 78,000, (Seventy-Eight million Reais) in the year of 2014 and after July 2017 by the other taxpayers. Still regarding information provided after the limited period, with errors or omissions, the taxpayer will be subject to the penalties provided by law. Finally, Resolution No. 1/15 has established that the differentiated, simplified and favored treatment afforded to Micro-Entities ( ME ), to Small-sized companies ( EPP ), and to Individual Micro-Entrepreneur ( MEI ), to domestic employees, to special insured and to small rural producers (individuals) will be determined in specific acts, in compliance with the aforementioned time constraints. Query Solution COSIT No. 47/2015 IRRF On 05/29/2015, was published Query Solution No. 47, by COSIT, where was established the understanding that remittance to individuals or corporate entities abroad, by foundations kept by the public administration located in Brazil, which enjoy tax immunity, are subject to payment of Withheld Income Tax. According to COSIT, with grounds on Law No /1964, which substantiates article 167 of RIR/99, the reciprocal tax immunity provided for by the Federal Constitution, does not exempt such foundations of the obligation to withhold and paying taxes on income paid or credited abroad, provided that, in addition to express legal provision determining the withholding, the burden of taxation in incumbent on income of nonresidents as well. Query Solution COSIT No. 117/2015 CPRB Not levied on Revenues Resulting from the Export of Services On 05/12/2015, was provided by COSIT Query Solution No. 117/2015, where established that is not to be levied Social Contribution on Gross Income ( CPRB ) on revenues resulting from services provided by residents abroad when the result is veried to be there, for being considered services export income, benefited by the immunity provided for in Section I, Paragraph 2, of Article 149 of the Constitution. Regarding the clarity of the constitutional rule on immunity, it is observed that the definition of service export, on its turn, is not so clear. For clarifying the matter, COSIT based its response on legislations of PIS, COFINS and ISS, as well as in rules concerning the National Federal Simple Taxation System, which prevent taxes are levied on revenues from exportation, concluding that services performed in Brazil, and which created results here, will not fit as services exports, even if the payment for such services is made by a resident in the country. The sole exception made by COSIT concerns the need for the hiring to have been executed directly between the service provider (residing abroad), and not admitting immunity in the event of outsourcing, which cancels the characterization of direct exportation. 07

8 COSIT pointed out yet, despite of the exclusion of export revenues from the calculation basis of CPRB, the service provider shall record them with SISCOSERV, except if the entity is not required to register. Query Solution COSIT No. 122/2015 Applicability Social Contributions Maternity Paid-leave and Vacation added of 1/3 required by the Constitution On 06/05/2015, was published Query Solution COSIT No. 122, where established the understanding that are subject to being levied social contributions on payroll: (i) maternity-paid leave and vacation, added of the 1/3 required by the Constitution, and which are subject to being levied social security contributions on payroll; and (ii) amounts paid by the employer as paternity-leave. Social security contributions are applicable on the Paid-Maternity-Leave and vacation, added of the 1/3 required by the Constitution, which had already been the subject of Answer to Consultation COSIT No. 188/2014. Regarding the amounts paid by the employer for Paid-Paternity-Leave, COSIT understood the contributions will be levied, pursuant to the interpretation of Section III of Article 473 of the Consolidation of Labor Laws - CLT, these amounts bear the nature of salary. Query Solution COSIT No. 128/2015 IRPF Capital Gain resulting from Disposal of Assets Abroad General Damages On 06/09/2015, was published Query Solution No. 128 by COSIT, which provides for Individual Taxpayers Income Tax levied on amounts paid by foreign corporate entities to individuals residing in Brazil for acquisition of patent rights and as compensation for general damages. In the case subject to interpretation by the Tax Authority, the applicant, foreign person residing in Brazil, received two payments from his former employer, a corporate entity organized in France: of for acquisition of registration rights of inventions held by him; and another as compensation for general damages for failing to display his name in the list of inventors in reference to a patent. The Tax Authority solves the consult by pointing out that the capital gain arising of the assignment, abroad, of a right also originated abroad, linked to an invention for which a patent will be applied, is generically encompassed by the event of applicability of Individual Taxpayers Income Tax. However, provide that, in this specific case the right was acquired by while the persons was a non-resident in Brazil, the tax shall not be levied pursuant to the rule provided in Article 24, Paragraph 6, Section 1 of Provisional Measure No /2001. Finally, the Tax Authority understood that the income resulting from the compensation for general damages, even if paid by a source established abroad, is not taxed by Individual Taxpayers Income Tax. Query Solution COSIT No. 129/2015 Overseas Travel Expenses Corporate Service Purchaser - Mandatory registration in SISCOSERV On 07/06/2015, the Query Solution No. 129 was issued by the General Coordination of Taxation System ( COSIT ), establishing the understanding that the overseas travel expenses for managers and technicians, incurred by a legal entity, should be entered in SISCOSERV (Integrated Foreign Trade System for Services, Intangibles and Miscellaneous Transactions Yielding Asset Variations) whenever such expenses are related to the services it has purchased or billed to its name, from persons residing or domiciled abroad. On the 08

