COSIT Consultation Solution No. 21/2026 and Tax Planning

COSIT Answer to Advance Tax Ruling Request No. 21/2026 represents the most comprehensive position ever issued by the Federal Revenue Office regarding the methodology for calculating PIS and Cofins credits resulting from the exclusion of ICMS – especially in light of the wording introduced by Law No. 14,592/2023, which now expressly deals with “ICMS levied on the transaction”.

Although the tax administration’s understanding is explicit in reaffirming the use of ICMS highlighted, recent market movement and legislative dynamics suggest that the debate is not technically over. This is because the isolated exclusion of the highlighted value may not fully capture all the effects of “inside” taxation on price formation – especially in an environment where ICMS, PIS and Cofins are accumulated in the value of the operation itself.

From an economic point of view, this difference reflects a legitimate discussion about the effective tax base, and not merely a nominal one, especially for sectors with narrow margins or long production chains. It is precisely this tension between legislative technique and tax mathematics that rekindles the possibility that there is a residual ICMS embedded in the base of contributions – potentially recoverable, provided it is well-founded.

At the same time, companies that have already adopted the gross-up methodology or are considering taking advantage of the benefit should assess the impacts of the recent Cosit ruling. SC 21/2026 tends to result in compensation disallowances or administrative non-approvals, requiring documentary preparation and an appropriate litigation strategy.

Thus, the discussion on the “ICMS incident” transcends the analysis of strict conformity and opens up space for broader reflections on material non-cumulativeness, symmetry in the chain and the constitutional design of indirect taxes.

Why does the theme matter to your company?

• Possibility of significant credit recovery, especially for companies with large sales volumes.
• Need for strategic review of compensations already presented.
• Potential for litigation with a significant impact on cash flow.
• Direct impact on price, margin and tax compliance policies.

How can Araújo e Policastro Advogados support you?

Our firm offers a technical assessment of the company’s scenario, risk analysis, preparation of strategic opinions, economic modeling and the handling of all administrative and judicial litigation.