• Service: Tax, Global Indirect Tax, International Tax
  • Type: Regulatory update
  • Date: 10/24/2013

Brazil - Social contributions (PIS/COFINS) on imports of goods 

October 24:  A new federal law in Brazil reflects the holding of a March 2013 decision of Brazil’s Supreme Court concerning what is the tax base for purposes of determining the social contributions on imports of goods.


Brazil’s Supreme Court in March 2013 issued a decision concluding that for purposes of determining the amount of social contributions (PIS and COFINS) on imports of goods, the tax base does not include the amount of value added tax (ICMS) or the amounts of the PIS and COFINS themselves.

This conclusion was in stark contrast to the legislative language of Law 10,865/2004.

New law

Law 12,865/2013, published in Brazil’s official bulletin on 10 October 2013, revised Law 10,865/2004 and reflects the decision of the Supreme Court with respect to the determination of the PIS and COFINS tax base for imports of goods.

Under the new law, for purposes of determining the tax base for PIS and COFINS on imports, the customs valuation of the imported goods is to be used.

Thus, the new law clarifies that the tax base for PIS and COFINS purposes does not include VAT (ICMS) or the PIS and COFINS themselves.

Also, given that customs duties and excise taxes both are included in the tax base for VAT (ICMS) purposes, the new law effectively removes these levies from the tax base used to determine PIS and COFINS on imports of goods.

Tax authority guidance

Following enactment of the new law, the Brazilian federal tax agency also in October 2013 issued Normative Instruction 1,401/2013 as guidance for calculating the PIS and COFINS on imports of goods.

The new method for determining the tax base for PIS and COFINS on imports is effective 10 October 2013.

KPMG observation

Tax professionals in Brazil have observed that no changes have been made with respect to determining the tax base for PIS and COFINS on the imports of services.

Read an October 2013 report (English) (or Portuguese) prepared by the KPMG member firm in Brazil: Tax News: Tax Basis Reduction on Import Transactions

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