9 other hand, personal expenses directly contracted by its representatives, such as meals, lodging and transportation, should not be entered, since these are deemed individual-related transactions. Query Solution COSIT No. 138/2015 Social Security Contributions Agriculture Industry On 06/09/2015, was published Query Solution No. 138, by COSIT, which provides for the subjecting of the Agriculture Industry to the Social Contribution on Gross Income ( CPRB ) set forth in Article 8 of Law No /11. Initially, COSIT clarifies that, as of the inclusion of Article 22-A of Law No /91, the Agriculture Industry, defined as the individual rural producer whose economic activity is the manufacturing of its own produce and of that acquired from third parties, the contribution of employer s social security tax and the benefits granted due to the level of incidence of labor incapacity arising of the risks of environmental risks ( RAT ), on the total compensation pair or credited to employers insured (article 22, sections I and II, of Law No /91), were replaced upon enacting of Law No /2011, by the contribution levied on the amount of gross income resulting from the trading activities. According to the understanding stated, for being subject to CPRB, the corporate entity, as a requirement, has to manufacture the products referred to in Appendix I of Law No /11 and to be effectively a taxpayer of the contributions provided under Article 22, Sections I and II of Law No /91, which is not the case of the Agriculture Industries, as they are already in a differentiated taxation system. COSIT provided, furthermore that, as provided for in articles 173 and 174, header, of Normative Instruction RFB No. 971/09, the condition of Agricultural Industry is not mischaracterized if the company carried out other activities. Query Solution COSIT No. 141/2015 IRPF Pledge of Donation Capital Gain On 06/12/2015, was published Query Solution No. 141, by COSIT, and the theme is tax exemption on capital gain acquired by the disposal of real estate subject of pledge of donation linked to the dissolution of marriage. The applicant annually states, in its DIRPF, to own two properties, and one of them is pending transmission since his divorce, when the spouses agreed upon the future transmission thereof to one of the children of the couple. Therefore, is questioned, pursuant to the content of Article 23 Law No , the other property owned can be considered his only real estate, therefore exempt from Individual Taxpayers Income Tax on the capital gain resulting from the disposal of the only real estate. The Tax Authority has understood that the real estate subject matter of the assignment pledge is still in property of the parents, as the children have not accepted the donation. Therefore, COSIT understood that, from the determination of literal interpretation of the exemptions provided for in Article 111 of the National Tax Code, the parents were the owners of the two properties, which would suppress the exemption of Individual Taxpayers Income Tax, provided for in Article of Law No

10 Query Solution COSIT No. 145/2015 IRRF Withheld Income Tax National Simplified Taxation System Prohibited Activities On 06/12/2015, was published Query Solution No. 145, by the General Taxation Coordination of the Internal Revenue Service ( COSIT ), which provides for the compulsory character of withholding of Withheld Income Tax ( IRRF ) in the case of engaging companies enrolled with the Special Unified Collection System for Taxes and Contributions payable by Micro and Small-Sized Companies ( Simples Nacional ) who carry out activities prohibited by this regime. According to COSIT, in the aforementioned situation, the contracting party shall withhold IRRF levied on the payments made to the corporate entities engaged, solely in relation to the facts occurred after verified the effects of the exclusion of the company engaged from the special taxation system. This understanding is supported by Answer to Consultation COSIT No. 149/14, which analyzed the compulsory character of withholding social security contributions by companies that could not choose to participate of the Simplified National Taxation System. Query Solution COSIT No. 146/2015 IRPJ Deductibility of Royalties On 06/16/2015, was published Query Solution No. 146, by COSIT, which provides for the deductibility ofexpenses with royalties and technical, scientific, administrative support or similar services, in the period when the contract that substantiates payments abroad is in process of registration before the INPI (Intellectual Property National Institute). The Tax Authority, in resolution to the consultation, has understood that the expenses with royalties and support (technical, scientific, administrative and others similar) in connection to the period during which the application for registration with the INPI of the respective contract are deductible. An exception, however, is that this period is only retroactive to the date of the filing of the registration, whereby prohibited the deduction of expenses when incurred in a period prior to said date. Query Solution COSIT No. 153/2015 IRRF (Withholding Tax) Overseas Remittances Under Query Solution No. 153, published on 07/01/2015, the General Coordination Office for Taxation ( COSIT ) delivered the understanding that Withholding Tax ( IRRF ) does not apply to funds remitted to France for payment of technical services and technical assistance, as provided for in the Interpretative Declaratory Act No. 5/14 ( ADI RFB 5/14 ) issued by the Brazilian Revenue Service. Per COSIT understanding, as a rule, withholding tax is levied on payments made abroad for technical services rendered with or without technology transfer. However, in the specific case of the Convention signed with France for Avoidance of Double Taxation, approved by Decree No. 70,506/72, the payment of the fees in question is not covered either by the article on Royalties or the article on Independent Occupations; therefore, the tax regime applicable to the remittance in question should be as set forth in the article on Corporate Earnings, pursuant to ADI RFB No. 5/14. As a result, upon remittance for payment of technical services or technical assistance - with or without technology transfer - provided by persons based in France, withholding tax shall not be levied on such amounts. 10

