On October 15, 2019, Brazilian IRS Normative Ruling No. 1,911/2019 ("NR No. 1.911/2019") was published in the Official Gazette, compiling the federal tax legislation related to the Social Integration Program ("PIS"), the Public Servant Heritage Formation Program ("PASEP"), the Contribution to Social Security Financing ("COFINS"), as well as to PIS-Import and COFINS-Import. 

NR No. 1.911/2019 revoked more than 50 normative rulings in force up to now, compiling in one single regulation the rules applicable to the aforementioned contributions, including the potential differentiated tax treatments, such as sales in the Manaus Free Trade Zone, REIDI, REINTEGRA, RECAP, Export Processing Zones, as well as the trading of alcohol, paper, biodiesel and cigarettes, among others.

The normative rulings that have been revoked include Normative Rulings No. 404/04 and No. 247/02, being defined in article 176 of NR No. 1,911/2019, the concept of inputs for the purpose of calculating PIS and COFINS non-cumulative credits. This definition took into consideration the criteria of essentiality and relevance adopted by the Superior Court of Judgment ("STJ") in the judgment of Special Appeal No. 1,221,170, although under the perspective of the Brazilian IRS pursuant to Normative Opinion COSIT No. 05/2018.

Additionally, in regards to the exclusion of the ICMS from PIS and COFINS calculation basis, resulting from the decision issued in Extraordinary Appeal No. 574.706, the sole paragraph of article 27 provided that the exclusion can only be carried out by taxpayers that have final judicial decision. In the same sense, the amount to be deducted from these contributions is the ICMS effectively collected and not the one informed in the fiscal invoice, which is in line with the position adopted by the IRS in the Answer to Advance Tax Ruling Request No. 13/2018.

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