For companies that are subject to IRPJ and CSLL calculation under the Actual Income method, PIS and COFINS are collected on a non-cumulative basis. This means that the company may take credits for certain expenses provided for by law in order to reduce the amount payable in relation to contributions to PIS and COFINS.

Thus, naturally, taxpayers are always looking for new interpretations of legislation that can safely and legally expand the range of possibilities for taking PIS/COFINS credits. The greater the possibilities of taking credit, the lower the final tax burden in relation to the aforementioned contributions.

Recently, a decision was rendered by the Federal Court of São Paulo that granted a new possibility of taking credits in the non-cumulative nature of PIS/COFINS. At the time, the São Paulo court recognized the right of a taxpayer to take PIS/COFINS credit on amounts paid as shopping center condominium expenses. Until then, by legal provision, it was only allowed to take credits on the amounts spent on rent. This new interpretation, however, expands the notion, based on the concept of inputs, also allowing the amounts spent on condominium charges of stores and developments located in shopping centers to be considered generators of PIS/COFINS credits.

The central argument is that any and all amounts spent by the taxpayer that are essential and indispensable for carrying out their productive activity should be considered as an input, and therefore subject to credit verification. In this context, taxpayers who own stores and establishments in shopping malls are required to pay condominium expenses, so that these amounts constitute absolutely essential and necessary expenses for carrying out the core activity of that enterprise.

If your company is in a similar situation, we recommend that you evaluate the filing of a judicial measure in order to seek judicial recognition of the right to take PIS and COFINS credits on condominium values in shopping centers, as well as to see recognized the right to make the calculation of such credits retroactively, in the last five years.

Source: Wagner Arnold Fensterseifer, attorney at Cesar Peres Dulac Müller, is a specialist in Tax Law and a Master in Philosophy of Law.