11 Query Solution COSIT No. 159/2015 IRPJ/CSLL (Corporate Income Tax/Social Contribution on Net Earnings) Net Worth Calculation On 26/06/2015, the Query Solution No. 159 was published by the General Coordination Office for Taxation ( COSIT ), which addresses the method to calculate the net worth of a corporation, for purposes of calculating the deduction limit for payment of interest related to debt with affiliated legal entities based abroad from the Corporate Income Tax ( IRPJ ) and Social Contribution on Net Earnings ( CSLL ) calculation base, provided for in Article 24 of Act No. 12,249/10. According to COSIT, until Act No. 12,973/14 comes into effect, the accounting methods and criteria applicable as of 12/31/2007 should be considered for tax calculation purposes, as set forth in the Transitional Tax System introduced by Act No. 11,941/09. Thus, only as of 01/01/2015 or 01/01/ for taxpayers who have exercised the option provided for in Article 75 of Act No. 12,973/14 - the corporate net worth should be considered (for purposes of tax regulation application purposes), the one set forth in Article 178, paragraph 2, III, of Act No. 6,404/76, as amended by Act No. 11,941/09, which includes the Valuation Adjustment Account. Interpretative Declaratory Act RFB No. 5/2015 Social Security of Individual Taxpayer On 05/26/2015, was published the Interpretative Declaratory Act of the Internal Revenue Service of Brazil - RFB No. 5/2015, for causing to be effective, before the SRFB, the decision rendered in the character of general repercussion by the Supreme Court in the records of Constitutional Appeal No /SP, which has declared the unconstitutionality of Section IV of Article 22 of Law No /91, with wording given by Law No /1999. Due to having been declared unconstitutional the collection of social security contributions on the provision of services by a cooperative, owned by contracting party, the Declaratory Act provides that the individual taxpayer who provides services under the aforementioned system shall paid a contribution of 20% on the compensation for his/her work limited to the minimum and maximum thresholds of the contribution salary. The Declaratory Act has yet determined that the Department of the Internal Revenue Service will no longer establish tax credits on the social security of the party engaging the services of cooperative members, as provided for in 1, 1, of Law No /2003, established in addition to the contribution declared unconstitutional in article 22, IV, of Law No /1991. Executive Declaratory Act COSIT No. 20/2015 On 07/13/2015, the Executive Declaratory Act No. 20 was published by the General Coordination Office for Taxation ( ADE COSIT No 20/15 ), which listed the documents issued by the Accounting Declarations Committee ( CPC ) that do not affect the determination of federal taxes. This publication stems from the provisions of Article 58 of Act No. 12,973/14, which instructed the Brazilian Federal Revenue Service to identify the administrative acts issued by accounting institutions and by the relevant bodies, which do not entail modification or adoption of accounting methods and criteria, as well as defining the procedures to cancel the effects of such actions on the determination of federal taxes. 11

12 Team responsible for preparing the Tax Bulletin: Igor Nascimento de Souza Henrique Philip Schneider Eduardo Pugliese Pincelli Cassio Sztokfisz Fernanda Donnabella Camano de Souza Diogo de Andrade Figueiredo Flavio Eduardo Carvalho Vitor Martins Flores Rafael Fukuji Watanabe Rodrigo Tosto Lascala Laura Benini Candido Marina Lee Pedro Lucas Alves Brito Viviane Faulhaber Dutra Thomas Ampessan Lemos da Silva Maria Carolina Maldonado Kraljevic Gabriela Barroso Gonzaga Ferreira Porto Ana Cristina de Paulo Assunção Vanessa Carrilo do Nascimento Sergio Grama Lima Pedro Paulo Bresciani Renata Ferraioli Pedro Guilherme Ferreira Bini Roberta Marques de Moraes Tatiana Ergang Barros Alberto Frederico Teixeira Soares Carbonar 12