Provisional Measure 1,159/2023: Exclusion of ICMS from the PIS and COFINS credit base

As announced by the Brazilian government, Provisional Measure 1,159/2023 was published on January 12, 2023.

In addition to expressly ratifying the Judiciary thesis’ that the ICMS tax should not be part of the PIS/COFINS calculation base, the Provisional Measure has prohibited the use of PIS and COFINS credits on the portion of ICMS levied on taxpayers' acquisition operations.

The Provisional Measure produces effects:

1. As of January 13, 2023, for provisions that exclude ICMS from the calculation base for PIS and COFINS debts;
2. As of May 1, 2023, with regard to prohibition of the use of PIS and COFINS credits on the ICMS portion that has been levied on taxpayers' acquisition operations.

For more information, please contact our Tax team at tributariocontencioso@btlaw.com.br).